7 min read

A Future-Proof, Investable Country? Exploring Upside & Freedom Preservation in Brazil

Picture of Mikkel Thorup Mikkel Thorup : April 18, 2024

Hello again,

Welcome to another edition of my newsletter, Brazil Beachfront! To those of you who have been following along since the beginning, I thank you for your continued support and am thrilled to have you here.

For those of you who may just be discovering this newsletter for the first time, I will share a quick overview of what this twice-monthly newsletter is all about.

I created Brazil Beachfront to be a place for both savvy international investors and simply curious global citizens. I have set out to make Brazil Beachfront the go-to source for all things Brazil. Readers like yourself can now go beyond the stunning beaches and vibrant culture and explore the many reasons why I am targeting Brazil as a future-proof destination in 2024. I dive into the political, economic and societal factors that can make or prevent me from guiding my Private Clients towards a certain country for the purposes of wealth protection, freedom preservation, or, simply put, Plan B living.

With that, let’s get right into it!

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Brazil… Still Burdened By Misconception

Brazil is not just a tourist destination but also a major player in global commerce, boasting thriving industries in agriculture, manufacturing, technology, and finance. Its economy is one of the largest in the world in terms of GDP, making Brazil a key player on the international stage.

Reducing Brazil to clichés about beaches and festivals overlooks the depth and richness of its society and economy… as global citizens like us, we know that reducing a country to the “mainstream” view is foolish. There are plenty of viable Plan B destinations in this wonderful world, and in short, I view Brazil as one of these places.

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A Small Price to Pay to Hedge Your Personal Freedom & Financial Future

Brazil's inclusion in the BRICS group highlights its significant role in the global economy and underscores its uncapped economic potential. As one of the world's largest emerging markets, Brazil offers investors a diverse range of opportunities across various sectors, including agriculture, energy and even technology.

For those of you who are like me, we understand that many Western nations face an uncertain future… at best. I believe owning titled property in a BRICS country is a very smart decision, if even just for the sake of a hedge. I am by no means suggesting that you should shift all of your assets to Brazil and go 100% all in on the country, but I am saying that having a portion of your assets held in Brazil via real estate is a smart decision.

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Six Must Places To Visit in Brazil

At my company, Expat Money, my team is constantly creating the best content on the planet for global citizens like us. As many of you already know, we put out this content free of charge every single month. Just last year, my team hit a new record in terms of content creation. For example, last year, we created and shared 156 blog articles 52 podcasts and even hosted a virtual summit with nearly 10,000 attendees… all for free to our Expat Money newsletter subscribers. If you haven’t already, I would highly recommend signing up for that newsletter, too, as I am always sharing super valuable information & resources for global citizens and soon-to-be expats like us. Below is the type of content you can expect from us every single week once you JOIN THE EXPAT MONEY NEWSLETTER HERE

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My Favourite Economic Indicator; The Growing Middle Class

The expansion of the middle class represents a positive trend in Brazil's socio-economic development and contributes to the country's overall prosperity and stability, and will continue to do so over the coming years. Here are some of the most notable benefits a country experiences when the middle class grows:

Consumer Spending Power: The middle class typically has more disposable income than lower-income groups, which fuels consumer spending. Consumer spending often correlates with economic growth because it drives demand for goods and services, ultimately stimulating production and new investment.

Economic Stability: When more people have stable incomes and purchasing power, they are less likely to experience sudden financial crises or rely heavily on social safety nets. This stability can translate into more predictable economic performance.

Entrepreneurial Expansion: A growing middle class often fosters entrepreneurial activity. As people ascend into the middle class, they may have more resources to start businesses or invest in new ventures.

Social and Political Stability: A robust middle class can contribute to social and political stability. It often serves as a buffer against social unrest and can support democratic institutions by demanding accountability from the government and other institutions.

Human Capital Development: As families move into the middle class, they often invest more in education and skill development for themselves and their children. This contributes to a more skilled and adaptable workforce, which is crucial for economic competitiveness in a globalized economy.

Market Expansion: The middle class represents a significant market for goods and services, both domestically and internationally. Companies often target this demographic with their products, leading to increased competition, innovation, and market expansion.

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So.. Why Does A Growing Middle-Class Matter So Much To Us Foreign Investors?

Well, for those of us who have already made the savvy decision to purchase beachfront real estate in Brazil or are planning to do so soon, the growing middle class is so important to us because it means the potential client base of people that will have the financial means to travel to Brazil’s Northeast to vacation will grow immensely. An Increase in disposable income directly translates into an increase in travel. This is a fact. As the middle class continues to grow in Brazil, we can expect the demand for our vacation rentals to skyrocket. Plus, when more people are able to travel for the sake of pleasure, the cost for such a luxury increases too - this means not only will our occupancy rates go up, but the market price we are able to charge on a nightly, weekly or monthly basis for our vacation rentals will go up too.

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A Very Special Place In My Heart

When my wife and I lived in Brazil in 2021, we rented a car for several months and explored every nook and cranny of our city, visiting every beach, cafe, and restaurant we could find. Our brand new baby boy was bundled up in the back car seat sleeping, and we would play this song on repeat for him. Every time I hear this song, it transports me back to one of the most happy and content times of my life.

The Perfect Partner: Meet the Development Team Behind Brazil Beachfront:

Some of you may be wondering why I am able to offer my clients investment opportunities in Brazil. The simple answer is that I have partnered with a long-standing and reputable development company. My partners in Brazil Beachfront (Impar) have been at the forefront of Brazil's real estate development, delivering over 3,500 residential and commercial units over the last 24 years. Impar carries no debt - they are the real deal, and I have complete faith in their ability to develop residential communities that serve as both livable getaways and investment vehicles for foreign clientele.

As many of you know, I have had great experiences in Brazil, both personally and professionally. From travelling to Brazil for the birth of my second child to purchasing real estate for my own personal portfolio, Brazil has treated me well. After years of on-the-ground investigation, just last year, I decided to present my Private Clients with the opportunity to invest in a real estate development project that I had been aware of for quite some time.

In fact, for the past two years, they helped a few of my Private Clients at Expat Money secure homes in developments that were nearing completion and another site that was still in the planning phase.

I am excited to share with you that both projects are on schedule as planned. Congratulations to my clients who purchased a beachfront home at “The Point” development. I am sure you are already well aware that your new home is ready to be furnished and placed on the rental market (if you haven’t already done so)!

For my clients who purchased a home or lot at the Palm Bay site, I am excited to share that infrastructure advancements are happening daily. I have attached some photos below of the access roads being developed. These access roads are a major step forward as they have allowed electricity to be run through this area. You can rest easy; your project is in good hands and will be delivered on time.

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My Monthly Rental Report: March Income Update

In the previous edition of Brazil Beachfront, I shared with you my monthly rental income for February. After all expenses, I netted almost exactly $850 USD in February. As you will see in the chart below, my rental report from March was almost identical. With an occupancy rate of just under 50%, my rental property, which cost me $110,000 USD (furniture included), netted me a total of $852 USD in one month.

This is only the second month that my home has been on the rental market, and I am already earning great recurring profit without lifting a finger. As I mentioned in the last edition of Brazil Beachfront, I fully expect this property to create even more cash flow for me as the occupancy rate/nightly rental rate increases as the region continues to grow in demand.

Just hypothetically, I think we can agree that in a matter of months, my rental property will be generating $1200 USD (if not more) in monthly rental profit. Even if I never earn more than $1200 a month, I would be completely satisfied with my investment, as the payback period would look like this.

110000 / 1200 = 91.6 months OR 7.6 years. This would mean that in a 7-and-a-half-year period, this property will have completely paid for itself via monthly rental profit. At this point, I could either keep earning my completely hands-off monthly rental profit or sell my property and recoup the cash in a lump sum. 7 years from now, this property will be worth significantly more than I paid for it (capital appreciation). I won’t be surprised one bit if, 7 years from now, I will be able to sell this property for around $200,000 USD. By the time I sell this place (if I ever sell it), whatever I sell it for will be completely profit. I must say that it is not too shabby for an initial investment of $110,000.

Edition #3: Subscribers Only Real Estate Deal

Imagine building your dream home on this beachfront site. For $88,000 USD, you can build whatever you like on this 1363m2 site. Be it a vacation home, forever home, or even a small cash-flowing rental property, this site is ready for whatever you have in mind. Of course, purchasing a ready-made unit is surely more turnkey than building your own.

However, I know that someone reading this has the vision to bring whatever they imagine to life. I must mention that building in Brazil is far simpler (and far more affordable) than building in Canada, The United States or Europe. Material costs and labour costs are far cheaper, and permitting is far simpler. It’s not like you would need to be present in Brazil to bring your project to life, either. My partners at Impar would love to help you bring your dream project to life.. from A to Z, Impar will work alongside you to turn your dream into a reality. To learn more about this exclusive opportunity, I invite you to contact my partners directly by emailing “DEAL” to expat@beachfrontoffers.com