Golden Visa Hotel Investments

I do not see any discussion of investing in commercial enterprises as a pathway to the Portugal Golden Visa.

Investing in a hotel seems to fall between residential property and a GV fund.

Here are a few seeming advantages and a few links…

  1. Currently, it appears that 280k euros is the minimum investment in a low density area. Obviously higher in other areas.

  2. There is a minimal “dividend” of 3% or more during the holding period. My understanding is that it could be more, based on operations (please feel free to correct this understanding if you have more accurate info).

  3. The developer guarantees buyback at the end of the GV period, so there is an exit strategy…

3.5 If you choose carefully, you can invest with an experienced property operator - such as Marriott.

  1. Net, you are out of pocket about ~ 20k euros at the end of the holding period, minus any dividends you received. If your dividends are higher, there is a chance it will cover expense or be greater.

  2. You have no responsibility as you would with maintenance, taxes, utilities, etc. on a residence. It is something of a one stop shop.

  3. You do not worry about renting your property out. The hotel operator has an existing system to fill their hotels.

  4. You generally are allowed 7 days in the hotel personally.

8. Commercial/touristic properties are not restricted for the GV in the areas being limited going forward. Just residential. Investment minimums are higher in these areas. (Again, correct this if you have additional info).

  1. as an observation, some of these same advantages apply to GV funds…

Comparing the Hotel investment to the Funds.

  1. I was involved in the fund/investment arena for my career - hedge funds, property funds, mutual funds, etc. I was both an investment manager and an owner. I’ve seen the good and the bad.

  2. Operating a successful fund in a changing environment is the risk. The best measure of future success is past success doing the same thing. If you are considering a fund, make sure they have done this successfully in the past. Most strike me as new. You may be comfortable with that…

  3. In both cases, what happens in the future will depend on the terms of what you sign and whether the operator can fulfill the terms of the agreement. Things occur that make it difficult or impossible for the operator to fulfill their contract.

  4. An advantage of the funds may be that more than one location is involved and may add some measure of diversity or stability to the fund. Hotels are one location.

I’m evaluating this from the my individual needs perspective:

  • I am not going to be resident in Portugal during the 5-6 year period, so I won’t be present to examine my residential property or do maintenance.

  • I want my funds back, which implies I must accept less risk.

  • If I were going to live there, I’d buy a qualifying residence. If in the future we were to make that decision, I’d reuse my hotel investment after my exit.

  • I know too much about funds to be confident about receiving all my money back at the exit and the real estate environment in portugal currently is closer to a high than a bottom.

  • I am comfortable in owning businesses and know the importance of experienced and competent management.

  • YOUR criteria may differ widely from my own, so don’t take my thinking as absolute or critical of a decision you arrived at personally.

  • There are ALWAYS tradeoffs. Know them before investing.

I will post a couple links to hotel projects with the following caveats:

  1. I have nothing to do with any project. I googled them up.
  2. I do not recommend any and I’ve not decided on these or any other yet.
  3. DYODD!
  4. There may be better hotel projects than these. It may be that only the projects with the best SEO appear in search engines first.
    I have no connection to a legal firm, GV firm, real estate firm, etc. I’m just a guy asking how I will get my money back at the end of 6 years and possibly have cash flow along the way.
  5. I don’t know anything about the example projects personally.

Love to hear anyone else’s thoughts about this, agree or disagree. and why your choice weighs factors differently.

General search engine link: portugal golden visa hotel investment at DuckDuckGo

Example: https://www.goldenvisas.com/investment/golden-visa-hotel-investment

[I’m informed as a new user I can only include 2 links, so this is truncated]

There’s quite a bit of discussion in this thread -

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Thank you for the link Jeff!

Has anyone here invested in a hotel project?
Has it gone according to expectations?
Any words of advice from experience?

Thanks to all
David

1 Like