Timescale

Average construction time on São Vicente projects is 24 months, while for best returns, clients looking for a short term investment should look at an average investment term of between 12-18 months from reservation to resale.

Payment terms on São Vicente property projects require the full purchase price to be paid during the course of construction. Contracts are assignable at any stage.

Level of Complexity

Short term strategies are highly attractive in São Vicente today. They are a tax efficient way of investing, as purchase tax is payable only upon completion of the property sale, by which time the buy-to-flip client should have successfully made a sharp exit from the investment. The 'flip' may take place at any stage after signing the purchase contract and paying the first deposit.

Risk Assessment

As with any short term investment in an emerging market, investors must ask themselves how a buyer will be attracted specifically to their particular property. They will need to ask: what is the competition? Is there an oversupply of existing properties and construction in this location? Is their unit type and situation one of the best.

Selected unit(s) need to be in a prime location to attract buyers fast, i.e. a corner unit on frontline beach or golf, or even a penthouse with outstanding views. Remember, the more outstanding the unit, the lower the buy-to-flip risk.

Investors should also bear in mind when considering a short term strategy, that Cape Verde is still an investors' market. Completion of new airports, roads, hotels and tourist facilities will begin in around 18 months to 2 years time. The enormous volume of ongoing construction in Cape Verde is unavoidable for the next few years. End user buyers will be buying throughout this initial development phase and will be looking for the best completed properties on the market. So will your unit stand out from the rest?

A final word of warning: if a buyer is not found prior to completion of the property, the investor needs to be confident they can continue to completion and adapt their strategy comfortably.

What does this mean?