Do the properties that qualify for residency and Citizenship programs actually stack up?

Jul 20, 2021

CBI or Citizenship By Investments are increasingly popular,  only made more so by the events that took place in SA last week.

Golden Visa, EB5, EB2, Malta, Greece, and Montenegro are all being advertised as a way out, offering visa free travel and Plan Bs, as long as you invest in a property there. 

The amount of investment varies across the programs. 

What are the investment requirements in order to qualify under the real estate categories? 

  • Portugal €280/350/500
  • Spain €500
  • Malta €350
  • Grenada $220
  • Montenegro €250/450
  • Greece €250
  • Ireland €1000,000

Even at the lowest entry requirement, you’re still in for a few million Rands.   Having come across countless options for each program, Hurst & Wills rarely promote the offerings, because in our opinion, most of the property investments do not stack up.

No self-respecting  property investor in their right mind would sign on the dotted line for most of the deals offered in the glossy brochures, never mind tie themselves in for the foreseeable future, and certainly not refinance their homes or use their pension savings to do so.

Unfortunately, most of those in pursuit of a second passport are not savvy property investors, and sadly, there are too many agents out there who will take high commissions and paybacks for selling bad investments  to unsuspecting SA clients, innocently looking to procure a safe plan B for their families.

Hotels that will likely never see the light of day, old refurbishment properties being sold for double that they are worth and new developments in low-growth areas are being reserved every day.

Are there any property investments that qualify for passports, and actually stack up?

PORTUGAL is our most popular destination for investment and Residency.  The investment fundamentals of the country stack up and it’s property market has been on an upward trajectory for some time, not only because of the GV program, but also the tax regimes that attract businesses and wealthy individuals alike. 

The reality is that if you’re looking at Golden Visa investments in Portugal, your days are numbered.  Most of the good investments will no longer qualify for Golden Visa beyond 2021. Lisbon, Porto and the Algarve have historically been the best performers over recent years seeing growth of 15% a year.  In these areas you need to spend at least €500,000 to qualify, and these days there is very little at this price point.

In fact, much of what is left  has been “Golden- Visa-priced” to attract GV investors, meaning the properties that are actually worth €420,000 are being sold at €500,000.  In the other Golden Visa categories, of refurbishment and low density, priced at €350,000 and €280,000 respectively, there is very little.  When something is available it is gone very quickly.  Most of what we sell in this category doesn’t even have a brochure, and we are honest with our clients that they must move quickly.  

MONTENEGRO and THE CARIBBEAN are mostly hotel investments, which one must be wary of;  they’re packaged up very nicely offering turn-key solutions, guaranteed yields and the lure of stunning imagery, with very little substance.  So do your homework on these ones, and especially the projects being sold with promises of being built soon, with little track record.

SPAIN, ITALY & GREECE have stunning properties, as long as you want to actually go and live there.  Most of them will not be rentable, and when they are, the yield will likely be low. Though charming and seemingly affordable, these programs do not suit everyone, and the reality of having a property to maintain overseas is not straight-forward, especially if empty most of the year. 

5 Questions you should ask when considering a Property Investment for citizenship. 

  • Am I looking for a visa or an investment? 
  • Do i need to recoup the full amount invested back when I have achieved the residency/citizenship
  • Am I expecting a return, whether monthly or on disposal?
  • Am I hoping to sell this investment when it’s no longer of use to me?
  • How much money is the person selling me this going to be paid

Hurst & Wills are property advisors, first and foremost who specialise in property investing.  We are independent and so have access to the widest portfolio available. We analyse the numbers and your personal objectives to determine if a property is a good investment, regardless. Our job is to find you an investment property that qualifies you for your visa residency application, making sure that your investment stacks up today and in the future.