Since the UK property boom gave so many people the capital they needed to buy abroad Brits may have started to notice that the traditional second home locations in European coastal resorts have got just a little overcrowded. In steps Brazil with a new and improved image that is managing to dispel the often negative attitude towards investing in South America held by Europeans in the past. The country's economy is on the up, the government is stable and sensible regulations make investment much safer than in the past. In fact, Brazil is said to have one of the fastest growing economies in the world.

The country covers nearly half of all South America stretching across four time zones – each with a different climate. However, the majority of the population live in areas that have either been cooled by altitude, sea winds or polar fronts. For this reason the main property areas experience sunshine for most of the year without the heat ever becoming too unbearable.

Where to buy
Rio de Janeiro is renowned for its world-famous carnival and multi-ethnic mix of friendly, fun-loving people. Both these factors have helped the country become a property investor's dream as more and more overseas buyers become interested in the market. The city has become attractive to British retirees who have a little more time on their hands and don't mind the 12 hours travel time needed to get there.

Ipanema and Leblon are the most exclusive resorts but even here beach properties are available for relatively low prices: £150,000 buys a spacious two- or three-bedroom apartment in a concierge building on the beach. Prices can rise into the millions if you want something a little more spectacular.

Up-and-coming spots are mainly located on the beachfront and include resorts such as Angra dos Reis, Buzios and Ilha Grande. Beachfront properties in these areas can be found for as little as £40,000. True bargain hunters should consider compromising a little on the location. Thanks to the importance attached to owning a beachfront property, those willing to sacrifice a sandy front garden for a property located a few hundred metres inland are likely to pay next-to-nothing.

Outside Rio, the Brazilian government has been pumping extra money into developing the state of Bahia. The best-known spot in Bahia is the state capital Salvador. Within the city a fully furnished apartment goes for around £30,000 but if you go looking for property in the surrounding suburbs you are likely to get more for your money.

However, it is the smaller coastal areas of Bahia that are most attractive to overseas buyers and unsurprisingly beachfront properties command the most interest. Praia do Forte, Porto Seguro and Itacimirim are all spots that are growing and have recently become  popular with overseas buyers. All three locations are fast becoming popular tourist destinations but you will find that prices range drastically depending on the size and location of the property. Those with a bit of patience will find that bargains can be found with a bit of close inspection.

The State of Ceara also has a growing property market. The city of Fortaleza has some of Brazil's best nightlife and is growing in size and popularity at an astonishing rate. Just outside Fortaleza places like the small fishing village of Cumbuco offer a slice of traditional Brazilian life in a quiet, tranquil and absolutely stunning setting. The village is soon to be the sight of the coast's first golf course and a number of developments specifically designed for the holiday home buyer. New-build properties are already turning up in the area with two-bedroom apartments selling off plan for under £70,000.
 
Investors are likely to find promises of 6 per cent rental returns a big draw in this state. As usual, waterfront properties command the highest prices and are likely to be the first to feel the benefit of rises. The whole state is under development with significant investment in infrastructure helping to support the growing property market. The state is said to have the cleanest air and the purest water on the continent and the  city of Natal is said to have the lowest crime rates as well as the highest quality of life in all the country. Prices range depending on proximity to water but a beachfront apartment is likely to cost around £30,000 on a new-build development project.

Investment potential
A definite opportunity exists for substantial profit but it is offset by some medium to long term economic risk posed by the stability of Brazilian currency. Already popular tourist hotspots are the safest bet.

How to buy
1. The first thing to do once you have decided to buy in Brazil is obtain a CPF number. This is a personal identification number needed to set up a bank account. There is a fee for this but most developers will be able to provide you with the form you need to fill out and then process it for you.

2. As with most foreign purchases where you are unfamiliar with the laws of the country it is highly advisable that you appoint an agent who understands the process in Brazil. One bonus is that all contracts are written in both Portuguese and English and are a written and binding guarantee of full title.

3. Be aware that all properties that have been built since 1974 have a document called a Matricula. These contain a description of the property and list all previous owners and any outstanding mortgages. Be sure to ask the seller to provide this to you in order to ensure that he/she has the right to sell you the property.

4. The Conselho Regional de Corretores Imobiliários (CRECI) is the professional organisation that regulates Property Managers and Real Estate brokers. Under Brazilian law only registered members are allowed to work as Corretores (Property Managers). Although CRECI membership is no guarantee against dishonest actions by individuals or companies, it does at least provide more leverage if you ever need to lodge an official complaint.

5. In order to claim full possession of a property you must register your ownership at  Registro Imobiliário. There will be a regional office where this can be done known as Cartório do Registro de Imóveis, but it can also be done at any location by a registered official.

Brazil factfile:
Timezone: GMT-3 – -5
Exchange rate: GBP1= Real$4.02 (July06)
Mortgage availability: Limited
Deposit required: 5–20%
Agent's fees: 4–10% legal fees: £200–500
Capital gains tax: 15–27% income related
Peak letting season: December to March
Average daily temps celcius (Jan–Dec):
26, 26, 25, 24, 22, 21, 21, 22, 22, 23, 24, 25 (rio)
Average property prices: 2-bed apart: £59,576; 3-bed house: £61,483; 4-bed house: £106,750

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Article published in August 2006