Why We Are Building Beside One of the World’s Most Visited Waterparks

Hey guys, Mikkel here,

Every once in a while, an investment thesis is so straightforward that trying to make it sound more sophisticated than it is doesn't help anyone. 

This is one of those times.

My partners on the ground in Brazil designed the Porto Suites in Porto das Dunas, next to one of the world's largest water parks, Beach Park. 

Beach Park attracts approximately 1.7 million visitors every year.

Those people need somewhere to sleep.

That's the thesis.

The individual properties are relatively compact, hotel-style suites designed primarily for short-term visitors.

There is a staffed front desk and on-site workers to maintain the grounds and common areas.

My partners provide professional management so your property can be listed across the major short-term rental platforms, guests can come and go without you having to lift a finger, and day-to-day operations are fully handled on your behalf.

This is not a pooled hotel investment.

You aren't buying some fractional interest in a hotel and receiving a percentage of the collective profits generated by every room in the building.

You own your individual, fully titled real estate, and each unit inside the building is managed individually. 

The revenue generated by your property belongs to you (less the management fee if you choose to use the turnkey rental management system).

You own the asset.

Your asset generates revenue.

Someone else can handle the work.

It’s as straightforward as it gets.

The typical Porto Suites property has a deliberately small footprint.

If you're developing short-term accommodation beside a tourism attraction as reliable as the Beach Park, you don't necessarily need sprawling spaces.

Visitors need somewhere comfortable to sleep after spending most of the day at the waterpark.  Compact hotel-style accommodations serve that market extremely well.

BUT…

A compact room is not suitable for all types of visitors.

Families or larger groups may need more space.

Sure, they could book separate rooms and stay down the hall from each other, but for some, that is not a suitable alternative. 

So, our Brazilian partners have agreed to do something special for our community.

Instead of purchasing one standard Porto Suites unit, you can acquire two adjoining units (at a members-only price) and have them combined into one oversized property at no extra cost.

Normally, this comes with an additional cost of $5,000.

My partners have waived that fee for us.  

We're taking a product designed predominantly around smaller hotel-style suites and creating something differentiated inside it.

We're still beside the same enormous tourism attraction, still accessing the same flow of visitors and still able to benefit from the same front desk and rental-management infrastructure.

But instead of competing exclusively for the traveller looking for a compact hotel-style unit, we have a property that can appeal to families, larger groups, longer-stay visitors, and people who simply value a bigger room. 

Now… For The Numbers

The special purchase price for the combined Porto Suites oversized unit is $183,000 USD.

Closing costs are approximately $10,000 USD, bringing your total acquisition cost to $193,000 USD.

For our financial modelling, we're working with two primary assumptions:

An average nightly rate of approximately $162 USD.

An annualized occupancy rate of approximately 70%.

Here's what that looks like:

• 365 nights × 70% occupancy =  256 occupied nights
  

• 256 nights × $162 = approximately $41,400 in gross annual rental revenue
  

• 20% turnkey management fee = approximately $8,280
  

• $33,100 remaining after management fee
  

• HOA, insurance and property taxes = approximately $3,500 annually
  

• Projected net annual income = $29,600 USD

That's approximately $29,600 in projected annual hands-off rental income from a property costing $193,000 USD all in. 

When you calculate the return against your full $193,000 acquisition cost, including the $10,000 in closing costs and other annual fees, you're looking at a 15.3% annual return.

$193,000 total acquisition cost → $29,600 in projected annual net income → 15.3% projected net yield.

That 15.3% net yield is all in.

At approximately $29,600 in projected annual net income, your payback period on the entire $193,000 acquisition cost would be about 6.5 years.

Assuming the base-case economics held, around the middle of year 7 you would have cumulatively received net rental income equal to what you originally paid to acquire the property. 

$29,600 × 6.5 years = approximately $192,400.

From that point forward, assuming the projected economics hold, additional net rental income would represent a return beyond the original acquisition cost. 

If the property continued producing approximately $29,600 in annual net income for ten years, cumulative projected net rental income would be approximately $296,000.

Over 15 years, it would be approximately $444,000.

…all the while, you continue owning the underlying real estate, which we believe is positioned to appreciate over the coming years. 

But What If Occupancy Is Lower?

This is something I always like doing when evaluating an income-producing property.

Our model assumes 70% annual occupancy.

Fine.

Let's knock it down to a flat-out unlikely scenario: 50% occupancy.

At only 50% occupancy, gross rental revenue is still approximately $29,600.

After management fees and annual expenses of $3,500, you're left with approximately $20,200.

That's still approximately a 10.4% projected annual net yield against your total acquisition cost of $193,000 USD. 

We don't need 90% occupancy for this investment to generate a solid return. 

We don't need some ridiculous nightly rate.

Even if our  70% annual occupancy assumption proves too optimistic, the model still shows the potential for a projected net yield above 10%. 

Remember, we are not building a short-term rental property in the middle of nowhere and hoping tourists eventually discover the area.

The attraction is already there.

The visitors are already coming.

Our job is to provide a product that can capture a tiny fraction of that existing demand.

I own several rental properties in Brazil’s Northeast, and not a single one of them creates another job for me. 

I don't want to answer messages from guests. I don't want to coordinate check-ins. I don't want to spend my Tuesday afternoon figuring out why someone can't get into their room.

That's why the rental management option is important to me, and likely why most of you reading this will opt to work with my partners to handle this aspect of things. 

You get to own the underlying Brazilian real estate while someone else handles the operational aspects required to turn it into an income-producing asset.

More complicated investment theses exist, but that doesn't automatically make them better. 

If the numbers behind this opportunity make sense to you, the next step is very straightforward.

Go to BrazilBeachfront.com/Contact and book a call with Melissa.

The purpose of the call is to understand what you're looking for, answer your questions about the opportunity and determine whether owning a differentiated, oversized unit inside the Porto Suites makes logical sense for your international portfolio and financial goals.

Melissa will walk you through everything you need to know: the project itself, the purchase process and the payment mechanics.

She can explain how the front desk and management operations work, how your property gets placed in the short-term rental market, and how the 20% turnkey management fee is structured.

And, of course, she can walk through the financial assumptions I've laid out above so you understand exactly where the projected returns come from and what variables could make actual results higher or lower.

You're acquiring individually owned Brazilian real estate inside a project built specifically to serve an existing tourism market, with professional infrastructure available to turn that property into what is intended to be a genuinely hands-off short-term rental investment.

Go to BrazilBeachfront.com/Contact and schedule a call with Melissa to review what we’re building, walk through the numbers, ask your questions, and decide whether Brazilian real estate belongs in your international investment portfolio

Speak soon,
Mikkel