Investment Property in Recife

Investment Real Estate in Recife

Recife property investment can be a worthwhile venture if you are selective with the areas you choose to invest in. If not, you could find that your investment suffers due to low rental yields, dwindling demand, and slow property price growth in many parts of Recife and LATAM .

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Searchable Map of Recife Investment Real Estate

Recife (Brazilian Portuguese: [ʁeˈsifi] (listen)) is the fifth-largest urban area in Brazil with 4,054,866 inhabitants, the second largest urban area of the North/Northeast Regions, and the capital and largest city of the state of Pernambuco in the northeast corner of South America. The population of the city proper was 1,653,461 in 2020. The first slave port in the Americas, Recife was founded in 1537, during the early Portuguese colonization of Brazil, as the main harbor of the Captaincy of Pernambuco, known for its large scale production of sugar cane. It was the former capital Mauritsstad of the 17th century colony of New Holland of Dutch Brazil, established by the Dutch West India Company. The city is located at the confluence of the Beberibe and Capibaribe rivers before they flow into the South Atlantic Ocean. It is a major port on the Atlantic. Its name is an allusion to the stone reefs that are present by the city’s shores. The many rivers, small islands and over 50 bridges found in Recife city centre characterise its geography and led to the city being called the “Brazilian Venice”. As of 2010, it is the capital city with the highest HDI in Northeast Brazil and second highest HDI in the entire North and Northeast Brazil (second only to Palmas).

The Metropolitan Region of Recife is the main industrial zone of the State of Pernambuco; major products are those derived from cane (sugar and ethanol), motor vehicles, ships, oil platforms, electronics, software, and others. With fiscal incentives by the government, many industrial companies were started in the 1970s and 1980s. Recife has a tradition of being the most important commercial hub of the North/Northeastern region of Brazil, with more than 52,500 business enterprises in Recife plus 32,500 in the Metro Area, totaling more than 85,000.

A combination of a large supply of labor and significant private investments turned Recife into Brazil’s second largest medical hub (the first being São Paulo); modern hospitals with state-of-the-art equipment receive patients from several neighbouring States.

Recife stands out as a major tourist attraction of the Northeast, both for its beaches and for its historic sites, dating back to both the Portuguese and the Dutch colonization of the region. The beach of Porto de Galinhas, 60 kilometers (37 mi) south of the city, has been repeatedly awarded the title of best beach in Brazil and has drawn many tourists. The Historic Centre of Olinda, 7 kilometers (4.3 mi) north of the city, was declared a UNESCO World Heritage site in 1982, and both cities’ Brazilian Carnival are among the world’s most famous.

The city is an education hub, and home to the Federal University of Pernambuco, the largest university in Pernambuco. Several Brazilian historical figures, such as the poet and abolitionist Castro Alves, moved to Recife for their studies. Recife and Natal are the only Brazilian cities with direct flights to the islands of Fernando de Noronha, a World Heritage Site.

The city was one of the host cities of the 2014 FIFA World Cup. Additionally, Recife hosted the 2013 FIFA Confederations Cup and the 1950 FIFA World Cup. The city, despite having a higher crime rate than the southern region of Brazil, is considered the safest state capital in northeastern region. It has a much lower crime rate than other regional capitals, such as Salvador or São Luís. Despite that, crime rose 440% in 2015.

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The increasing financial and political stability of Recife has translated into a real estate market that rewards forward planning and a willingness to look beyond areas of traditional affluence.

Buy to Rent in Recife

Renting out your Recife buy-to-rent out investment property can grow wealth and income.

Whatever your goals with investment property in Recife are – preparation is key.

Set goals based on how much rental yield will be required and the local rental yield rates in Recife and be prepared to change your initial outlook.
Thoroughly research the Recife location with a special emphasis on fringe areas outside the main Recife metropolis that may be valued lower than their better-known neighbors. Rental yields of around 5% are still attainable in certain areas of Recife.
Ensure that your target investment property in Recife appeals to professionals. This is a demographic that ensures maximum income and low voids.
Finding and vetting suitable tenants is a job ideally left to the professionals. Working with an established letting agent such as Physis Realty with local knowledge and experience of property legislation will give you the best chance of success.
You may think that managing your Recife properties yourself is an easy option, but are these savings justifiable when you run into Recife red tape? Physis Realty Recife office in downtown Recife provides you with peace-of-mind and leaves you time to plan your next move in the growing Recife buy-to-rent sector.

With our expert guidance, investing in Recifeprovides the secure knowledge that your money is working harder than it would in a local Recife bank and that future generations of your family will be left with substantial capital growth assets.

We are always happy to advise on buying investment property in Recife, where we have been established for over 35+ years. Physis Realty has been a firm fixture in the Recife property market through good times and bad. Our experts have seen it all and our portfolios continue to outperform.

Flipping Investment Property in Recife

Flipping property in Recife

Flipping property is when we advise clients to buy a Recife property below market value, renovate it and then make a profit by selling it at a higher price, all within a few months, and often before the Recife market has a time to react to the renovation.

The Flipping Strategy in Recife

Investment property flipping in Recife is a simple strategy. You find a property that is in need of renovation from our list and purchase it for a low price. These type of Recife real estate investments are sometimes referred to by professionals as ‘distressed’ Recife real estate.

What is distressed Recife property:

Recife property in need of renovation
Recife real estate with a change of purpose and use
Oversold Recife property
Bank repossessions in Recife

Put simply, long term investors in Recife purchase the property, renovate it and make it a lot more attractive to potential buyers.

Calculate profit that you make from Recife investment property flipping:

Final Selling Price less Cost of Purchase less Costs = Profit

Here is an example:

Recife property purchase price: $220,000

Renovation costs: $20,000

Other costs: $25,000

Property sale price: $400,000

Profit: $135,000

Experienced property developers in Recife use a minimum profit value of 22% when looking at potential Recife projects. The reason for this is because there are lots that can go wrong in Recife property flipping and working on a potential margin of 22% should still leave a good margin of error.

Luxury Property in Recife

For luxury property investors hoping to add a superb property in Recife to their luxury real estate investment portfolio, Physis Realty is a trusted partner.

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A world leader in luxury real estate with a portfolio comprising some of the most sought-after real estate in Recife, Physis Realty caters particularly to high net-worth individuals and families. A luxury real estate investment in Recife should be entrusted to only the highest-quality agency.

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