Rio de Janeiro Real Estate

[sanddunes]

I was bored today and looking at real estate in Rio.

Overall Rio is expensive, but cheap compared to NYC or San Fran.  An average 2 bedroom in Ipanema goes for around 1-1.5 million reals (beachfront and luxury buildings go for much more).

Has anyone here bought property in Brazil?  The dollar is pretty strong now..

I came across one dream property - I'm sure it costs millions, but it is amazing!  I can only imagine how much fun it would be to invite a bunch of garotos to come hang out with you in the pool there

[Tartegogo]

1 hour ago, sanddunes said:

invite a bunch of garotos to come hang out with you in the pool there

They would never leave, as long as you feed them, they wouldn’t even ask for money! 

[mvan1]

4 hours ago, sanddunes said:

 

Has anyone here bought property in Brazil?  The dollar is pretty strong now..

 

Americans buying Real Estate in Brazil - don't do it!

I started visiting Brazil about fifteen years ago.  Like most Americans, I was taken in by the lifestyle and the fascinating garotos.  So much that I visited Brazil every other month for the first few years I began visiting Brazil.  Sometimes I visited more often.

One day I decided to take the advice of several Americans who had purchased condos in Brazil.  

I looked for and finally found a condo I liked and I bought it.  

After making an offer, I had to apply for and get a CPF number to furnish to the real estate company and to whomever needed the number to record me as the new owner.  

Buying real property in Brazil was probably the dumbest thing I ever did.  

After being ripped off by three different supposed “contractors” to remodel the condo (which they only did partially and badly), I was finally able to move in.  I bought furniture and settled into a fairly nice condo.  However, I had to return to the U.S. every month or so because of other commitments I had.  

The first time I returned to the Brazilian condo after being gone about one month, the refrigerator, the stove, the television and other furniture had been stolen from my condo.  This was despite there being a 24-hour guard on the front door of the building.  

After replacing the stolen items, I moved back to the condo.  After a few weeks, I again returned to the U.S. and I returned only to find more furniture stolen from the condo.  I replaced the stolen items only to have them stolen yet a third time.  

That was it.  I decided an absentee occupant of a condo in Brazil was not workable.       

I immediately returned to a hotel and put the condo up for rent and/or for sale.  

The "return on my investment" is negative, big time.  The price of real estate in Sao Paulo has not gone up like is inaccurately implied in these forums.  

My condo is worth less than one-third of what I paid for it (not counting the multiple thefts of furniture and the dead beat tenants that did not pay their rent or the fake contractors who got me to advance money for remodeling they did not do).
 
Not only is it a hassle as a part-time occupant having a condo in Brazil.  Each month there are condo fees, utilities, door men to pay (24 hour services).  

Worse though is the fact that Americans who do not own a business in Brazil cannot legally open a checking account even to pay their condo bills.  You cannot pay condo fees and other condo related expenses with credit cards.

Having no Brazilian bank account means repeated trips to an ATM machine to get cash to pay the condo and other expenses.    No, owning a condo in Brazil as a part time resident is not something I recommend or am happy about doing.    

Nope, hotels are fine for me - 

 

  

[sanddunes]

11 minutes ago, mvan1 said:

I replaced the stolen items only to have them stolen yet a third time

Wow, this is crazy!  Sounds like it was an inside job by the security of the building.

Has real estate in Rio also depreciated?  From what I have heard it has gone up a lot there

[mvan1]

15 minutes ago, sanddunes said:

 

Has real estate in Rio also depreciated?  From what I have heard it has gone up a lot there

It depends on who is buying and who is selling and when the property was purchased.  

Right now, the U.S. dollar and other major currencies are strong against the Brazilian real.  Real estate in Rio and other parts of Brazil are cheap for those with a strong currency.  However, for Brazilians, the properties are too costly.   

To answer the Rio part of your question, here is a portion of the below linked article from Forbes"

"Rio de Janeiro real estate prices fell over 2% over the last 12 months, correcting for inflation. The capital city of Brasilia saw a 1.2% decline year-over-year.  Prices continue to decline in real terms nationwide. Inflation ended the year at 6.5%.
 

Here is the full aricle:

https://www.forbes.com/sites/kenrapoza/2017/01/04/brazil-real-estate-distressed-investing/#6b014a083cdc

 

[Gotti]

Definitely an inside job. I have friends with property in Brazil that has never anything stolen in more than a decade, you should had had notified the building manager or even the police. The problems with payments using a local checking account is accurate, a real problem, in the past was possible to work around if you had an account in an American bank, like Citybank, but I hear is no longer the case. By the way, is also a problem for a foreigner to have an American bank account in the US, at least in New York.

[mvan1]

26 minutes ago, sanddunes said:

Wow, this is crazy!  Sounds like it was an inside job by the security of the building.

 

I agree.  They knew that the gullible gringo who bought the condo was not there a good portion of the time.  

Even though many Brazilians are wonderful people, there are also dishonest Brazilians.  

[Gotti]

A refrigerator, a stove, several times? Not that hard to solve, no other option than people in the building.

[sanddunes]

51 minutes ago, mvan1 said:

My condo is worth less than one-third of what I paid for it

Is it worth less than 1/3 what you paid in reals, or is the depreciation due to changes in currency (converting the reals back to dollars)

[mvan1]

24 minutes ago, sanddunes said:

Is it worth less than 1/3 what you paid in reals, or is the depreciation due to changes in currency (converting the reals back to dollars)

It is a combination of issues but the major devaluation is the fact that I bought the condo when the real was trading around 160 or so.   In other words, I had to use more U.S. dollars to buy the condo then than if I bought it today for the same price in Brazilian reais.   If I were to sell the condo even at the same price I paid, the exchange rate is less than half of what is was when the condo was purchased.  Then there are the upgrades to the condo that added to the cost.   

Back then, when President Lula was in office, Brazil was the shining star of South America.  There were predictions of great wealth and growth for Brazil and for those who made investments there. 

I knew several Americans who also bought condos in Brazil.  We all took a hit. 

However, I am the last one standing.  

After the corruption scandals involving Brazilian politics, Brazil's currency began a negative slide and you know the exchange rate today - 3.75 to 1 usd.  

[mvan1]

22 minutes ago, Gotti said:

A refrigerator, a stove, several times? Not that hard to solve, no other option than people in the building.

No doubt about it.  

However, how can a non resident gringo and part-time condo resident go up against Brazilians who deny any involvement in the disappearance of the items?   

 

[sanddunes]

3 minutes ago, mvan1 said:

After the corruption scandals involving Brazilian politics, Brazil's currency began a negative slide and you know the exchange rate today - 3.75 to 1 usd.

For you it seems like it would make sense to hold on to the property until the real recovers. 

When I was in Sao Paulo I met a banker who told me the real is probably close to bottoming out again, and that I should invest in BZF, (which is an ETF that tracks the real - essentially an easier way of buying a currency forward).  As the real goes closer to the 4 mark I'm thinking more of initiating a small position.

Do you think the real has bottomed or do you see it sliding further?  I know historically the elections tend to cause swings in the real, and the next elections are in October.

[sanddunes]

10 minutes ago, mvan1 said:

No doubt about it.  

However, how can a non resident gringo and part-time condo resident go up against Brazilians who deny any involvement in the disappearance of the items?   

 

Yeah, it is a difficult situation.  The only thing I can think of that would help would be to install cameras.  There are cameras now that record directly to a cloud, and you can view them remotely from anywhere in the world on your laptop/iphone. 

[mvan1]

19 minutes ago, sanddunes said:

For you it seems like it would make sense to hold on to the property until the real recovers. 

When I was in Sao Paulo I met a banker who told me the real is probably close to bottoming out again, and that I should invest in BZF, (which is an ETF that tracks the real - essentially an easier way of buying a currency forward).  As the real goes closer to the 4 mark I'm thinking more of initiating a small position.

Do you think the real has bottomed or do you see it sliding further?  I know historically the elections tend to cause swings in the real, and the next elections are in October.

Brazil's economy is in the pits.  The unemployment rate is horrific.  How could any Brazilian afford to buy my condo?  I have had several meetings with bankers and prospective buyers only to leave the meeting after hearing the banker tell the prospective buyer they cannot give the buyer a mortgage for the property.  I have gone through that too many times.  I now just let the tenant pay me the rent (usually late) and I continue to pay the monthly condo fees and other expenses.  

I figure if Brazil ever recovers to a point where the economy is stable, I might move back into the condo but I have not figured out how to keep the furniture from being stolen while I am not in the condo.

I look at it as just a bad investment that might one day be a place to use  

As to the real bottoming out, I do not think that is so.  How can anyone make a prediction like that when Brazil's economy is in such a terrible state?  As much as I care for Brazil, I think things will be rough for a while or at least a few years.  

What possible way can Brazil pull out of its present economic calamity?

Look at the low salaries people who are making - those who are lucky to be working - Terrible

Not a pretty picture, by any means.  

 

[Gotti]

4 minutes ago, mvan1 said:

No doubt about it.  

However, how can a non resident gringo and part-time condo resident go up against Brazilians who deny any involvement in the disappearance of the items?   

 

Although is high crime country is not lawless, people do get arrested and the police is delighted to show some work specially when they don't have to risk their life as is the case. Besides, a recurring pattern makes sense to purchase a security device for a fraction of the cost of the appliances that would record all activity. That said, for many reasons I would not recommend a purchase of property in a foreign country if you do not live there.

[mvan1]

19 minutes ago, sanddunes said:

Yeah, it is a difficult situation.  The only thing I can think of that would help would be to install cameras.  There are some now that record directly to the cloud and you can view them from anywhere in the world on your laptop/iphone.

Ah ha, you are thinking like an honest American.

Even if I installed such cameras, I believe the Brazilians who stole the furniture would be knowledgeable enough to disable the cameras long enough for another theft to take place.  

The only way to stop the theft would be for me to either live there, keep the tenants living there or have someone else live there. 

When the condo is empty of someone living in it, the condo is a sitting duck for theft.  The Brazilians know that I am thousands of miles away and will not know of the theft until I return.  Such an invitation is hard to resist for a crook.  

[mvan1]

3 minutes ago, Gotti said:

Although is high crime country is not lawless, people do get arrested and the police is delighted to show some work specially when they don't have to risk their life as is the case. Besides, a recurring pattern makes sense to purchase a security device for a fraction of the cost of the appliances that would record all activity. That said, for many reasons I would not recommend a purchase of property in a foreign country if you do not live there.

Good idea, however, security devices can be disabled for periods of time.  Internet could go out (on purpose) and the theft could take place.  

I would not know the exact date of the theft because I am often not in Brazil.  I would only know of the theft after I return.  

Nope, as I said, buying a condo in Brazil was the dumbest thing I ever did.  

[Gotti]

Nowadays you can easily watch your property live through the internet anywhere on Earth and record the thieves disarming your equipment. On the other hand people always find a way to overpass the most advanced system at banks everywhere and every once in a while somebody steals a Van Gogh or something, wondering if a refrigerator is worth a repeated action.

[mvan1]

2 minutes ago, Gotti said:

Nowadays you can easily watch your property live through the internet anywhere on Earth and record the thieves disarming your equipment. On the other hand people always find a way to overpass the most advanced system at banks everywhere and every once in a while somebody steals a Van Gogh or something, wondering if a refrigerator is worth a repeated action.

While it is true that one can use advanced equipment to monitor activities, all it takes is for the internet signal to drop and the surveillance equipment stops working until the signal is restored.  

I believe that whoever steals from the condo knows about cameras and how to disable them.  

It is a losing battle.   

[floridarob]

I know a couple of guys that I met from the old board that bought houses in Rio....from my understanding they did really well on their investments. One of them tore the house down and built from scratch....rented it out for 1000 usd per day and more during the Olympics, World Cup and some other event.

Tomcal knows more about these guys current affairs than I do....I think one even bought a few penthouses and converted them into several apt's...or something like that.

[torogen]

6 hours ago, mvan1 said:

Brazil's economy is in the pits.  The unemployment rate is horrific.  How could any Brazilian afford to buy my condo?  I have had several meetings with bankers and prospective buyers only to leave the meeting after hearing the banker tell the prospective buyer they cannot give the buyer a mortgage for the property.  I have gone through that too many times.  I now just let the tenant pay me the rent (usually late) and I continue to pay the monthly condo fees and other expenses.  

 

mvan1, have you thought of renting your place out on AirBNB? There are several people who will take over the management of your property for you, doing the check in/out, cleaning, etc., for a cut of the revenue. If it's in Ipanema or Copacabana, it might be a way to recoup some of your investment, and have local eyes on the property and furnishings, rather than an unreliable tenant.

[wncdemcub]

2 hours ago, torogen said:

mvan1, have you thought of renting your place out on AirBNB? There are several people who will take over the management of your property for you, doing the check in/out, cleaning, etc., for a cut of the revenue. If it's in Ipanema or Copacabana, it might be a way to recoup some of your investment, and have local eyes on the property and furnishings, rather than an unreliable tenant.

I was thinking the same thing. There are many on the board that would be good customers

[mvan1]

7 hours ago, torogen said:

mvan1, have you thought of renting your place out on AirBNB? There are several people who will take over the management of your property for you, doing the check in/out, cleaning, etc., for a cut of the revenue. If it's in Ipanema or Copacabana, it might be a way to recoup some of your investment, and have local eyes on the property and furnishings, rather than an unreliable tenant.

At the present time I found a tenant that pays rent on time.  That tenant has been there more than one year.  I do not want that tenant to leave. while I still own the condo.   This tenant is reliable and does not cause me any aggravation like previous tenants did.  

In the past, I had several dead beat tenants that did not pay and had to be evicted.  That was costly and took a lot of time.    

In the meantime, whenever I receive an offer to buy, I meet with the agents (and sometimes the potential buyer) only to find it a waste of time because of Brazil's strict lending/mortgage rules for new buyers.      . 

If the current tenant leaves, and I have not sold the condo, I will look into the Airbnb possibility.  

Thanks for the suggestion.  

[sanddunes]

@Tomcaldid you consider buying in Rio before deciding on Mexico?  I’m guessing it’s possible to get a lot more for your money in Mexico currently

[Badboy81]

On 6/4/2018 at 8:05 PM, sanddunes said:

I was bored today and looking at real estate in Rio.

Overall Rio is expensive, but cheap compared to NYC or San Fran.  An average 2 bedroom in Ipanema goes for around 1-1.5 million reals (beachfront and luxury buildings go for much more).

Has anyone here bought property in Brazil?  The dollar is pretty strong now..

I came across one dream property - I'm sure it costs millions, but it is amazing!  I can only imagine how much fun it would be to invite a bunch of garotos to come hang out with you in the pool there

I considered investing in a property in Copa and was told by a friend in Rio that used to live in the states not to...

Americans are charged much more than the Cariocas/Brazilians AND the income is not consistent if you rent it out...

He owned an apartment in Copa, NICE place, 3 bedrooms 1 bath, maids room, close to the beach and around the corner from Pointe 202...He rented it out during major holidays and events and made decent money but not what would be considered great money, ie, Super Bowl rates for places in downtown Atlanta...

I think his mortgage was about 1K per month...what I considered decent...He is considered middle class and had to let the place go for a smaller place in Botofoga because renting rates werent consistent...

I even asked him to property manage for me and he said that there is a ton of competition in Copa and Ipanema and unless I was getting paid in US dollars it definitely wasnt worth it...

Brazil puts Americans through way too many ropes to purchase in Rio....I saw something on House Hunters International about the requirements and after doing my research decided against it...

Easier to stick with other peoples apartments...