Cape Verde

Discussion in 'Overseas property investment' started by Jeremiah, Nov 22, 2005.

  1. Jeremiah

    Jeremiah Frequent Poster

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    Investment in Cape Verde Islands

    Dear All
    I am thinking about investing in a property off plan in the Cape Verde Islands. It appears that development is at an early stage on the islands and I was wondering if anyone has an opinion on this area. The property is a 2 bed beachfront apt for €100k.

    Any advice or feedback appreciated
     
  2. extopia

    extopia Frequent Poster

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    Re: Investment in Cape Verde Islands

    Have you ever been there? What do you know about the market there? Tip: if you know nothing about it, probably better to not do it.
     
  3. Jeremiah

    Jeremiah Frequent Poster

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    Re: Investment in Cape Verde Islands

    Have not been there but am planning to go to see the lie of the land etc. From research I have done and what I have read, it appears to have some similarities to the Canary Islands of the 1970's, pre boom time. The developer of these apts is Irish. It is a developing tourist resort, early days yet. I am in two minds on it
     
  4. DrMoriarty

    DrMoriarty Moderator

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    Re: Investment in Cape Verde Islands

    There's a recent BBC 'factfile' on the place here, and you can read the local paper here.
     
  5. extopia

    extopia Frequent Poster

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    Re: Investment in Cape Verde Islands

    Remember this Irish developer will probably be factoring in the hunger for investment property in Ireland, 100k seems cheap etc etc. Do some research and find out the average value of similar properties in the area, at the very least.

    Again, I would NEVER invest in a market I do not know.
     
  6. Jeremiah

    Jeremiah Frequent Poster

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    Re: Investment in Cape Verde Islands

    Thanks guys - I know where you're coming from on doing a due diligence on it. Because of the (I understand) low levels of development there, it is quite tricky to compare like for like on value. Do you know of another way to get this info without visiting immediately? Have you ever heard of this destination before?
     
  7. RainyDay

    RainyDay Frequent Poster

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    Re: Investment in Cape Verde Islands

    Have you considered the tax impacts? The legal risk? How you're going to manage the property? How you are going to maintain it?
     
  8. extopia

    extopia Frequent Poster

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    Re: Investment in Cape Verde Islands

    Personally, yes, I've heard of the place. It's apparently "hot" with one or two Irish "developers" who no doubt are anxious to rake in some of the cash available in Ireland for this kind of thing. Do I know a tot about the place? No. Take everything the developer tells you about it with a large grain of salt.
     
  9. Jeremiah

    Jeremiah Frequent Poster

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    Re: Investment in Cape Verde Islands

    At present there is not a double taxation agreement in place between Ireland and Cape Verde. The developer is proposing a management company, organised by themselves, to maintain the property. The completion date is 2008. I would hope to rent out the property once completed - rental market yet to be identified or to sell once completed in 2008. As the market is not tried and tested, there is a high element of risk involved, in terms of market knowledge. Is this far too speculative and risky?
     
  10. Jeremiah

    Jeremiah Frequent Poster

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    Re: Investment in Cape Verde Islands

    Extopia, do you have an overseas investment property? Do you think that these types of investments are too risky overall, except in a well known, well defined market? I'm planning to meet with the development company before Christmas on a presentation they are giving. Given their agenda in presenting the rosy picture at all times, are there any probing q's I could ask them to get a more objective picture? Thanks
     
  11. extopia

    extopia Frequent Poster

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    Re: Investment in Cape Verde Islands

    If you're asking me, yes it is.
     
  12. Jeremiah

    Jeremiah Frequent Poster

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    Re: Investment in Cape Verde Islands

    Thanks for the feedback. I'll go along to the presentation before making any decision on it. Seems to me like it's going to be a difficult one to get more info on, I guess the niggling question at the back of my mind is whether this is an opportunity to buy in early into what will develop into a successful sun destination or just another "get rich quick" scheme by developers who are using "sunny side up" marketing!
     
  13. extopia

    extopia Frequent Poster

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    Re: Investment in Cape Verde Islands

    I do not have an overseas investment property, no. I do have several properties, but none of them are investment properties, and they are all in Ireland, where I can use them, and keep an eye on them!
     
  14. Jeremiah

    Jeremiah Frequent Poster

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    Re: Investment in Cape Verde Islands

    That sounds like an interesting portfolio - although I don't quite understand when you mention several properties yet none you would class as investment. I do take your point on being able to keep an eye on things, however - I have some properties also in Ireland however I am looking overseas primarily because of the difficulty in finding any value in Ireland these days.
     
  15. RainyDay

    RainyDay Frequent Poster

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    Re: Investment in Cape Verde Islands

    What does this mean for you in terms of the income tax you would pay on rent and the CGT tax you would pay on selling, both over there & over here?
    Can you write off mortgage interest as an expense over there?

    Sounds like a bit of a dangerous conflict of interest to me. Do you think this management company staffed by the developer's flunkies is going to give the developer a hard time on maintainance issues? Will you have alternative competing management companies you can use if you don't like the price/service provided by this company?

    Oh & what about currency risk? Will you be borrowing over there or over here? What happens if their currency drops substantially?

    No disrespect, but it sounds like you are avoiding properties which you know are poor value (here) and going for properties where you have no idea whether they are good or bad value (over there). Doesn't sound like a smart move to me.
     
  16. stuart

    stuart Frequent Poster

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  17. Jeremiah

    Jeremiah Frequent Poster

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    Re: Investment in Cape Verde Islands

    I take your point about the link between management company and developer. While all the discussion around the mechanics of the investment, such as Income Tax, CGT, ability to resell, is very important, I am trying to get a feel for the bigger picture of the islands as an investment location and if anyone has invested there / is considering investing.
    I hope to be able to come back with more info on this subject to people once I've attended this presentation. Anyone else with any opinions / experience of Cape Verde.
     
  18. extopia

    extopia Frequent Poster

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    Re: Investment in Cape Verde Islands

    Ask the developer to give you a list of people who have bought previously, assuming he has built other units there in the past. Call up a few of them and ask them about their experience with the developer and whether they now think the property was a good investment.
     
  19. angie

    angie Frequent Poster

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    Re: Investment in Cape Verde Islands

    Just for tuppence worth am just back from Tenerife and was reading the property mags and the estate agents brochures there and all of them are starting to mention cape Verde. As you say seems to be the up and coming place but who can predict the future. What I would look at is how easy is it to get to the place and try to look at travel websites to see if anyone is doing package holidays there German tour operators usually seem to be first on the ball with a lot of these places
     
  20. ClubMan

    ClubMan Frequent Poster

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    Re: Investment in Cape Verde Islands

    Just because somebody is doing a hard sell on something doesn't necessarily mean that it's a good buy.