“With a population now
exceeding 200 million, Brazil needs more houses! Lower-income families are
facing a housing deficit of 8 million homes, set to grow to over 12 million by
2023. We are helping to solve their problem.”
This
is how the investment prospect starts to describe the investment that I have
made recently. The investment is a “social housing investment”, which I have
made through Emerald Knight Consultants, an investment broker specializing in
Socially Responsible & Sustainable Investments (http://www.emeraldknightconsultants.com/). The issuing company
of the investment is EcoHouse Developments, an award winning property developer
of social housing programme in Brazil (http://www.ecohousedevelopments.com/). “EcoHouse was founded in June 2009 and are now a global organisation
with an annual turnover of 65M and offices in London, England - Natal, Brazil -
Toronto, Canada - Dubai, UAE and Singapore. We have an expanding workforce of
over 1040 full time employees across the globe which includes over 900 full
time buildcrew onsite in Natal, Brazil.”
So what is a social
housing?
EcoHouse
Developments describes the social housing investment as following:
‘Social housing’ is a
term used for homes provided by a government for families with modest incomes.
The economy of Brazil has now grown to become the 6th biggest in the
world (overtaking the UK at the end of 2011) and is continuing to rise. This
means that the demand for housing has of course increased. Property supply
simply can’t keep up with demand and added to this millions of families in
Brazil already live in sub standard housing. In 2009 the government decided to
act decisively to tackle this problem. So the Minha Casa, Minha Vida social housing
scheme was launched! The ‘MCMV’ scheme aims to build three million homes over a
five-year period. This big investment has a government budget of around R$100
billion (approx £40 billion/US$65 billion/€ 45 billion). The first phase of
Minha Casa, Minha Vida Brazil was launched in early 2009 and aimed initially to
build a million houses throughout Brazil. In June 2011 the government announced
the start of a second phase comprising a further two million properties.
How does the investment
work?
The
investment is quite simple. Private persons invest in off-plan property
developments in Brazil. Once the property is built and sold to an individual in
Brazil, the investor gets the invested money back. Plus a 20% interest rate -
in one year!
So why did I invest in
this?
There
are a number of attractive reasons why I did this investment. Some of them are
(not individually ranked):
·
High returns. The returns are set to 20% within 12 month.
Not bad!
·
Short-medium investment horizon. The 12 months investment
period is a good short investment period, so my money is not tied up too long. Also,
there is a chance to prolong the investment period with a similar investment with
the same company (a three year investment if I have understood it correctly)
·
Brazil is an excellent place to invest in and the
investment type is in high demand. Being one of the famous BRIC-countries, Brazil
is definitely a good place to invest in. It has rapid growing economy with high
GDP-growth and has a high housing deficit. The picture below illustrates this
very well:
Picture above comes
from the EcoHouse investment prospect
·
A proven investment. The developer is an award winning developer
with offices worldwide with proven track record and identical projects already
delivered on time. According to Emerald Knight, investors in EcoHouse’s previous
investments have received their money back earlier than the agreed 12 months!
·
A social responsible investment. Helping to solve the
housing deficit by building houses for people in need of properties with good
standard
·
A
relatively safe investment. The investment is backed up by the Brazilian
government and protected by a Lloyds TSB Escrow facility that offers 100%
security. The worst case scenario in the project is that all money is returned
to the investor if the project does not go ahead for whatever reason
I
will write more about this investment in later postings so you can see if this
investment turned out as planned! In one of my next postings I will write about
the results from an exciting
investment I have made – a carbon credit
investment. So stay tuned and subscribe
to my blog (at the top right on my blog) - don’t miss out on more
interesting stories!
(Flag-picture above from: bestflag.blogspot.se/2012/09/brazil-flag.html)