Best beach town in Bahia for future investment?

    Hi guys  i am looking to buy something in a condominium in one of the beautiful beach towns in Bahia ..  i already have an apartment that i bought in Vitoria Espírito Santo but looking to build a home in a more tropical beach setting i have been to Trancoso, Itacare , Morro de São Paulo and will be headed to Imbassai in a few weeks .. Looking for something that is not already over developed and overpriced but a beautiful beach town that is on the verge of some real growth. in Itacare for example , developers wanted 100K USD just for a plot of land in a condominium which before even building a house . Any thoughts / suggestions would be appreciated ! Thanks!
   

    -@APATINAGE

Are you thinking to use yourself, or make a profit?

I don't know much about the area personally, however you may want to begin your research with the FipeZap index.  They publish monthly reports on property price appreciation, average price per SqM, etc., for major cities all over Brazil.

Here are the reports:

https://www.fipe.org.br/en-us/publications/reports/#relatorio-fipezap

Page 17 of the Jan 2024 report shows a heat map of Salvador neighborhoods and their prices, as well as price appreciation over the past 12 months by neighborhood.  The reports may not hit specific markets you're looking for, but it might give you an idea.

I live in SC, where the north coast area has done quite well.  A couple things which have been indicative of future price appreciation here have been high end residential real estate development, as well as public works projects. Cities nearby such places have also done well in the same area; Bombinhas, for instance, is near Itapema and Balneario Camboriu, has appreciated about 15%/year over the past 5 years and hasn't had major projects, but does have nicer beaches and cleaner water.

Investing in real estate for appreciation is quite speculative, so none of that may pan out despite good indicators. You'd likely want to ensure the possibility of good cash flow from short term rentals to hedge the bet on appreciation.

I live near some of those areas but thankfully not on the beach. I would urge caution. construction can be a nightmare finding reliable professional work and quality materials. shoddy work, subpar materials and outright scams are common. maybe wealthy investors have access to things that are off my radar but i hear stories and out in the hills quality is nonexistent.

02/21/24 @APATINAGE.  Welcome!  For information -- and perhaps as a cautionary tale -- about building in a condominium in a Brazilian resort, I recommend checking out this thread started by someone who's doing exactly that in Búzios, RJ:

https://www.expat.com/forum/viewtopic.php?id=884159

As near as I can tell, @fred2brazil has done and is doing everything right, and is approaching move-in condition for the house.  But he's also four years into the project.

@APATINAGE

Hello there, I'm a Real Estate Lawyer in Bahia and I have just finished the Realtor course.

Bahia is definitely one of the best, if not the best for your investment objective. All of these places you mentioned are great options. I live in Vilas do Atlântico (Lauro de Freitas), it's beautiful, safe and very close to Salvador airport, I highly recommend taking a look at this region too.

If your focus is to save money, choosing a less popular location, I would consider Jauá or Arembepe as well.

I live in Ilhéus Bahia. Lots of construction here.

Alan

R$500K just for dirt in the NE of Brasil seems utterly insane to me. What do I know. The coastline pretty much looks the same everywhere you go, and there is still a lot of it.

I can't offer a recommendation, just confirm the same observation as you have made. So, are you getting quoted the gringo tax, as you are using a USD value in this post ?

    R$500K just for dirt in the NE of Brasil seems utterly insane to me. What do I know. The coastline pretty much looks the same everywhere you go, and there is still a lot of it.
I can't offer a recommendation, just confirm the same observation as you have made. So, are you getting quoted the gringo tax, as you are using a USD value in this post ?
   

    -@Gasparzinho 777

Ordinary 450m2 lots sell for R$250k in Ilhéus. There are hundreds of lots for sale. Close to the beach. Close to the airport. 

São Paulo beachburbs. 😀

On Araruama (and other areas) near Cabo Frio, you can get a beautiful 120 m2 legally titled house on a nice lot for R$500K that is roughly 2 blocks from the beach.....   

    Hi guys  i am looking to buy something in a condominium in one of the beautiful beach towns in Bahia ..  i already have an apartment that i bought in Vitoria Espírito Santo but looking to build a home in a more tropical beach setting i have been to Trancoso, Itacare , Morro de São Paulo and will be headed to Imbassai in a few weeks .. Looking for something that is not already over developed and overpriced but a beautiful beach town that is on the verge of some real growth. in Itacare for example , developers wanted 100K USD just for a plot of land in a condominium which before even building a house . Any thoughts / suggestions would be appreciated ! Thanks!
   

    -@APATINAGE

I would avoid buying any land parcel developments in coastal towns. Period

If you must have your waterfront property, look after places that already have  prior deep settlements.  That, in paperwork terms means, while you scan at the transfer of deed ( aka Matricula), you want to make sure it has two prior transfers of proprietroship deep, and each one of them well spaced out in terms of transaction dates. 

Why, you may ask....

1.Coastal towns and land in the Amazonian basin region are rife with cooked up property records, meaning forged documents.  And if you think a piece of paper will save your deeded rights, you've got something coming.

Here's a good real life situation, recently taking place in Rio de Janeiro's State Coastline. 

https://www.metropoles.com/colunas/guil … aradisiaca

If you need translation, then ask.   

In short, someone who bought the property outright in cash had it taken away because someone else more powerful wanted his legit  bought property. 

These locales lack proper rule of law and enforcement. Green horns are to be taken advantage of at all times.

2.Your occupation will be at the expense of displacement of communities that already existed there, perhaps  for centuries. Namely fishermen. They might not have the paperwork, but they were the original settlers, and while at it, they had done nothing against the local ecosystem. 

3.Waterfront occupations lack proper infrastructure. Sewer lines are run straight to the ocean. There are beaches in Sao Paulo's coastal towns that from time to time are blocked for swimming because of bacteria outbreaks.

4.Beachfront settlements do cause environmental damage to coastal ecosystems, particularly through their marshland . If any doubt, look what has been taken place in Florida. Sprawling condos inland through marshland and as result, now South Florida, or the entire State, have no natural sponges to absorb high tides.

By building your monstrosity to your likeness, you are in fact constribuiting to the destruction of fragile ecosystems. All you need to see is how modest and not resource intense are the habitations of existing dwellers, the fishermen. They don't build expensive and resource intensive sprawls.

And if you think for a moment you are free from worries, see the example beneath, that just took place in Sao Paulo's Sao Sebastiao, in 2023.

https://g1.globo.com/sp/vale-do-paraiba … stre.ghtml

5.Bahia is no longer a place where land grabbing hucksters and carpetbaggers can get away in building whatever they want on coastal land. A call to the local SEMA ( Secretaria do Meio Ambiente , or Environmental Authority )    http://www.seia.ba.gov.br/institucional … -ambiente, by some malcontent, and you ill conceived project gets stalled, and your purchasing documentation brought in question.

You are a coastal creature, find a home that already has been built, probably needing repairs, with paved street, sewer lines,  street ligh   and make sure to  run the check through the City, County ( Comarca ), and State. Everybody out there is out to fleece you.

And as far as taking advice of your countrymen, make sure they do not have skin in the game as for the locale you seek to settle.  There is always a wannabe   Bernie Maddoff lurking everywhere out there.

And your " beautiful beach town that is on the verge of some real growth" means, buldozing what's already existing to make way to something that is highly destructive. 

I am a licensed Real Estate Broker in Sao Paulo, do not trade on your neck of the woods, and would not risk my license in such a shady game out there.

    Hi guys  i am looking to buy something in a condominium in one of the beautiful beach towns in Bahia ..  i already have an apartment that i bought in Vitoria Espírito Santo but looking to build a home in a more tropical beach setting i have been to Trancoso, Itacare , Morro de São Paulo and will be headed to Imbassai in a few weeks .. Looking for something that is not already over developed and overpriced but a beautiful beach town that is on the verge of some real growth. in Itacare for example , developers wanted 100K USD just for a plot of land in a condominium which before even building a house . Any thoughts / suggestions would be appreciated ! Thanks!
   

    -@APATINAGE

And by the way.....

Beach front properties are fair game for break ins and a sweet spot for burglars. 

You are then forced to take in a custodian, a local, and bribe with with cash and perks.  and that alone does not guarantee you burglar free property. 

That and the fact you will end up paying for a cleaning maid, because your Brazilian guests partied and did not care about turning the way they found it. 

    I don't know much about the area personally, however you may want to begin your research with the FipeZap index.  They publish monthly reports on property price appreciation, average price per SqM, etc., for major cities all over Brazil.
Here are the reports:
https://www.fipe.org.br/en-us/publications/reports/#relatorio-fipezap
Page 17 of the Jan 2024 report shows a heat map of Salvador neighborhoods and their prices, as well as price appreciation over the past 12 months by neighborhood.  The reports may not hit specific markets you're looking for, but it might give you an idea.

I live in SC, where the north coast area has done quite well.  A couple things which have been indicative of future price appreciation here have been high end residential real estate development, as well as public works projects. Cities nearby such places have also done well in the same area; Bombinhas, for instance, is near Itapema and Balneario Camboriu, has appreciated about 15%/year over the past 5 years and hasn't had major projects, but does have nicer beaches and cleaner water.

Investing in real estate for appreciation is quite speculative, so none of that may pan out despite good indicators. You'd likely want to ensure the possibility of good cash flow from short term rentals to hedge the bet on appreciation.
   

-@BRBC

FIPE Zap does not cover these remote locales.  It's mostly large metro areas. 

And their numbers are not thaty great, highly eschewed. 

    Hi guys  i am looking to buy something in a condominium in one of the beautiful beach towns in Bahia ..  i already have an apartment that i bought in Vitoria Espírito Santo but looking to build a home in a more tropical beach setting i have been to Trancoso, Itacare , Morro de São Paulo and will be headed to Imbassai in a few weeks .. Looking for something that is not already over developed and overpriced but a beautiful beach town that is on the verge of some real growth. in Itacare for example , developers wanted 100K USD just for a plot of land in a condominium which before even building a house . Any thoughts / suggestions would be appreciated ! Thanks!
   

    -@APATINAGE

Unsolicited advice.  With a Benjamin Franklin Ledger twist. Take at your will.

If you are on an investing game, and fancy something  on the coastline, then seek out opportunities for redevelopment, particularly in historic settlements. 

The only problem in dealing with these type of properties, I might say the only two problems are....

1.Paperwork at times can be convoluted. Properties that have liens, you can't buy them. Period.

2.Repair can be costly, on account of disrepair, and sometimes, if the property is landmarked, you can only do rebuild on specs set  upon by the local authority. Which can be a combination of Condephaat, and a local Autharquy.  And that makes repairs expensive. You can't hire Joe the handyman.

The upsides....

1.Brazilians severely undervalue these properties.  Until is to become fashionable, they can't see value. You, on the other hand, if having an eye for these holdings, can have the upper hand on buy cheap, sell high. Try to think in terms of what has been done to South Beach Art Decol District  in Florida from the late seventies and beyond. The orignal investors made out like bandits.

2.For rental income purposes you will have a far more stable rental income base. No seasonal rentals.  No costly repairs. No shady characters dealing out of your home.  You will have a healthy tenancy mix, varied, and in line with your investment expectations.

3.Your street credo with locals, your stock,. will rise significantly. Locals appreciate more someone who injects money into a decaying community than someone who destroys their natural resources.  That opens up the door to a lot of invitations on local circles, and a lot of deals to pursue.

4.Sometimes, in specific cases, there might be some kind of redevelopment incentives set forth by municipalities or State.  I know Santos has, Rio is looking into. Others will follow.

5.You don't have to worry about infra-structure. It's already there.

6.Real gains in Real Estate Invesing are not simply based out of rental income or by flipping property. It's the sum of both. Gain rent plus profit on resale is the real yardstick for a successfull Real Estate Investor. Cash on Cash Returns.

7.While this is not for quick buck artists, it will lead you to long term riches. This is one way to build generational wealth and bring in prosperity to underserved communities.

@sprealestatebroker

"-@BRBC

FIPE Zap does not cover these remote locales.  It's mostly large metro areas.

And their numbers are not thaty great, highly eschewed. "

Do you know of a better alternative?

@BRBC

    @sprealestatebroker
"-@BRBC

FIPE Zap does not cover these remote locales.  It's mostly large metro areas.

And their numbers are not thaty great, highly eschewed. "

Do you know of a better alternative?
   

    -@BRBC

None, i confess. 

it's a gut feel, you need to be around see what is being sold for .  And asking  sellers ( owners ) for how much they sold for, well, they won't tell you.. You will have to ply them with drinks get them a hooker.

There is no such thing in this Country as MLSPIN database. Most of the data out there combed for these indexes  is based upon asking price. Which means diddle squat as for what real data is concerned.

In America, most licensed Real Estate Brokers subscribe to the MLS database, because is there where they can fish for expired listings. 

And it's also where you can pull data for  comps when you visit a potential seller to get the listing and reason pricing . Those comps are based on closed deals. The outliers are pocket listings. And FSBO properties ( Read FEEEZBO).  But for the most part, they reflect on real time marketplace pricing.

The only source of closing prices you can get your hands on, are in fact, from seasoned brokers who have a history of closings in the area, And as they talk shop., so their coleagues. 

Now, you might think brokers  have all the motivation to gouge in prices, as their commissions reflect the negotiated price where is derived upon, right?

True to be told, the only time I run up prices, where when I had the exclusive listing. After all, I am representing the seller.  But at least in Sao Paulo, nary a listing is given out as an exclusive.  The overwhelming number of brokers want to close and run with their checks.  Which means, for them, to drive town pricing to land a closing.

As far as these places on the boondocks, I have no idea how things are done.  In Sao Paulo-Rio, the way I just described it is the way it goes. 

Do not be impressed by lofty titles, company names, claims to fame out here. Most of the time, they are full of it.

Your ZAP/FIPE, is data from their owned portal listings.  No closing goes through their Mickey Mouse Databases. They are not log databases.  They are not NYC's City Realty , or Costar subproducts. \

The real numbers are combed by Cartorios ( Registries of Deeds ), and Hell or Hight water they won't divulge  their data to anyone, let alone sell it. Their racket is guaranteed, it is a generational business, and they are not about to lose their license to print money because some huckster wants to get their hands on good data.

Now, I do not care about these backwater places,  no matter how lush and gorgeous they are, so we probably will never cross paths.  But my reputation always stands, and it is my trading currency.

You will have to do the homework, so get the best help you can in your neck of the woods.  And that is all I can tell you. Anyone else giving lip service is full of crapola.

@sprealestatebroker

I will share my anecdotal data points related to listing vs. selling prices. I'm sure you have much more info to offer, and I would be interested to know what you've seen.

I have bought two properties in Brazil and sold one.

I have in laws that have bought 9 and traded one.

In both my purchases, I have offered cash and requested 20% off asking and got it.  On the property I sold I accepted an offer for cash for 18.3% off asking. 

My in laws just got an offer on one of their properties for cash, and it was 33% below asking, but that hasn't been fully negotiated, and arguably their asking price was too high.

In my experience an asking price range was suggested by some agents, but that said, other agents just asked us what we wanted for the place without offering guidance. I set the price by comparing asking prices of what I considered comps using imovelweb and vivareal. My analysis was very similar to what an agent's opinion was of the valuation; everything matched up pretty well.

The more exotic transactions I know of relate to my in laws.  In one case they traded a boat for part of the value of a property.  In another case they traded one of their apartments in exchange for part of the value of a house they were buying. In both these cases they got a premium over what the assets-in-trade were worth, in my opinion. However the they 'paid' asking price for the properties.

So it seems cash is worth more towards a discount on asking price.  Trades will be valued by a seller at a premium to get a deal done, as long as the property is ultimately purchased at, or close to, asking price.

With respect to cartario data, for what its worth, It's my understanding that it is common practice for buyers and sellers to under report the selling price of a transaction, in order to avoid some portion of taxes and closing costs related to the sale of a property.  If that's right, then perhaps the cartorios are the best source of data, but not a real 'source of truth'.  Only the brokers really know what is happening in the market, but there is no way to aggregate that information.

For the home buyer, here are some good indications and references to be had to check recent prices.

The first, as we has been stated previously, is to use a bilingual fully CRECI licensed real estate broker in the locale you want to buy. If you cannot find one, walk away - do not try to bring one in from another area. The vast majority of real estate listings are not exclusive in Brazil, since the seller always thinks he can get a better price by himself, and does not want to pay commission if he is successful (almost never!). So local successful brokers are a great way to find out about local price trends, and to offer price comparisons from their experience as they are not trying to sell their own listings.

Real estate law is Federal, so all cities, large or small, everywhere in Brazil, will be governed in the same way. So whatever happens in SP or Rio is exactly the same as everywhere else. Perhaps in some remote areas mayors may have some swing over the local notary, but this is an extreme situation, and unlikely to effect the international investor.

The trend of (illegally) under-declaring values is starting to disappear. Town Halls have had for many years the ability to say that a sale value has been under-declared, and charge transfer tax (ITBI) on what they believe the value should be (always a higher one), based on a local standardised formula. This higher value is then used by SPU to establish the laudemio to be paid (if any). The notary will then record these 2 different values in the escritura (one as declared, the other as fiscalised), but will also charge on the higher value... So no more closing costs savings through under-declaration!

The escritura is a public record, so anyone can pay to receive a copy, and can therefore check on these details.  There is also a shorter and cheaper certificate document, and that has some of the details if you want to check who the recorder owner is. Very important that this is checked before signing any deal...

Can you trust the local real estate notary (Cartorio)? Certainly you should. They are seen as above the law, and are one of the few officers in Brazil that does not have to have their signature authenticated on real estate documents...