Frequently Asked Questions

The Portuguese company was formed in July 2019, funded by the co-founders. The Company has four private shareholders. The market uncertainties through the Covid-19 pandemic put activities on pause and a series of pilot properties were purchased in early 2022. Operationally, the management used the 2021/22 pandemic periods to increase its business network, further research the market and establish the company’s profile and presence. From the start of 2022, the Company has been securing significant project funds on a profit share basis. Investments have ranged between €40.000 and €150.000 with the company now moving towards higher sales values.

Rural Properties is the trading name of the Portuguese-registered company, RPF Portugal Lda. This Lda is owned by three private investors and a UK based investment fund with existing stakes in Portuguese media and property businesses.

The Company buys old, unoccupied properties in attractive rural locations in Central Portugal, renovates them to current, energy-efficient standards and sells them on the open market. We select properties that will not require planning permission prior to upgrade. This saves time delays and allows renovation work to start shortly after a property is purchased. Using our inspirational design agency to ensure the best use of space and an energy-efficient finish, the properties are renovated by Rural Properties specialist teams. Properties are offered for sale on the open market during the renovation process. Early buyers have the option of paying a deposit and working with our design agency, Concepto Studio, to create the interior finish, fixtures and fittings that they desire.

In charge of the operational team is Paul Rees, who has completed many successful property projects, including refurbishments and new builds. Cost-effective solutions and budgetary control are second nature. Working in the rural property market, Paul’s contacts and suppliers include sector-specific experts in energy efficiency, traditional materials and construction. Director, Kate MacGowan is an internationally experienced business developer with over 20-years’ experience, providing commercial consultancy and strategic guidance to individuals and organisations. Her detailed oversight ensures that the Company is registered and run correctly under Portuguese company law. Kate’s exhaustive selection of professional advisors and service providers ensures the business is professional and efficient. Gelu Timis is a construction and renovation specialist with decades of experience in multiple projects in the UK and, latterly, across Portugal’s central region. Gelu’s insight into local construction regulation, eco-efficient systems, materials selection and property presentation is invaluable for accurate budgeting, cost control and inspired property redesign and renovation. Gelu manages the construction teams and selects specialist sub-contractors.

The registered office is in Coimbra, in the rural centre of the country between Lisbon and Porto. The company’s remit covers ‘rural Portugal’, defined as the country’s inland areas from north to south. Initial investments have been in the Central Region council areas of Sertã, Castanheira de Pera, Figueiró dos Vinhos and Pedrógão Grande. Organic expansion remains within this zone.

Prior to the payment of profit share returns, a 28% withholding tax is deducted and paid by the company on behalf of the investor to the Portuguese Tax Authority.

Investors advance funds to RPF Portugal Lda under a simple loan agreement (Associação de Participação) in which any specifically negotiated terms and conditions are included. The loan agreement is signed by both parties and copies held by the Company’s registered accountants (Taxlibris Contabilidade e Consultoria, Lda) and lawyers (Prelhaz Advogados). It is not necessary for the lender to be in Portugal to sign the agreement. After funds are transferred, the lender receives progress reports and a final account when the property is sold. This account includes a statement showing the initial capital repaid, the withholding tax paid and the net profit share remitted.

The Company operates in a high-margin sector where there is an oversupply of properties to be developed and a shortage of completed projects. The property selection rule is that the market value of a complete property project needs to be double the purchase and renovation costs. Margins are achieved by buying low, by tightly controlling renovation budgets and by selling professionally in a growth market. The Company has the skills and knowledge to achieve this. Due to a growing reputation for speedy purchase completion, we are well-positioned to access unadvertised properties at highly competitive prices, both from individual sellers and from many estate agents who are keen for a quick sale before advertising a property. There are no guarantees of margin but with a 50:50 profit share, it is in the interests of all involved that the projects are as profitable as feasible but not at the expense of quality.

Early projects involved purchasing village properties for under €40.000 and selling them at below €100.000. While the margins on these sales were high, the amount of euros in profit was insufficient to justify the effort. A pilot period management review indicated that the optimal price range for sales is between €200.000 and €400.000, purchasing properties for between €30.000 and €120.000. Current projects have resale values of between €175.000 and €450.000.

With rising property purchase prices and increasing renovation costs, the minimum investment for a profit share agreement in an individual project is unlikely to be less than €150.000. As this puts a one-off investment outside the comfort zone of some investors, there is a way that small groups of investors jointly can fund individual projects. By joining the Investors’ List, larger projects will be offered on a one-by-one basis.

The company operates in a market sector where there are ample project margins to remain in profit. The rural property market has been less affected by economic downturns than the middle and upper levels. Sales activity may slow down but prices remain steady. There is the option of renting out a property, releasing it for sale after a recession.

Our pre-purchase screening process highlights any legal or zoning complications. We reject some properties before wasting time in resolving long-running issues. For any less embedded issues, our legal team ensures any out-of-date documentation is updated to ensure a fully compliant purchase can take place. Bureaucracy can be simpler and swifter in inland areas. A willingness to get things done permeates rural bureaucratic systems including notaries, local tax offices and local Councils which are happy to define and explain any local property development regulations.

The best-case scenario is that the company buys multiple properties while prices are low, and that the market prices rise at a quicker than expected rate. The worst-case scenario is a sharp drop in both demand and price with the Company sitting on a non-performing property portfolio. In this scenario, effort would be devoted to promotional activity to sell existing stock, price cutting as necessary but not into a negative return. Completed properties also may be rented out until market conditions improve.

Both by using estate agents and privately through social media and the www.rural-properties website.

The positive social impact of this business is a natural result of its operations. By renovating empty rural homes in Portugal’s interior regions and selling them to incoming singles, couples and families as first, second or rental properties, inevitably there is an impact on local economies. Inland municipalities benefit from an increased property tax income and local businesses benefit from more trade. This business fits well with the European Union and successive Governments’ longer-term aim of regenerating interior regions and, by providing renovated, energy-efficient homes, the Company provides some of the housing needed to fulfil those objectives. Locals like what we are doing. Many houses have stood empty for decades and there is a deep appreciation that ‘someone is taking the trouble’ to buy and renovate.

We do; each project and each project team is controlled by the construction specialist/team manager, to ensure quality, cost-control and margin.

The current increase in demand for rural properties is boosting resale prices. Each renovation is different, but we advise investors of a six-month renovation period and a six-month sales period.

Rural Properties works alongside Concepto Studio, based in the Algarve and run by property veterans, architect Arnold Aarssen and designer, Eric de Bruijn. Concepto Studio is instrumental in the inspired reconfiguration, interior design and energy-efficiency inherent in Rural Properties’ developments. In addition to creating bio-climatic properties with beautiful interiors, the team also works alongside buyers of our pre-finished properties to ensure their homes perfectly satisfy individual lifestyle needs.

We have access to pre-market and unadvertised opportunities. The company can react quickly to opportunities. This is widely known by the local property community. There is over supply of rural properties and an undersupply of ready-to-enjoy countryside homes. Historically, people have moved from the countryside to the cities or abroad, leaving behind multiple development opportunities. Local estate agencies can be used productively as many offer properties to the Company before these are listed. Additionally, many properties are sold by individuals who are unwilling to use estate agents due to high minimum commission rates.

The Central Region contains a diversity of markets, defined by location, socio-economic mix, employment rates and access to infrastructure. The Company’s 2022 pilot year renovations were carried out in the west of this region, close to the Lisbon - Porto motorway, in well populated, buoyant, areas. Adding second-home buyers from Lisbon and Porto to the increasing number of buyers from outside Portugal, has created solid and profitable market conditions.

No other company in Portugal is buying and refurbishing multiple rural properties using investment funds secured in this way. Some individuals buy, renovating and sell private homes and projects but in no significant overall volume. The detailed knowledge of bureaucracy needed to source, purchase, renovate and sell inland properties serves to deter larger property companies from getting involved in this market sector.