We are about to pull the trigger on investing with a developer that has built their business around GV applications. They insist that the investment is safe, similar to Mercan, because they have no debt. But because the GV program is ending, they are converting from a developer to a property management company. The property we are looking at is in Madeira, and still has available units. They insist the region is hot and even if it is not filled with GV applicants, they will find local and international investors to fill the final slots.
Are any of you in similar situations or more familiar with these types of businesses in Portugal, and have a sense of the risks involved here? The developer makes it sounds like there is no risk, but it’s not in their interests to say so, so we are looking for outside opinions.
@cheshirekatjo , you would need to provide more information on the project in order to get a better response.
While many developers tailor their projects for GV, it’s not exclusive to GV investors. The challenge is that GV investors have citizenship/PR as their goal and getting some return is secondary - mostly the concern is capital preservation. As such many projects don’t maximize investment return.
Non-GV investors would be looking at yield and ROI of their investment as their primary motivation. It’s not mutually exclusive but for the latter it would typically be a freehold unit that is already, or about to, generate income. Developers have been using GV investors as an inexpensive way to finance their projects and make the real money when they ultimately sell it.
We understand that there is very little risk with the property and construction not being leveraged, but in the case that the company collapses, say do to corruption or some other unexpected circumstance, how would this affect the GV process? Our ownership of the building is only 170k and the rest of the 350k was earmarked to go to construction. If there is no planned construction anymore, how does this affect the GV process?