The Brazil Property Secret Investors Should Be Aware Of

Brazil property secretsI remember the days when it was good to be a property pioneer. We had little competition finding property that paid for itself back in those days. However like all good investments, people leap in on the gold rush and make it that bit harder to find the gold nuggets.

This was the case in Eastern Europe a few years back and even Spanish property if we travel back a little further in time. Fortunately there is still a market where few people realise the opportunities – that market is Brazil right now.

Those who have invested rental properties in cities like Natal, Sao Paolo and Rio are, even as I am writing this, cashing in by doubling the rent when tenants come to renew their contracts.

This is common knowledge now in Brazil. Real estate portal Zap Imoveis has already highlighted the practices of a new breed of property pioneers in Brazil’s cities this year.

“They spend their days literally hunting. They knock on many doors, make friends with janitors and doormen, talk with officials from the bakery next to the building. As detectives in the property market, the “house hunters” sniff properties available for rent. This new professional sport is starting to gain pace as is managing real estate properties in Rio and Sao Paulo.”

It is still early days for  overseas Brazil property investors and as my uncle Wilfred used to say

“When there’s a gold rush everybody rushes in to get their hands on some until the gold runs out and it gets a lot more difficult to find it”

We are not at that stage in Brazil yet, which means the opportunities to take advantage of this exciting market are real.

If we look at supply and demand in Brazil’s cities, the volume of rental properties is still very low and vacancy rates are also very low at 10%.

This gives us a unique opportunity to invest in Brazil property and see rental yields of 8 to 11% per annum and an increase in the price of property of between 15 and 25% per annum – a win win combination for property investors.

In Brazil’s major cities, young professionals are struggling to afford the kind of prices now being asked for properties in good areas and even with mortgage interest rates falling into single figures, affordability is unlikely to improve.

A 50sqm apartment for example will generate yields of 9.6% whereas larger units would be 5.4% to 7.2%.

Apartments in the suburbs of Sao Paulo offer yields of up to 8% and in more central areas close to transport links, yields can be as high as 11% making Brazil one of the world’s most attractive destinations for buy-to-let investors right now.

Are you thinking of becoming or indeed are you a pioneer investor in Brazil property? Please leave your answers below:

Kind regards

Brett Tudor

Property Expert

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