Ponta Bicuda

This topic contains 170 replies, has 31 voices, and was last updated by  hammersteve 13 years, 3 months ago.

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    optiontrader
    Member

    hammersteve:- I have bought on Ponta Bicuda. The deposit is only 40% before completion, which is a lot less than most developments, although this may change(So get in now) it happened at Ponta Preta in Sal. The rental guarantee is handy if you do not want the hassle of being a landlord. Its not due to be completed until late 2009/early 2010 so by that time its pretty certain direct flights will be in place.

Viewing 15 replies - 31 through 45 (of 170 total)
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    cyclefrance
    Member

    Hi OT – ref yrs on rental – that’s intersting and different from the info I recd over the phone from one of the Sambala sales people. I plan to go to the Oxford office next week so will be able get the full details then.

    What you are saying makes sense, but maybe there’s a take it or leave it option which at least means that if you are wanting to sell your property you don’t have to be tied into a rental deal. I haven’t all the details yet and maybe the line I was given was incomplete sales patter. Thanks for the info/warning.

    Where you’re pedalling beats pedalling your wares

    cyclefrance
    Member

    Hi Sal.Oracle – ref flights – the answer is capacity and competition.

    As demand grows for both Sal and Praia detsinations then Sal plus a hop is not necessarily the best solution as passenger capacity will be limited to what the inward flight to Sal can take. There will be a time when this will not be enough to satisfy both destinations.

    On top of that as holiday companies want an efficient means to fly customers into Praia, the carriers will be pressed not to offer Praia direct both on a time and a cost basis. I would think it’s a safe bet that a company such as Fly Astraeus that has acquired a lead with its UK-Sal offering won’t want to see that eroded by ignoring customer demand for quick and cost effective travel to Praia.

    BTW I read today in the Sunday Times that Thomsonfly are already offering flights to Sal on Mondays – I looked up a flight on their website – out June 4 and back June 11 at total cost of £453.98 on TOM4425 out and TOM4426 back including taxes but excluding meals – if they are doing that so soon then as soon as demand hits from Santiago then they will want/run direct flights into Praia

    Where you’re pedalling beats pedalling your wares

    optiontrader
    Member

    cyclefrance:- I am referring yo Ponta Bicuda not Sambala, re:- after 5 years.

    cyclefrance
    Member

    Thanks for clarifying OT – the follow-on period after the 5-year guarantee at Bicuda is quite a big negative for me from a risk vs finance point of view. Irrespective of the capital growth that may or may not be attained, that second period looks like it could easily cause a selling blight, and if the rental rates go the wrong way, my finance package will look more than a little sick.

    I know it’s not the same case for everyone as different investors are going to have different criteria, but just wanted to be clear what things tip the balance in my case. I do like the design of Bicuda, especially the smaller villas, and bar that rental issue it would be a hard choice for me, but it’s the old bird-in-the-hand that attracts me more towards Sambala at the moment. Who knows though, by Thursday next week that could all change….

    Whatever happens, and my final choice, it looks as though I may have to brush up on my cricket – if you and Graham extend the invitation that is… (let alone my golf – although I understand that we have until at least 2009 to have to worry about that, so no chance to sneak in a game during the Bicuda build programme, I’m afraid).

    Where you’re pedalling beats pedalling your wares

    cyclefrance
    Member

    Just recd the following from Savills today re Ponta Bicuda rental-income scheme – for info:

    qte
    The operation of the property is actually on a 10 year contract for those properties purchased in the hotelier club, the first five of those years the property has a 5% rental guarantee (you will also get the excess if the income exceeds 5%), this contract lasts for 10 years. You would be obliged to renew this contract for another 10 years, if, from years 6 – 10 the income generated is 5% or over. Therefore it could be taken that buying a property in the hotelier club would be buying a permanent lifetime investment property.

    There is to be a 5% price increase at some point in January, but I will let you know when this is.
    unqte

    This may suit others but for me it’s a bit too open-ended income wise, and the 10 maybe it’ll be 20 year structure could adversely affect resale opportunities – I’m not sure when exactly you get to regain control of you property, and then there’s the question of the cost of refurbishment that will arise after increased wear and tear from renting. It looks a much better deal on the hotelier’s side than it does on the ‘owner’s’ side.

    Where you’re pedalling beats pedalling your wares

    pinto
    Member

    quote:


    Just recd the following from Savills today re Ponta Bicuda rental-income scheme – for info:

    qte
    The operation of the property is actually on a 10 year contract for those properties purchased in the hotelier club, the first five of those years the property has a 5% rental guarantee (you will also get the excess if the income exceeds 5%), this contract lasts for 10 years. You would be obliged to renew this contract for another 10 years, if, from years 6 – 10 the income generated is 5% or over. Therefore it could be taken that buying a property in the hotelier club would be buying a permanent lifetime investment property.

    There is to be a 5% price increase at some point in January, but I will let you know when this is.
    unqte

    This may suit others but for me it’s a bit too open-ended income wise, and the 10 maybe it’ll be 20 year structure could adversely affect resale opportunities – I’m not sure when exactly you get to regain control of you property, and then there’s the question of the cost of refurbishment that will arise after increased wear and tear from renting. It looks a much better deal on the hotelier’s side than it does on the ‘owner’s’ side.

    Where you’re pedalling beats pedalling your wares


    This is just a very expensive timeshare. You can get timeshares for £500 in excellent places nowadays.

    optiontrader
    Member

    cyclefrance;- As you know you have a choice if you want to opt-in to the Hotelier or not. If you do not opt into the Hotelier, then you have to sort out your own rentals, maybe through a management company.
    I am under the impression that you do not want to sort out your own rentals, and the associated problems.

    The first 5 year of the Hotelier you are guaranteed a minimum of 5%, I think we will get a lot more. You also give the impression that you are going to have problems re-selling. Believe me we will have no problem re-selling if we get one of the big hotel franchises to manage it.

    cyclefrance:- looking at your previous posts I think you want your cake and eat it.

    cyclefrance
    Member

    Just looking for the best overall deal without my rose-tinted glasses on…

    Upside calculations always look good – but you need to consider the downside as well. The property market is bubbling at the moment – there are a plenty of other locations where there are building programmes and off-plan deals. Saturation may not be immediately around the corner but all the talk of new location prices being 25% of this or that established location is great, unless and until the market drops. Then all markets drop and it’s usually the established ones that fare better.

    I’d rather be in a situation where I at least have the option to get out when I want, than endure a downturn while being handcuffed and unable therefore to get a decent return on my property.

    I’ve owned and rented independently before in an established resort, and using independent management companies with no buy-in to the property in any way is no easy relationship when you are thousands of miles away – it took me 3 years to find a half-decent management outfit then and even that one didn’t perform that amazingly. A deal that involves a partner who has a vested interest in seeing things work is good, but they are not going to be able to over-rule the economics of the market-place – so if there is a downturn then it’s better to have a partner that is giving you some flexibility. Sorry, but Ponta Bicuda doesn’t do that. Sambala does, and I am leaning more in that direction at the moment as a result.

    Where you’re pedalling beats pedalling your wares

    pinto
    Member

    quote:


    around the corner but all the talk of new location prices being 25% of this or that established location is great, unless and until the market drops. Then all markets drop and it’s usually the established ones that fare better.
    I’d rather be in a situation where I at least have the option to get out when I want, than endure a downturn while being handcuffed and unable therefore to get a decent return on my property.


    You say extremely realistic things.

    But you forget one thing: Spain and France are established market whereas CV is a completely unestablished one. In the coming real estate recession, which market do you thing is going to survive?

    cyclefrance
    Member

    I think they will all survive – in varying degrees. Places as establshed as France and Spain have seen it all before. They have seen excellent growth and while it would be difficult to predict the degree of impact they will fair better than somewhere as young as the Azores.

    When Spain started its building boom many years back there were the horror stories of over-commited developers, crooked ones who used owners title deeds to finance new projects and a whole raft of dubious schemes. The location where I bought in the early 80’s and owned through to the mid 90’s, Ampuriabrava on the northern Costa Brava near Rosas, had its share even then – a couple of grand schemes were half or even only a third completed – they should have been completed by now I suspect although I haven’t been back there since 2000.

    From a buyer angle, IMO, you’ve either got to be in it for the long-term because you genuinely like the place or else be someone as an investor who knows when to and can jump when it’s right to jump,and you need the right deal to be comfortable in either situation.

    There’s some good solid outside financial assistance (China and Netherlands being to sources if I remember correctly) that will help the Azores – plus the longterm prospect of going EU, but I have no misconceptions about the likelihood of some schemes failing to complete (or be properly maintained) as and when a market goes into recession.

    As an early entrant you should fare reasonably well if you have the means to minimise any negative impact – that means having the flexibility in a number of areas to weather the storm or are not reliant on rental income (i.e. you bought with spare cash and not with finance), or you just want to be in and out in a couple of years or so.

    We are looking for a longterm purchase, and the island of Santiago appeals for a number of reasons. We will take a modest gamble, so some financing which I expect to cancel out if things go well for the next 3 years. If they don’t I reckon I have enough experience of independent renting to supplement any shortfall should the need arise and the necessary cushion to take a downturn running into a number of years if needs be. I hope it doesn’t come to that, but I wouldn’t be happy to go ahead unless prepared in case it does.

    I wouldn’t advise anyone to finance themselves up to the hilt on the prospect of booming market capable of 20%-30% ongoing growth p.a. Work on average 10% p.a. over 5 years and I reckon your probably safe – that might just hold out at 15% if there are no major eruptions in the market-place. That’s only my view – others will undoubtedly think and give reasons why it should be different/better. I suppose the common-sense advice is don’t buy for the wrong reasons – the old addage – ‘if it looks too good it probably is’ – tends to hold true.

    Where you’re pedalling beats pedalling your wares

    pinto
    Member

    quote:


    When Spain started its building boom many years back there were the horror stories of over-commited developers, crooked ones who used owners title deeds to finance new projects and a whole raft of dubious schemes.
    From a buyer angle, IMO, you’ve either got to be in it for the long-term because you genuinely like the place or else be someone as an investor who knows when to and can jump when it’s right to jump,and you need the right deal to be comfortable in either situation.

    As an early entrant you should fare reasonably well if you have the means to minimise any negative impact – that means having the flexibility in a number of areas to weather the storm or are not reliant on rental income (i.e. you bought with spare cash and not with finance), or you just want to be in and out in a couple of years or so.We are looking for a longterm purchase, and the island of Santiago appeals for a number of reasons. We will take a modest gamble, so some financing which I expect to cancel out if things go well for the next 3 years. If they don’t I reckon I have enough experience of independent renting to supplement any shortfall should the need arise
    I wouldn’t advise anyone to finance themselves up to the hilt on the prospect of booming market capable of 20%-30% ongoing growth p.a.


    You are again perfectly right.

    In normal conditions, CV would do well and maybe it will.

    My main concerns relate to the upcoming economic crashes in UK, Europe and USA. People might be completely out of finance in a couple of years and banks will almost completeley close the money source.
    As £350 for a flight to CV is about 5 times the cost of a flight to Spain, people will be forced to prefer Spain, Portugal and France because their holiday budget will become very tight.

    Anyway, good luck with your investment.

    cyclefrance
    Member

    Hi Pinto – I think you have to factor in quality – those who can afford the higher value holiday usually weather recessions better – they have the resources. So maybe at the middle-lower end of the market yr flight cost will have an impact, but at the higher quality end the impact would be less I think.

    I would therefore expect the cheaper developments to be found more predominantly on Sal to be heavier victims to the flight-effect than 5-star ones which seem to be the basis of the two Santiago offerings under discussion at the moment. Hope I’m not wrong there! and still like to have an escape route all the same…

    Where you’re pedalling beats pedalling your wares

    cyclefrance
    Member

    Additional info on Ponta Bicuda from their head of sales, Virgilio Costa:


    1) We only guarantee the income for the first five years;
    2) The initial contract is for a ten year period. If the hotel fails to consistently deliver the 5% promised for the first five years you may get out of the contract (the other way around we’ll all be smiling);
    3) You may go out and join the easy living product at the end of the contract.
    4) This is a proper hotel, we’re not offering a villa without infrastructures and facilities (we’re really investing in the hotel, with the back of the house facilities, restaurants, receptions, swimming pools, etc accounting for thousands of built unsoldable square meters). I strongly advice you to always check for the real economic possibility for the buy to let products to generate the offered revenues (a house to rent without hotel facilities always drives to a smaller return than the same house with a professional hotel exploration).
    5) You may find many different products in the market, but I’m sure that you won’t find any other that will pay you the guaranteed income upfront leveraging automatically your investment.

    Just one final remark: Although we have conducted extensive market researches, we’re constantly trying to improve our products, We know that we’re not perfect and we’re not trying to reach all the investors in the world, but we clearly aim to the private investor, not to the tour operator.

    and from a separate email (so there may be some duplication:


    We strongly believe in the hotel exploration of Ponta Bicuda and we’re guaranteeing the first years because those are the most difficult ones. The first term of the contract is ten years and you can always “go out” of the hotel exploration by entering the easy living. We’re building the hotel with the properties that the customers are buying… most products in the market have a separate hotel and properties to rent on the top of that (in those cases you know which properties they’ll sell first…). By all means, we’re not selling time share. The property is fully owned by one only buyer who either enrolls a hotel management contract (hotelier club) or uses the property on his own for all the time (easy living), with the right to use all the hotel services.
    Regarding your concern with the replacement of certain elements, in the hotel exploration, there will be a fund to manage the decoration life cycle and the maintenance of the items like furniture, to avoid the mentioned agency problem. There’s a reserve to be used when necessary to always keep things up to the high standard we’re offering now. Just one more thing, we plan to manage the resort for years to come, we’re not trying to sell the properties and move away to the next business.

    Hope above helps those who want more info – it certainly helps me to understand the Ponta Bicuda offer a lot better

    Where you’re pedalling beats pedalling your wares

    david morris
    Member

    hey cycling france or outer mongolia or whatever is your name ….whoose wares are you pedalling …for sure its not your bicycle….

    optiontrader
    Member

    cyclefrance:- take no notice of david morris, he is like that with everybody.

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