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The Opportunity
The Dunes Golf and Spa Resort is situated conveniently between two of Tunisias busiest airports offering direct and inexpensive flights to major European cities.
The resort is a gated 5 star resort offering 24 hr security and concierge facilities as well as on site amenities including a restaurant, snack bar, supermarket, bank, bakery and a rental management company.
The development itself comprises of studios, one bed and two bed apartments in a lowrise setting in a prime residential area close to all facilities including a 36 hole golf course, marina and restaurants. The Dunes Golf and Spa resort is directly located next to glorious white sandy beaches.
Rental income is very high in this region due to the strength of the local, neighbouring and European markets ensuring yields are between 10% and 14% per year.
Rental Figures
Example based on a 1-bed apartment rented for 13 weeks per year at € 45,000 | 6 weeks rental in the peak season at | € 575 | | 4 weeks rental in the medium season at | € 460 | | 3 weeks rental in the low season at | € 350 | | Total annual rental return | € 6,340 | | | | | Gross Yield (€6,340 / €45,000) | 14.08% | | Net Yield (less 10% management charge) | 12.68% | | | | | Full repayment of property (100/12.68) | 7.89 years | The above figures show us that even using a conservative rental window of only 13 weeks per year you are able to pay off for the property in less than 8 years using rental income alone.
Capital Growth
| Purchase price | € 45,000 | | Initial investment of 50% | € 22,500 | | Value of apartment on completion in 2 years | € 70,312 | Profit (during construction alone)
| € 25,312 |
Payment Structure
| € 3000 reservation deposit | | 50% of balance on contract | | 10% of balance 6 months later | | Remaining balance on completion or before June 2011 |
Return on Investment
Since only €22,500 was invested, the ROI in only 2 years is = 112%
Exit Strategy
Foreign purchase of property in Tunisia has only just become possible over the last 3 years. This is due to the fact the Tunisian government wanted to ensure their own population could afford to buy within their own country and not to be out priced, as has happened in other countries. Now around 80% of the locals own their homes. Foreigners need to require approval to be entitled to buy however for most Europeans this is only a formality.
This controls and protects the market and also means the investor will have a strong local market to sell to when they wish to sell their properties, realise their investment and have a clear exit strategy.
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