Rural Property Market: Portugals' Central region
Paul Rees of Rural Properties, the property investment service based in Portugal’s beautiful central region, loves to receive questions – the more bizarre the better. The company buys and renovates a wide range of properties, working with investors and sharing profits.
Q. How do you avoid the delays from the local council when you apply for planning permission?
A. We do not buy any property that would require planning permission to renovate. Life is too short and time eats money.
We buy properties that require no exterior alteration and formally notify the local Council when work is taking place; such as this new roof (right) at Casa Adelina in Pedrógão Pequeno, Sertã.
In return for a small fee, I receive a duly stamped piece of paper noting what will be done to the property in question. As long as we are not making changes to the property’s façade, such as installing a window where there wasn’t one, the teams may press on with internal renovations without fear of censure and fine.
Q. Do you pre-sell properties that are being worked on?
A. Yes, we try to as this is good for cash-flow. An example is River Beach Cottage in Horta Cimeira, Pedrógão Grande (left):
When work started on this abandoned building, any early buyer could have secured it for €62,950 fully finished. We had the cottage revalued recently and the current price has risen to €75.000, so that’s the new buying price.
A 25% deposit secures and having republicised the offer, there has been a sharp increase in enquiries. I think we will have a valuation of over €80.000 when it is completed.
Also under the ‘pre-selling’ question; after an unavoidable but manageable delay, we can now complete the purchase of our C15th house in Pedrógão Grande, the rather grandly named ‘Casa da Albergaria de São Pedro’.
Having has access to the property for the past few weeks, the works plan is oganised, as much as it can be without some invasive inspection, and the garden has been redesigned.
This property, 195m2 over two levels plus 600m2 garden, has almost much flexibility and pre-selling is a great way of making sure the house fits the next owner’s needs.
For example; should the old bar area (pictured above) become a large dining room or a separate apartment for rental/family use? Should there be a third en-suite bedroom or use that space as an office area? The developer’s dilemma… but a high-quality problem.
The resale price for this historic building will be around €360.000.
Q. Do you have any properties for which I can design the inside?
A. a) Within limits. The village centre property below has no garden so it is feasible to open up one end as an outside sitting area behind the front wall, or build a terrace at the rear of the current roofline. An early buyer could opt for three ensuite or use all of the first floor space for a huge open-plan lounge-diner.
b) The village in which this property lies is one of the best kept in the Oleiros area. Properties move fast locally and there are many Lisbon-based buyers with links to the area. A modern design in an old building is a marketable option.
Q. Which is the prettiest place you have worked in?
A. Definitely, the village of Alge, Figueiró dos Vinhos, where we have renovated Vine House.
The neighbours in Alge were very supportive during some often-noisy renovations, the feeling of community was palpable and the weekly commuters and holiday home owners are as much a part of village life as those that live there full-time.
The two-bedroom house plus separate studio that we renovated is super sweet also, ideal for those who love countryside but only ten minutes to the market town of Castanheira de Pera, the council capital.
The purchase price of only €120.000 makes appealing sense when you analyse rental yields in this beautiful area.
From a business viewpoint, rural tourism offers a better return than many investments in Lisbon or the Algarve where punishingly low yield of around 5% is seen as 'doing OK' in the current market. The reason for this enhanced performance is the lack of rental properties in a growing tourist area combined with low asset cost.
The Rural Properties process is simple for an investor who wants to have fun and fund a property renovation. We agree on a property that suits the investor’s budget, Rural Properties buys the property, renovates it and sells it; the net profit being shared with the funder as detailed in a legal agreement.
Published on Algarvedailynews.com