Investing in Monte Santo

[Lysos]

Based on the information provided on this thread and the advertised rental rates I've been looking at the figures, and as an investment it just doesn't stack up. It appears that the advertised rates are around half of what you were 'advised' by the selling agents, and even allowing for discounting to attract customers in the first year, I don't see doubling the rents in the next year as a viable proposition.

Lesrt's look at some figures:

Purchase price - 240,000 euros

Purchase costs @ 10% - 24,000

Furniture Pack - 24,000

Total cost - 288,000 euros

To get a 5% return you will need to clear 14,400 euros per year.

Advertised rental rates for a week in August: 1,338 (ignore the fact I can rent a luxury detached villa for this amount).

Less 25% marketing costs leaves - 1,003, of which you get 60% i.e. 602 euros, less 55 euros maintenance = a grand total of 547 euros before tax,
and that is a peak season week; a little less than the promised figures of well over 2,000 !.

Best of luck to you all.

 

[flowgogranny]

Hi We have bought a T2 appartment does anyone have any idea what the furniture pack looks like I have heard it will be completely different from the two show houses and also we will not have any choice to mix and match as we were lead to believe from sales staff cant seem to get any information from managment in Monte Santo

 

[JAIABEDO]

I am not sure that your figures are correct. We are buying a T2 and met with Azy Leite in May. We were led to believe that the marketing costs we pay actually equate to being the discounted rates that you see advertised on web sites. i.e. If we had been told that out T2 was going to rent for 2000 euros a week in high season but it is advertised and rented out for 1500 euros a week, the marketing cost is then 500 euros, we will then still get 60%of the 1500 euros. You do not take off the 25% marketing cost from the advertised rates that you see.

Based on the information provided on this thread and the advertised rental rates I've been looking at the figures, and as an investment it just doesn't stack up. It appears that the advertised rates are around half of what you were 'advised' by the selling agents, and even allowing for discounting to attract customers in the first year, I don't see doubling the rents in the next year as a viable proposition.

Lesrt's look at some figures:

Purchase price - 240,000 euros

Purchase costs @ 10% - 24,000

Furniture Pack - 24,000

Total cost - 288,000 euros

To get a 5% return you will need to clear 14,400 euros per year.

Advertised rental rates for a week in August: 1,338 (ignore the fact I can rent a luxury detached villa for this amount).

Less 25% marketing costs leaves - 1,003, of which you get 60% i.e. 602 euros, less 55 euros maintenance = a grand total of 547 euros before tax,
and that is a peak season week; a little less than the promised figures of well over 2,000 !.

Best of luck to you all.

 

[JAIABEDO]

Hello Vanessa,

We have not paid for any of our furniture pack yet, although we were late in signing our contract (February this year) our contract states first instalment due 4 months after signing contracts.

With regard to the snagging survey, Azy put us in touch with a company called Densham Moreira, who have supplied us with a quote for carrying out the snagging survey. They can be found on the internet if you put their name in to a search engine

Hi Mike & Angela

When you refer to the rental scheme are you talking about the straight forward 60/40 split scheme or are you talking 5% guaranteed return scheme?
We are on the 60/40 split and our deadline for the furniture package money in 2 installments was January and March. We seem to have parted with our money a lot earlier than others?

That aside can I just raise the issue of snaging. Do you have an independant looking at the snag list for you. The agents with the three letters are expecting to do this for us (for a fee) but we are nervous at letting them anywhere near it. Would be grateful for any suggestions as to who could look at this for us as we will not be around in Portugal at that time.

Many thanks
Vanessa

 

[JAIABEDO]

Hello,
Where did you get your information that the furniture is going to be completely different to that in the show home? We have been told on more than one occassion by the sales staff and Azy Leite that the furniture will be exactly the same as the show home. We were also given a detailed list of what furniture/fittings would be included in the price of the furniture pack.

Hi We have bought a T2 appartment does anyone have any idea what the furniture pack looks like I have heard it will be completely different from the two show houses and also we will not have any choice to mix and match as we were lead to believe from sales staff cant seem to get any information from managment in Monte Santo

 

[JAIABEDO]

Hello Rikki,

Nice to read a positive message about the resort, there appears to be lots of negativity on this forum about this resort and the rental rates in particular! We agree with you on the rental rates, we need to get people through the doors and recommending the resort to othe people before the rental rates can be maximised. We will also be there in late June (22nd to 28th) and are still hopeful of staying there if only for a couple of days towards the end of our stay.

Hi Vanessa

I have also just received the 08/09 rental rates and the other info. We, and other owners whom I have spoken with, have been advised that the year 1 rental rates are lower than they will be in subsequent years to enable the resort to get bodies through the door to bring in some rental returns asap, and also to establish a client base.
Given that the doors will only be opening on 1st July at the earliest this would seem logical.

We have also signed a 3 year draft rental agreement. Our lawyer is a relative of a friend from home

The resort is moving along very well. The townhouses are virtually completed and landscaping of that area was starting while we were there. The apartments, although not as advanced, are also nearing completion and should be ready by the end of June. We were very impressed with the outdoor pool area and the clubhouse. The pool integrates into the clubhouse balcony area via a large set of curving steps. The clubhouse itself looks huge and I believe will be a major selling point for the resort, differentiating it from other "similar developments". We will be back in late June by which time we will hopefully see a completed development - unfortunately it doesn't look like we will be staying there.

Hopefully meet up with you at some stage in the future

Regards
Rikki

 

[Lysos]

JAIABEDO,

I am using figures provided by posters on this forum. Let's ignore the posting by Ourhomealgarve who can furnish your property for 3,500 euros as opposed to the 24,000 euros being charged by the developers. (I accept you get what you pay for, but 24k is ridiculous, especially as on a rental property you may well have to refurb every 5 years or so, i.e. you need to set aside 5k per year for refurb.).

However, jaycee posted, "Imocon intends to deduct marketing and commission costs from rental income before the 60/40 split".

Whatever, my figures are far closer to reality than the b'@[+*&^t you were fed by the sales rep. If you complain, they will tell you that nothing was guaranteed in writing, the global credit crunch has changed the market etc.etc. Bottom line - they told you what you wanted to hear to close the deal. A modicum of research on supply/demand/rental returns would have shown you that the 'promised' returns were totally unrealistic.

I love the Algarve - grabbed a quick 4 days last week thanks to Easyjet's deal of £39.98 return, but why on earth would anyone pay 2,300 euros a week for a 2 bed apartment (not on the beach) when you can book a peak season (August) week in a 3 bed, 2 bath, detached villa, with private pool, sauna, two terraces, barbecue, grape vines, fig trees, pomegranites etc. on a 2 acre plot, 10 minutes from the beach, 2 minutes from 5 star golf for little more than half that amount ?.

 

[DrQ]

Rental Rules

Hi Folks,

I just want to check to see what anyone else as heard so far about rules in regards to renting out your property.

I have been informed that the existing leasing company's position is that you either rent out via the agreement that they have to offer or the property can only be used for your own personal use.

This was not what I was originally told and I just wanted know what everyone else had heard about this.

Regards

Rich.

 

[chrisandchris]

Hi Rich

I have just signed up to this forum and have been reading some of the posts with alarm. We are buying a 2 bed town house and haven't signed up to any rental agreement. We were under the impression that the site was owned by Hilton and weren't aware that they had pulled out. We certainly haven't heard anything about not being able to rent the property out privately, which is exactly what we intend to do. There seems to be a total lack of information and communication from Imocom.

I have received a poorly written letter from Imocom today stating that the property is now complete and that 'the public deed will take place' on 3rd September in Lisbon. No other details AND they have the wrong plot number on the letter. Doesn't fill me with confidence. There are definate questions that need to be answered before we part with the final installment.

Regards
Christine

 

[day&jones]

Hi All

We also rec'd the same poorly written letter. I have questioned what happens beween the resort being open and the deed transfer in September. I believe IMOCOM will be writting to us to seek our permission to start to rent this out between opening and September. It would appear that any rent is "pooled" together and distributed accordingly.

We signed up for a guarnteed rent return over 3 years, again keen to see how this plans out.

I also received another letter today from IMOCOM with some sample photo's. Just hope that the interior furniture pack is not the one that's going into ours as we were told it would be the same if not similar to the show house which is also shown on various web sites. Again I have raised this with Azy. I'll let you know the response - he is fairly good at responding and his written English is good

Regards

Simon

Hi Rich

I have just signed up to this forum and have been reading some of the posts with alarm. We are buying a 2 bed town house and haven't signed up to any rental agreement. We were under the impression that the site was owned by Hilton and weren't aware that they had pulled out. We certainly haven't heard anything about not being able to rent the property out privately, which is exactly what we intend to do. There seems to be a total lack of information and communication from Imocom.

I have received a poorly written letter from Imocom today stating that the property is now complete and that 'the public deed will take place' on 3rd September in Lisbon. No other details AND they have the wrong plot number on the letter. Doesn't fill me with confidence. There are definate questions that need to be answered before we part with the final installment.

Regards
Christine

 

[DrQ]

5% Guaranteed Rental Agreement

Can anyone give me any more information on the 3 year guaranteed rental return agreement? This is something I have heard nothing about!

Thanks

Rich.

 

[Davyjo]

I understand that there are different deals. There are a limited number of deals which include 5% rental returns. I had already agreed with *** last July(with no rental guarantee),but saw and advertisment in the "Portugal" magazine offering 5% rental return with Headlands in August. I phoned to enquire, but they told me there were none of these offers left. I can only assume that these were promotional offers.

Can anyone give me any more information on the 3 year guaranteed rental return agreement? This is something I have heard nothing about!

Thanks

Rich.

 

[day&jones]

Hi Rich

When we purchased ours last June, we were told that we were one of the last to be accepted on the 3 year 5% return

Regards

Simon

Can anyone give me any more information on the 3 year guaranteed rental return agreement? This is something I have heard nothing about!

Thanks

Rich.

 

[jaycee]

After visiting the MS resort in April I discovered that the 'Rental Agrrement' makes referrence to the 'Transfer Price' being paid annually, which means the rental monies.

Is everyone else aware that they have to wait a year before they see any income from their unit? I didn't and told Imocom that this was not acceptable.

I would be interested to hear other investors thoughts on this.

 

[day&jones]

Hi

I understood these payments would be paid twice a year.

Simon

After visiting the MS resort in April I discovered that the 'Rental Agrrement' makes referrence to the 'Transfer Price' being paid annually, which means the rental monies.

Is everyone else aware that they have to wait a year before they see any income from their unit? I didn't and told Imocom that this was not acceptable.

I would be interested to hear other investors thoughts on this.

 

[JAIABEDO]

After visiting the MS resort in April I discovered that the 'Rental Agrrement' makes referrence to the 'Transfer Price' being paid annually, which means the rental monies.

Is everyone else aware that they have to wait a year before they see any income from their unit? I didn't and told Imocom that this was not acceptable.

I would be interested to hear other investors thoughts on this.

If you look in the frequently asked questions book that we all received, it does actually state in there that it will be paid twice yearly in January and July, unless they have since changed this. We are meeting Azy on Monday 23rd June and will try and clarify this at that meeting

 

[day&jones]

Hi

Can you do me a favour and check out the situation with the furniture pack? After receiving the photo's of the interior in the last info pack, it looks nothing like the show house furniture. I have to written to Azy and he has refered me to someone else and they have stated it would be 5 star. I have responded to say is it the same as the showhouse. Had no responce as of yet, but being fair it was only early this week I send the reply

Also keen to see how far away you think the place is from being up and running

Thanks in anticipation

Simon

If you look in the frequently asked questions book that we all received, it does actually state in there that it will be paid twice yearly in January and July, unless they have since changed this. We are meeting Azy on Monday 23rd June and will try and clarify this at that meeting

 

[blackersmanda]

Hi Vanessa,
sorry we didn't reply to your thread sooner, but normally when there is a response to our threads, we get an email from the forum notifying us of this. In this case we didn't! However we signed up for a 1 year rental agreement with no guaranteed income. rather foolishly (in retrospect) we joined the "agent with 3 letters" after sales scheme, so they will (we hope) do the snagging for us.
The snagging is supposed to happen before the furniture is installed just in case any problems arise. We are hoping to go out after the furniture is installed to check the snagging , and furniture, and be the first to stay in our apartment. We're still chasing Azy to get him to organise this before the rentals comence.

regards

Mike and Angela

Hi Mike & Angela

When you refer to the rental scheme are you talking about the straight forward 60/40 split scheme or are you talking 5% guaranteed return scheme?
We are on the 60/40 split and our deadline for the furniture package money in 2 installments was January and March. We seem to have parted with our money a lot earlier than others?

That aside can I just raise the issue of snaging. Do you have an independant looking at the snag list for you. The agents with the three letters are expecting to do this for us (for a fee) but we are nervous at letting them anywhere near it. Would be grateful for any suggestions as to who could look at this for us as we will not be around in Portugal at that time.

Many thanks
Vanessa

 

[ramanam]

Completion Date??

Has anyone been over to see the resort ? and if so any more information regarding completion date??
Have been overseas for 3 weeks and curious to what developments are.

Regards
Mr Roy

 

[Les B]

Has anyone been over to see the resort ? and if so any more information regarding completion date??
Have been overseas for 3 weeks and curious to what developments are.

Regards
Mr Roy

Hello,

I am flying out to look at the Resort between 11 - 17 July. I have a meeting with Azy during the visit, on my return i can give you an update if you wish.

Kind Regards

Les B