PORTUGAL REAL ESTATE:

INVESTING FOR YIELDS AND

MANAGING INVESTMENTS

LIO CONFERENCE

CARVOEIRO, ALGARVE, PORTUGAL

Crisis and opportunity, property rebounds

1. USD consistently high levels against the Euro, around €0.90 (90 cents), and has been trading in the 87-95 cent range since Jan 2015

2. USD at historically high rates against the Pound (70-78p+) due to Brexit and a hung parliament. UK buyers now selling to receive proceeds in GBP. As the Pound has fallen, UK sellers are able to discount the Euro price, creating a great opportunity, especially with sellers who bought pre-2008 financial crisis

3. Market most active since 2008. Transaction times low. Prices rising. 1. French are fleeing taxes, social unrest and terrorist threat2. UK buyers worried about Brexit back in the market3. Scandinavians seek sunshine, friendly people and low tax4. Brazilians seek safe currency haven with cultural/language links

1. Historical yields in Portugal are typically 2-4% gross/pre-tax2. Most rental properties operate at high values in the short summer months and

are then left empty in the winter3. Looking for alternative methods of property management can increase yields:

1. Winter rents2. NHR client base3. Year-long rentals4. Winter + summer combination

4. Rental yields can be increased to 5-8%5. Best yields typically in the purchase price range below €200,000, but premium

prices especially for summer rental properties may be a good strategy6. Local lodging legislation and increase in rental properties and sites, means that

competition is fierce. Working with experts in rental marketing is now advisable

Purchasing for rental yields

1. Property management companies tend to be local and deal with: cleaning, client arrivals/departure, key holding, maintenance, sometimes paying bills etc

2. Rental management is often done directly by owners via rental sites or by larger companies who generate bookings. These tend to focus on short-term rentals

3. Larger firms have both rental and property management4. Most firms work on a fixed-fee plus commission basis5. Algarve Senior Living operates a hybrid property management model

• Established for existing investors and clients and expanded to owners of long-term rental properties who need a greater level of service and returns

• Rental management via usual sites + individual web site per property + soon to be group long-term rental site

• Full-service model from property licencing to post-stay accounting-reporting using combination of own team (coordination), local third-party services (cleaning, arrivals/departures, maintenance) and specialised support via network (NHR, accounting, AL)

Property and rental management

Example rental strategy

Example of personalized site

Additional services

ADDITIONAL SERVICES CONTENTS AND APPROXIMATE PRICE*

Telecommunications Obtain best priced package for cable TV and internet, coordinate

sign-up and coordinate installation. from €50 + cost of service

Licencing (“Alojamento Local”) Obtain licence, equip property with safety equipment. from €325 per

property. **

AL equipment installation Incl. fully installed fire extinguisher, blanket, safety kit, fire alarms, and

signage. Inspection visit. from €250 per property.

Management services Ongoing management and property supervision incl. key holding,

airing, repairs management, etc. from €30 p.m.

Invoicing and annual accounting Customer invoicing, reporting to SEF, annual returns. from €400 p.a.

VAT reporting (if applicable for t/o > €10K) additional €130 p.a. **

Non Habitual Resident status

application

Fiscal number, NHR application. from €400 per application.

Fiscal representation Compulsory for non-EU citizens, optional for EU citizens. €150 p.a.

€250 per couple p.a.

Home equipment insurance(emergency electrical and gas equipment repairs,

annual check, lock repairs, spare parts extra)

€40 coordination fee + cost of service from €80 per annum

Buildings, content and liability

insurance

€99 insurance comparison service (3-4 insurance providers) + cost of

insurance* Typical starting values per service, values approximate, may include or exclude local VAT, and subject to change without prior notice. Quotes exclude out of pocket expenses

Current Portuguese investment climate

• Portugal is getting a lot of good press

• Tourism is increasing, 8 record-breaking years in a row

• Prices are going up

• Cheap deals last weeks, sometimes days

• Construction has restarted

• Single-property redevelopment has grown substantially in major tourism hubs. Smart money is on medium-sized (10-25) projects or those with a clear focus (for example, senior independent living or care)

• If you want a cheap deal, be ready to move quicklySIGN UP FOR OUR INVESTOR MAILING LIST

• If you want larger deals with good returns, get in earlySPEAK TO US ABOUT OFF-MARKET OR EARLY STAGE OPPORTUNITIES

For more information

• Visit us at our booth to find out more!

CONTACTS:

Luís da Silvainfo@algarveseniorliving.comwww.algarveseniorliving.com

UK: +44 208 144 7558PT: +351 965 683 054