Investment Property In Northeast Brazil - Purchase Advice

I will give you just a few advices.
Firstly I am not sure what type of people you would like to get in contact with but I won't recommend to work with any people/intermediaries that you could get in contact with on this forum or others. Just use the huge network of estate agents all over Nordeste; well at least you know what their objective is : sell (good or bad stuff) but at least you know it. Then you should learn portuguese and visit the country as much you can. Only you would be able to decide what is good/bad investment. This is very challenging indeed for foreigners to do business here. Brazil is one the country the less open to entrepreneurship and foreigners.
I am living in Ceara but I am not working in tourism but in IT. But a lot of foreigners that I got in touch with were working in tourism/restaurant (I believe 70% in tourism/restaurant and 30% are retired people). So I have got some insight.
You won't see much discussions on pousada/tourism investment on this Brazil forum in English but on the same Brazil forum in French language, you will see all the time, stories of people who did buy a pousada or who would like to buy one. Actually this the dream of a lot of Europeans (mainly Italians, Portuguese, Spanish, French and people from Nordic coutries). And all these stories have a bad end. I and all these people who live in Nordeste for some time would tell you : don't go in this business. Not because you will be ripped off but because it is very very tough.
Not a lot of people make a good leaving of it. Those who succeed bought 20-30 years ago when it was cheap and have been able to buy great land in best location (imagine Jericoacoara 20 years ago). Pousadas owners can just subsist miserably and/or live on their savings and generally go back home after a few years.  Those who can make a leaving, are working 24/7 in couple (wife quite often is Brazilian) and make work all the familly in law without declaring much...reducing cost and taxes. Difficult for an outsider to run a business if competition does not use same rules than you.
Then tourism in Brazil/Nordeste is only 5% foreign (except in Bahia and some special cities like for exemple Jeri) so pousadas are at fully booked at best during Brazilian holidays and during WE (but then you need to be near a big city). Then Brazilans who got the money for holidays would prefer to rent in a proper huge hotel/ressort with all facilities than in pousadas (clearly foreigners prefers pousada...but there are no foreigners). Problem: there are a huge number of new ressorts and no one know if they will be a property crash or not.
My apologizes for this negative feedback but I think that's the reality of tourism business in Brazil. Actually, all Brazilians with some money are investing in US (Miami, Orlando) because it is so much cheaper than Brazil, less taxed and much more business friendly (and all that despite sky high $US). On the top of that : Brazilian economy is the worse for 30 years and government/parlement key people are under corruption charges so not any economic reform will happen in the next year/2 years...
On the positive side: kite is very popular here and Ceara is one the best place in the world for kite. Windsurf is dead, despite that there is a World Champion from Fortaleza, Marcílio Browne (wIndsurf has been replaced by kite). Locals practize surf, but waves are quite small in Ceara. 30-35c all years round. Water 26-28c. Good breeze all year long. No shark. A huge number of pousadas are proposing kite services (lessons, rent or gear storage).
All the best for your projects.

This was very helpful and insightful Bardamu and your English is remarkable! Thanks for the reply.

I agree with you completely. I live in Natal.  I speak Portuguese and I plan on living here for the duration of my 180 visa (and possibly enroll in some university courses in order to continue to live/study here as I look for opportunities).

Your sentiment is the same as others I have spoken with. Investment in Brazil has become a hobby and not a job, which is unfortunate. it's similar to the restaurant industry. Just because someone likes to cook does not mean they should open a restaurant.

I really appreciate the time that you spent to reply and your insights will be considered heavily. The great thing about a down economy, high US dollar and a love for the country is that now is the best time to invest. Brazil will grow and I will grow with it.

On a side note (the word is "living" not "leaving" as in "to make a living".

I owe you a beer. When I'm coming to Fortaleza soon and I make a living as a programmer for SEO, HTML, Native Apps, and C++ if you want to get together and rip out a few lines of code!

Thanks again!

MaxTrax, good night!
I agree with you when you say that this is the best time for foreign investors to invest in Brazil, despite the stagnant economy the real exchange X dollar pays for that very average investor and long term. US $ $ 250,000 today amount to nearly R $ 1,000,000.00 reais, with this value can be specifically talking about real estate purchasing a great residential or commercial property, perched on the beach or even the ground in 02 years at most believe in an increase of at least 30% or more. The crisis in Brazil soon passes, the dollar low, turning normal price at around US $ 1 x R $ 2.00 and only then there is already a value in the acquired property!
In regard to the comment above, it is not because the investment of a French or German in a hostel did not work out that your desire or dream also will not give! It must check the various factors that led the project not work, can the investor does not have aptitude for business, it may have been misled by the seller may be the simple lack of vocation to undertake.
Foreign mounts an inn on the beach in Brazil and the movement falls due to the economic crisis, he has vision in bringing his compatriots, advertise on your country, together with friends, in your city, in your estad the advantages to travel to Brazil and staying in this hostel managed by a native of that country, confidence in travel is strengthened, this is called business acumen, can sell the package in its currency, which possibly generate more profit and consequently maintain even in low season the financial life of healthy inn.
In particular, I am a lawyer and have assisted in the acquisition of foreign real estate among other services and I say, it is the best time for foreign investors to invest in Brazil! Sure must for it to surround yourself with all the care imaginable or not possible, because I am Brazilian and I can say that great care is, acquire a property without the necessary legal advice free can turn the worst business turning a dream into a nightmare. Eg land some distance from the sea can not be owned by foreigners, the various certificates that must be verified for future qeu the buyer does not find that the property seizure suffered by a labor debt of the former owner etc.
Depending on how much you want to invest, taste and the owner build is viable project but, yet again you have to have someone reliable at his side, a good contarto protecting the delays investor in the work, care in hiring masons etc. .
Make available on my blog, some tips regarding the acquisition of real estate by foreigners in Brazil, check my private messages!

I am doing a 4 apt with garage in the Sertao.  My experience has been mixed.  Mostly as a U.S Educated engineer, the lack of automation, adequate tools and basic mechanical skills drives me crazy.  I did my 4th floor last week end.  Imagine doing a bucket brigade to pour a 28 X 8 m concrete floor 4 floors up.  No pumps or concrete mixer trucks are available this far west, so I had to hire 60 guys @R$150/ea to haul the mix up by ropes and pulleys.  I was quoted R$26,000.00/day to rent an empty truck from the coast.  I decided to pass.
As a non native, you will not be permitted to purchase beach front property.  You will be also restricted when you try to purchase a farm.  Farm land and beach fronts are off limits to us.  Of course you probably can use your wife's credentials.
Land and property fraud is a very real possibility and very common in Brazil.  Always visit the local cartorio in order to obtain the details, dimensions, most recent sale price and tax assessment of the property that you are interested in.  You should return later with the seller before you even begin to negotiate or mention a price.  That way you will be in a position to assess if you are being lied to.  If the property is legally obtained, registered and not invaded, there will be a record of the original sale. All subsequent owners with their RG and CPF numbers will be noted on the property record. All taxes due and paid will also be noted.  Any attempt to circumvent this step should be a huge warning that there is fraud waiting for you somewhere.
I built my first house without any interference from the municipal government.  However, today you will need a building permit.  All states that I am aware of, have their own registration process.  Even someone like me with a U.S Engineering Degree was not allowed to design my own building.  You will need to hire a local draftsman to walk your project thru City Hall and the approval process.
Here in lies your greatest frustration.  The drawings cost me $1,000.00/floor.  They were full of mistakes and structural errors.  I paid another R$2,000.00 for the municipal building permit and for the PE's signature. With so many mistakes, it was clear that the city's PE signed the drawings without even looking at what he was signing.
You can, as I did, work around and modify the errors if you are skilled in this area, otherwise you will need help resolving the errors before you have to break lots of concrete.  I did not use most of the submitted design, it showed no creativity.  Just blocks pulled from the CAD library.  I use the package to get by the bureaucracy.  Later I modified the permit to suit my own perception of what my building should look like.   
Your next challenge will be dealing with the workers.  My guy, although he is a craftsman with concrete and cement, he can't read.  Thinking in more than one dimension is out of the question.  Sometimes he can't even think in one dimension.  This means lots of hand holding.  The question is do you have the time required to anticipate the inevitable mistakes?  You can of course hire a building contractor, however that will most certainly double the cost of your project.  The workmen who have Sao Paulo experience will be more expensive.   
In spite of all the challenges, your first world skills can make a difference.  I will give you an example.  The Brazilians pour their roofs solid, then later break holes to install the ceiling lights, then cut channels down to the walls to install the light switches.  On my project, I installed the light fixtures including the conduit connecting the junction boxes before I pour the concrete.  I even installed under the floor conduit to power the electrical outlets for the apt. above.
Recently I saw a neighbor copying my technique.  His whole roof was covered with round light junction boxes and yellow flex conduit.  In a small way I had bought multi dimension planning to the Sertao.
You should look at Paulo Afonso, BA.  Most of what you require are available there, including two big hydro electric dams.  Water distribution is problematic even though there are big dams nearby, you can resolve this problem by installing a 5k liter tank under your garage.   Water filtering systems are readily available for about R$600.00/ea.   You will be approx. 6 hrs by bus from the coast at Recife, PE.

As you are living in Natal would that not be a great place to build a house, as I found this to be less stress than living in Rio I thought Natal was a beautiful place and to me it is one places that Europeans or Americans would love to go there on holiday. I am leaving Rio as the lack of work and the way the country is being run is just very bad .Yes there are problems all over the world but the import taxes and the lack of bigger European companies even online  shopping is just so high. The people are great the best you will ever met. Also I agree with you Brazil could grow, but they have been saying this for 20 years Most students that I taught all want out of Brazil as life in Brazil is hard ,which is sad but true Good luck with with your plans I hope it works out

Dear Tierney 76: Could you please clarify what you mean by "import taxes"?

My wife and I are thinking about retiring in Brazil in a few years.

Thanks. Looking forward to your reply.

I am just meaning the cost you pay for everything from electric goods perfume white goods washing machine fridge freezer it is very expensive than.In Scotland were i am from,also I understand thato cars are very high price to run in Brazil.If  you have enough money to survive go for it as even though it has many problems.You will not met people as nice as you will like the Brazilians they always smiling and have a great way to get on with problems life's throws at them,but I just feel to have a better life I need to do that in Scotland.I hope and pray that One Brazil understand and helps it's people as they deserve so much better.I hope this helps a little bit for you and you have a great life in Brazil

Tierney76

Thanks very much for clarifying. Yes, I am aware of how expensive goods are to purchase in Brazil and import taxes are factored into it.  Even locally produced items are expensive. An example is automobiles. There are many automobile manufacturers in Brazil, and they are very expensive, maybe twice the cost of purchasing a car in the United States.

My wife has family there and I visited Brazil with her the first time in 2001. Since then, we have been back five times, so I'm aware of the issues,, not just the cost of things, but also the lack of service and professionalism when dealing with banks or departments of the government.

We have advantages, however, given so many relatives.

Regards.

I can only see the cost of things going higher and the service will.be less and I mean all of Brazil as the government and the money problems are just to bad.Only three years ago the Maracana stadium cost 600 dollers more back handers and now it is in trouble.It got broken into.this week.When this like that don't even have security.Sad but problems ahead.

And another really big problem for Brazilians is how their currency, the Real, has weakened over the past few years which also adds to the cost of buying imported goods.