Wednesday 12 March 2008

Is Brazil Destined for Greatness?

Brazil is being highly spoken of as one of those legendary 'property hotspots', perhaps more so than any other country in the world at the moment. Is the information we are getting just 'spin' from agents and developers to get us interested in the next place they will make a large amount of money or is there some substance to what is going on there?

We decided we should send one of our intrepid reporters over there to see what all the fuss is about, you'll find the resultant article is extremely informational. Times overseas property writer, Gordon Miller, is the reporter who got the enviable job of travelling around this huge country and he was impressed where he didn't expect to be and unimpressed where he felt he would be. To read the article click here.

If you want to get your hands on a listing of Brazilian property you'll find it here.

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For a full listing of agents selling property in Brazil click here.

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1 comment:

Brazil Investment Guide said...

A property hotspot yes - but also a region with several potential pitfalls, particularly for foreign investors 'gringos'. Although the Brazilian economy has made incredible strides over the past few years, the legal and land registration systems have lagged behind and continue to create uncertainty for investors. This is particularly true in less developed regions of the country, such as the Amazon and the Northeast, where many foreign investors are now focused. For example, over 500 European investors lost their shirts investing in a luxury resort near Natal. The developers had plans for 30,000 homes, a marina, golf course, sports centre, spa, heliport, shopping centre and a plastic surgery clinic, all on an idyllic beach and around a lagoon. The problem was that nothing was ever built, none of the investors’ funds every reached the project, and the developer is now sitting in a Spanish prison (see this article). In rural areas, land grabbers have an “investment” strategy called grilagem, from the Portuguese word for ‘cricket’. People have been known to falsify a deed and then store it in a box full of crickets to make the paper seem older (and thus more authentic). In addition to fraud, title issues can arise when mistakes are made in transferring property. For example, if a spouse or child is left out of a deed, the person not included could show up later on and challenge the rights of the property’s current occupant. In less developed regions, the boundaries between properties can be based on physical objects that can move or disappear (i.e.: “Start at the old tree, then take 50 steps to the stream…”). Squatters such as the Landless Peasant Movement could obtain possessory rights over land even if they do not appear in any registry. Although your attorney or the cartorio could theoretically be liable for mistakes, an investor would need to prove negligence in order to win a lawsuit, which is no easy matter for a foreigner up against well-connected local attorneys. Even if the investor wins the lawsuit, the Brazilian courts can easily delay the date of judgment for decades. These are just some examples of risks faced by real estate investors.

Not to be overly negative, it is becoming clear that Brazil has much potential - there is just a need to be extra vigilent when approaching any kind of investment in the country.