Cape Verde Rental Pros and Cons
Renting a property before taking the plunge
The great advantage of renting a flat or villa, is that it will be there. You can also check that it has mains electricity and see how often that fails. Failure rates have been rising as the state-owned Electra fails to cope with the growing demand posed by hotels and developments. You can also find out whether it has a mains water supply or relies just on occasional visits from the water tanker. These have also been becoming steadil less reliable as Electra`s investmrnty in desalinatiobn plants has not kept pace with demand from hotels.
Much of the property to let in Sal and Boa Visata belongs to Italians. Due to the massive over-building and the collapse of the property boom in Cape Verde, long-term rents are remarkably low. The choice of property runs from old and run-down flats right up to three and four bedroom villas on new estates. In Sal, most of the places to let are in Santa Maria, either along the coastal strip or just behind it. But there are also flats and villas to rent in the gated estates of Villa Verde and Murdeira. Many people prefer these because they believe that the security is better. They are also much more peaceful, lacking generally the barking of dogs and screaming of children, which can disrupt evenings and nights in the town favelas.
Most people renting are seeking their futures in commercial activities, such as shops, bars or restaurants. Lacking the capital to buy anything and unable to borrow, they take on a long-term let. But there are not nearly enough of them to take up all the supply. So rents have fallen steadily and many properties remain empty for years. Baileys, an english cafe at the Djadsal, always has lots of notices for cheap places to let.
The cheapest properties are either in Boa Vista, where the tourist economy has been blighted by the mass development of all-inclusive hotels or at the north-eastern corner of Santa Maria, where many of the Africans who came in to build the now suspended developments, have chosen to live. Flats are often bare of furniture and lack essential items like cork-screws and bottle-openers. But they provide shelter agains the howling wind, which is so noticeable on the windward edge of town.
Rents range from €200 per month for a bare flat on the edge of town to €500 per month for a two bedroom villa in Murdeira, in the front line. .In remote spots on some of the out-islands, or in the back streets of towns like Espargos or Palmeira rents will be even lower. But the crime levels may be much higher.
Usually the tenant will have to pay charges for electricity use and water , on top. And these can be high, where water is delivered by road tanker into a tank under the block of flats, as it is in the new areas of Santa Maria
.Since many of these flats were built for around €25,000 and the houses for €100,000 the original develpers are obtaining gross returns of between 6% and 10%. These rates have steadily eroded over time. Of course, they can earn this return only if - and thios is a big IF - they can find a long-term tenant. Many rental properties stand empty for months, as the local economy sickens.