- 16/06/19

How does the Viceroy Residences scheme work?

A premier destination, a guaranteed rental return, the reassurance of expert property management…the advantages of owning branded residences are limitless. The following guide will help explain why a Viceroy Residence just might be the perfect investment opportunity for you.

 

What are the ‘Viceroy Residences at Ombria Resort’?

Viceroy Residences at Ombria Resort is a branded touristic development which includes 65 properties, with the buyer acquires the title to the property plus a co-ownership of those areas of the development defined as "Communal Areas".

By investing in this type of touristic unit, buyers can enjoy a range of hotel-related facilities and services and benefit from an income related to the tourist rental of their property.

Ranging in size from 70 to 173 m2 of internal area, each of the units has a fully-fitted kitchen or kitchenette, living room, bedroom(s), bathroom(s) and terraces. Some of the units have their own swimming pool or jacuzzi.

 

Who is the operator of the Viceroy Residences at Ombria Resort?

The Operator is Viceroy Hotels & Resorts, appointed by the Management Company (Quinta da Ombria Hotel SA) through a hotel management agreement. Viceroy has full operational responsibilities of the Viceroy Residences. They are an experienced international hotel and residences operator currently managing a dozen luxury hotels worldwide (in the USA, Mexico, Caribbean and Middle East) with future openings in Europe, Africa and Middle East.

 

What exactly am I buying at the Viceroy Residences?

The owner buys a specific property unit, together with all furniture, fixtures, fittings and equipment.  The owner assigns the exclusive operation of the property to Viceroy Hotels and Resorts who will manage their property and provide a rental income to the owner.

 

How much rental income will my touristic unit generate for me?

During the first 5 years of operations after purchase of the property, the owner receives a minimum guaranteed 5% rental return on investment per annum (calculated on the price of the property). If the net rental income generated is lower than the 5 % return on investment, the owner still receives 5%. However, the owner will receive the actual net rental income should it be higher than 5%.

From year 6 onwards, the owner receives their share of the net rental income divided from the total pooled rental income.

 

How is the Viceroy Residences rental income calculated and distributed?

The total income generated by all properties is pooled in the Rental Pool Scheme account and all operating expenses and costs to the management company, communal area charges and reserve fund payments are deducted. The resulting the net income is then divided among the owners every six months.

 

What expenses will I incur?

Owners are charged a service fee to the management company that covers communal areas’ charges and all operating expenses, including administration services, maintenance services, cleaning and housekeeping services, property insurances and utility expenses.

Also included is a 22% Touristic Exploration Fee, calculated on the gross rental income, to cover the management of the Rental Pool by the management company. An amount of 4% of the total service fee is legally required for the Reserve Fund account.

These are all deducted from the pooled rental income, so owners do not have to worry about having to pay them. Once all the expenses have been deducted the resulting net income is distributed automatically to the owners.

Finally, the owners also pay a resort fee, for the services and management of the resort’s non-private areas and infrastructures enjoyed by all the property owners. We anticipate the first-year fee to be between €250 to €1,300 per year.

 

Are the Viceroy Residences furnished?

Yes. It is mandatory by law that these types of properties are furnished, in order that all maintain the same standard and quality of furniture. Viceroy Residences at Ombria Resort are fully furnished and equipped to a five-star standard that complies with Viceroy’s brand and design standards. The FF&E and OS&E pack is a pre-established furniture and equipment set that is not included in the purchase price of the unit.

 

Who takes care of the ongoing repairs and maintenance?

The management company will be responsible for all repairs and maintenance of the property including the properties fixtures and furniture. These costs are considered an operating expense covered by the service fee.

 

Who owns the furniture?

All furniture belongs to the owner, however, the owner gives their exclusive right and control to the management company in the management agreement, to maintain the high standards of the resort.

 

Can I leave any personal items in my unit?

No. Contrary to purely residential properties, these types of property are managed investment properties or holiday homes and owners may not leave any personal effects in their unit.

 

When can I use my unit in the Viceroy Residences?

Owners can use their properties subject to the owner usage calendar and seasonal restrictions. In each year, owners can use their units for a maximum of 10 weeks, divided as follows: 2 weeks in high season, 3 weeks in the medium season and 5 weeks in the low season. This ensures that the owners rental income to owners is maximized, since the highest daily rental and occupancy rates are achieved during high season.

 

Can I let others use my property during my owner usage period?

Yes, immediate family members, business associates and friends can be nominated by the owner to enjoy all, or part, of your usage entitlements.

 

Can I promote and/or sub-let my property to someone else during my selected owner’s use periods?

No. This is strictly forbidden. According to Portuguese legal requirements, only the management company may promote and rent the properties.

 

Can I use the hotel’s facilities during my owner usage periods?

Owners have full use of resort facilities, discounts on food & beverage as well as reduced golf rates and other benefits.

 

Are there any restrictions on resale?

Owners are obliged to notify the management company of their intention to sell prior to placing the unit on sale. The owner or the Owner’s appointed agents may not advertise or place any notice on the property or resort to advertise its sale. Any resale is subject to the purchaser signing to the same residences agreement as the seller.

 

Will my property increase in value?

Portugal has enjoyed a very stable and continuous growth in property investment in recent years, with increased demand and price growth in most regions, namely in the Algarve. An affordable, easily accessible, secure destination in a wonderful climate with the attractive Non-Habitual Residents and Golden Visa schemes, the Algarve has seen an increased demand for luxury properties.


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