1 Bed Hotel for sale in Porlamar, Margarita Island, Venezuela

Frontline Beach Resort Outside Hurricane Belt
10 Year 7% Nett Guaranteed Income Excellent On-Site Facilities
No Annual Maintenance Fees Extremely Low Purchase Costs
Fully Furnished & Air Conditioned No Purchase VAT
Duty & VAT Free Island 1 Beds From €79,000 (Sea View)
2 Beds From €103,000 (Non Sea View) 2 Beds From €112,000 (Sea View)

The Caracola Beach & Spa Resort is a frontline beach development located between the north side of the busy city of Porlamar, the largest city on the island, and south side of the historical town of Pampatar.

The 1244 unit Apart-Hotel complex is situated directly on the beach front and almost every unit has a spectacular view of the Caribbean Sea. The resort is placed beside the Hilton Hotel in a very well communicated location.

Caracola Beach & Spa Resort will be a fully managed resort with all of the services that you would expect from any top end hotel, 24 hour reception, 24 hour security, house keeping services, concierge and more.

The development will be managed by a top American resort management company, Geneva Hospitality, who have many years experience in their field and manage some of the best resorts in Lake Geneva, Florida and Chicago. They have also been recently voted by Expedia.com as the Number One hotel chain in Florida.

There will be a rental guarantee scheme in place for a period of 10 years, renewable for a further 10 years and all income will be guaranteed by a Fidelity Bond for client's piece of mind.

The Deal

10 Year Rental Guarantee - 7% Net

The rental guarantee is being offered by Geneva Hospitality Group, a premium hotel management company with an established presence in the US. The return will be paid in arrears every 6 months and is 100% guaranteed at a minimum of 7% net for the 10 year term.

Rental Income - Guaranteed by a Fidelity Bond, Issued by Chubb Insurance

The Fidelity Bond will be obtained by Geneva Hospitality from Chubb Insurance, one of the largest insurance companies in the world, six months prior to the opening day of the resort, the amount of US$10 million per annum will be in effect for a period of 10 years. The Bond will be paid to the owners of the apartments within the Caracola Beach & Spa Resort if Geneva Hospitality fails to fulfil its obligation to paying the rental income to each individual owner who has placed his/her unit into the Rental Program under the management of Geneva Hospitality. The Bond will name all individual owners as beneficiaries. The Bond will go into effect if Geneva is not willing to pay such rental to the unit owner, the filing of bankruptcy by Geneva Hospitality, or if Geneva Hospitality decides not to pay the owners and leave with the funds entrusted to Geneva Hospitality.

Tax Efficient Purchase Method

Buying a property in Isla Margarita usually means obstructive legalisation that insists on revenue derived from personal property within the state to be paid in local currency, Bolivars. It also insists on personal property transactions to be carried out in Bolivars. This has currency fluctuation and transfer cost implications. To avoid this, our international legal specialists, Powerscourt Services Ltd., have come up with an innovative tax efficient method of purchasing through an American off-shore limited liability company structure to avoid purchase, income and sale related costs. More importantly, selling the Company, rather than selling the Property itself, avoids dealing with the Venezuelan currency, since the sale occurs in a hard currency such as Euros, US Dollars or GB Pounds. Since there is no change of ownership of the legal title to the Property (the same Company continues to own it), there is no liability for Venezuelan sales and capital taxes.

A more thorough explanation of this purchase method is in link ‘Purchase Process’.

Optional 28 Days Personal Usage Per Annum

As part of the purchase, you have a personal allowance of 28 days usage per year. This can be used by you, your friends or family. The only stipulation is that your usage is outside of peak holiday periods, i.e. Easter, July and August, first 2 weeks of September and from the 24th to 31st December.

No Maintenance Fees, No Management Fees, No Service Charges

This is a completely hands off investment! Once the hotel management company leases your apartment, they will not require any involvement or money from you during the term of the lease. Your income is completely net.

Rental Reviews - Every 5 Years

Although the initial rental guarantee is for 10 years, if the hotel achieves occupancy levels of 75% or more on average by year 5, the rental guarantee will be increased to 8.25% for the following 5 years. If the occupancy is less than 75% the rental guarantee will still remain fixed at 7% for the remaining 5 years.

Ten Year Rental Contract Renewable for Further 10 Years

IT does not stop there! Once the first 10 year rental guarantee has expired you will have the option of renewing your contract with the same hotel operator for a further 10 years. The rental income will be reviewed at that time and the rate will be set to reflect the market of that time, therefore, it will not be based on a 10 year old purchase price.

Low Entry Level Launch Prices

Prices start from just €79,000.

Fractional Ownership

Investing in property through fractional purchase has become increasingly popular in recent years. It was pioneered in the USA, but has become common also for UK and European investors. The advantage is that it enables Investors to invest a much smaller amount in a particular property, which in turn makes it easier for them to have a balanced portfolio of different types of investment.

Present Financial Climate

In the present financial and economic climate fractional ownership becomes escpecially attractive. People need to put their money somewhere; and every typeof asset has risks that are difficult to assess. Even cash is risky, with highly volatile exchange rates, and with continuing uncertainties surrounding banks and inflation. So spreading money between different asset classes is the wisest policy. Investing relatively small amounts in particular properties in different locations is an excellent way of enacting this policy.

Investing in Margarita

Global tourism will undoubtedly decline while the recession lasts. So people will be looking for economical destinations that provide a degree of luxury. Margarita is close to North America, so access is relatively cheap. And prices are very low compared with other Caribbean Islands. Thus, it is an excellent destination to invest in tourism.

Caracola As An Investment

The price of property at Caracola is far lower than comparable islands in the Caribbean. This is because labour remains very cheap, so the cost of building is very low. However, the Margarita Authorities are placing strict controls on development, so land is becoming increasingly scarce. Another factor is that Margarita is a VAT and Duty Free island, thus lower costs even further. So as Margarita grows as a destination, prices of property will rise steeply.

Owning Fractions

Each fraction represents 25% ownership of a property at Caracola. Thus you will hold 25% of the shares of the offshore limitied liability company that owns the property.

Price

The payment for a 25% fraction is 25% of the list price of a property purchased as a whole. So there is no premium for buying a fraction.