Brazil is a country in transition. It ranks as the ninth-largest economy in the world with a GDP of $ 1.839 trillion but continues to hold back from political catastrophe, high unemployment rates, and the disastrous recession of inflation.
Investment in Brazil includes a trade-off between risk and reward because political change and commodity-dependence make it more dangerous than advanced markets. Worldwide investors recognize Brazil best for its rich natural sources.
The country also has a relatively stable economy. After taking steps towards financial stability and liberalizing its economy in the 1990s, Brazil has become a top-tier economy with a growing technology sector and an inward focus that should reduce commodity dependence.
The ever-growing technology sector should be an encouraging sign for long-term investors, as well as increased government spending to improve infrastructure.
One of the primary risks of an investment in Brazil is its political instability; He has some unstable political history that continues to this day. In 2015 and 2016, several officials were involved in criminal activities with state-owned oil giant Petrobras.
Penalties against corporations involved in these scams have limited some of their business opportunities, prompting foreign companies to leave them and drive them out where they have gone.
Reasons to buy property in Brazil
The Brazilian government is making a major effort to encourage foreign buyers to invest in the real estate market. It initiated a direct and restriction-free procurement process for foreign investors. Everyone can buy real estate in Brazil, whether the buyer is a resident of Brazil or not.
The only restriction applies to property in rural areas or the borders of other countries that only residents of Brasil are authorized to buy. Very attractive tax options for non-residents such as 0% purchase tax or tax deduction are allowed. Also, all properties are sold on a freehold basis, meaning the buyer acquires 100% ownership of the land.
With the investment in the tourism sector being another top priority of the Brazilian government, the demand for holiday residences and holiday villas has been steadily increasing. Due to a visa policy that provides permanent residence permits to retirees with a fixed pension rate, the demand for retirement communities provides another investment opportunity that is not subject to seasonal effects.
The demand for housing in Brazil in general is very high. At present, there is a shortage of 8 m homes in the country, the number is increasing. This would give rise to large-scale housing construction within the next years, thus presenting more possibilities for investors who do not intend to use the property for themselves.
1: Underdeveloped Markets
Because Brazil has gone through many years of recession in the last two or three decades, people cannot buy land and develop it to its full potential. Most of Brazil’s landscape is untouched. Therefore, it is easy to find land to invest in, and depending on the area you choose, it will not be over-saturated with similar growth.
2: More properties are available than buyers
Due to the ongoing financial pressures in Brazil, the real estate market is favorable to buyers. Properties are selling significantly less than they were a few years ago.
3: Brazilian currency has fallen to a record low
The Brazilian currency has been uprooted due to political and economic troubles. Today, the dollar is almost double what they were not so long ago.
4: Foreign Ownership Is Encouraged
The property is not only owned by approved foreign investors in Brazil but is also encouraged. Foreign investors, whether they are investing in capital or property, have the same rights as domestic investors. If you are investing in Brazilian property and you live in the United States, your rights will not be limited based on the fact that you are not a Brazilian resident. Such rights make Brazilian property investment favorable.
5: Natural beauty of Brazil
Especially if you invest in real estate on the Brazilian coast or near the Amazon, the natural beauty surrounding the property will always be impressive. Banking on Brazil’s continued monetary success is risky, as the financial landscape in any country is very high. However, people will not lose interest in the natural landscape, so your property will never be ineffective.
6: Secure Investment
The Brazilian property registration system is solid and Brazilian urban areas usually represent safe places to invest. Investing in real estate in Brazil can be an effective and attractive way to diversify your real estate portfolio.
Housing, especially rent, is likely to be the largest expense unless your employer provides a housing allowance to subsidize the cost. The average monthly rental price of a furnished 274 sq m (900 sq ft) will range from R $ 1,973 (USD 528) to R $ 3,182 ($ 852) in some areas.
Housing costs are generally higher in major cities such as São Paulo and Rio de Janeiro but will need to be considered against the additional expense of daily spending coming from rural areas.
Where to buy property in Brazil
Brazil is currently one of the fastest-growing property markets in the world. It offers a wide range of assets in every taste and budget. For now, property prices are considered low, but experts claim that prices will double in the next few years.
With a coastline of over 7000 kilometers, Brazil provides beach accommodation at a reasonable price based on the region. Currently, the region that is considered the most promising for investment in Brazil is the North East. Property prices are already rising in this part of the country, but are still at such a low level that an investment will pay the most.
If you intend to buy property in big cities the prices will be significantly higher, but still below European and American levels.
However, it is worth considering investing in affordable housing to let the property go to Brazilians and Brazilian residents who are not only looking for temporary housing. The price of these homes or apartments will be much cheaper than luxury holiday residences and rental earnings will be reliable.
Taxes and fees
There is a local transfer tax of 3 percent on this property, and the notary fee is usually around 2.5 to 3 percent of the selling price. A lawyer can charge $ 2,000 to $ 5,000 depending on the property and the lawyer.