Average cost of real estate in rural Brazil or Colombia?

[TheGreatAdventurer]

Hi all!

I've been wondering what the average local in these two countries would expect to pay (US dollar equivilant) if they were looking for a house in either a small town or maybe out in the countryside with a bit of acreage to grow crops.  Everything I've seen online shows property that is basically MORE expensive than property here in the 'States, usually in the ritzier parts of bigger cities, and I have a hard time believing that the average local is paying anywhere near this amount for an average local-style home.

Could you find something decent in any given average part of these countries for say, 20 grand?  Is it possible to find listings for this caliber of property online, or are all online prices pretty much exaggerated?

Thanks!

[robert angel]

One thing you have to check is if the nation will let a foreigner even own property there. In my wife's country, foreigners can't own more than 49% of a property, except for a very few already hugely overpriced special 'zones' in small, designated areas.
 
That hasn't stopped foreign men there from marrying native women and buying up 100% rights to some of the nations most exclusive ocean front property and building swank resorts--the holdings in their wive's names. As a result, there aren't many beaches near populated areas that don't charge a steep fee to let people set foot on them, unlike in the USA, where you can buy property ON the beach, but the public almost always has free, unfettered access to the beach itself.

We bought a house in her country (actually still are paying for it for a couple more years at least), and my wife, (who some years back became a US citizen) and I had to travel to her country's embassy in Washington D.C. to establish 'dual citizenship' so that we can fully own the property legally.

The exchange rate for our US dollars was down about 20% compared to not so long ago in her country, which stung a bit. Brazil's economy is doing very, very well, but most other country's money doesn't go very far there I've heard. I bet it would cost a 'pretty penny' to convert most currencies into reais. I think dealings with foreign currency there can get pretty complicated. In part to try and contain inflation, they have some pretty stringent controls on foreign currency that enters the nation.

Not all, but probably most nations, try and set currency exchange rates and property purchase options to weigh considerably in their favor. I think some Carribean nations are more attractive financially to foreigners who want to buy, say a farm, but I don't know too many folks who want to play Carribean roles as the 'Beverly Hillbillies" there.

There are typically 'options'--ways around purchases, some out right illegal, others in  more of a 'gray area' of legitimacy, including leases that can run several decades, but just like casinos, in most nations 'the house' is typically going to win in the end, namely in the hands of the natives and their court of laws.
 

[braziliangirl]

Could you find something decent in any given average part of these countries for say, 20 grand? 

Not in Brazil. Can you find something at the price in the US? Did you know that Brazilians are running to buy state in the US because it's cheaper than here right now? I took a look at the listings around my city and the rural plots started at R$100.000,00 (you can use oanda.com to convert to USD), and I live in the north, where land is a lot cheaper.

Also, as Robert said, the law is very strict about foreigners buying land here. Take a look at the law, it could be a good training for your Portuguese: http://www.planalto.gov.br/ccivil_03/leis/L5709.htm (the size of the módulos depends on the county.)

[TheGreatAdventurer]

Thanks for the replies guys!

Robert - yeah the PI has some crazy restrictions... glad you've managed to get your property situated though!  It almost seems like even if you become a citizen of the Phils you STILL can't properly own property... lol.

BG - Thanks for the link.  Reading it though it looks like it is discussing restrictions on foreigners who want to buy multiple parcels and invest/develop, not so much the average Joe like me who would want one parcel, just a couple acres with a small house to grow enough crops to help sustain myself and future family.    Great reading all the same though!  Oh and, to answer your question, yes unfortunately house prices in the US have dropped so much, especially in my area, that you can easily purchase a house in the city for LESS that 20 grand...  I'm certainly glad to be renting, and will not have any property to sell/unload before the time comes to leave for Brazil (or wherever I might be headed).

[Kiltboy1]

5 years ago you could buy beachfront lots on the Pacific in Ecuador for 10K I know because I bought 2 lots. Now those same lots are going for 50K. Reason CHINA . They have come in and invested billions of $$ in building oceanfront housing communities and with new interstate highways and low interest loans to all Ecuadorians, they are taking advantage and buying like crazy. The prices are going to soon be approaching Costa Rican prices. That being said, you can still find Fincas for 20K in places like Cotacahi or Mindo or Puerto Lopez. You would need to enjoy basic living, but you can do it there.
 
KB

[braziliangirl]

BG - Thanks for the link.  Reading it though it looks like it is discussing restrictions on foreigners who want to buy multiple parcels and invest/develop, not so much the average Joe like me who would want one parcel, just a couple acres with a small house to grow enough crops to help sustain myself and future family.    Great reading all the same though!  Oh and, to answer your question, yes unfortunately house prices in the US have dropped so much, especially in my area, that you can easily purchase a house in the city for LESS that 20 grand...  I'm certainly glad to be renting, and will not have any property to sell/unload before the time comes to leave for Brazil (or wherever I might be headed).

I haven't read it all, but keep in mind that módulos rurais refer to properties size, not the amount of parcels. Depending on which state and county you are, a two módulos property might be around 100 acres. I don't know what size you are looking for, but where I live the rural properties are huge, since the price is so low, so they all fall into the law's restriction.

Sadly, I don't know any place in Brazil where you can buy a house for less than 20,000 USD, let alone a rural property.

[TheGreatAdventurer]

Wow that's way bigger than I would want or need LOL.  Just a few acres for growing crops and being at least somewhat self-sufficient is all I will be looking for when the time comes.  Of course, that being said, I wouldn't exactly turn down a huge plot of land like you are talking about! 

Pricewise I was just curious.  When the time comes I will pay what I have to pay.  Brazil seems to be a country that is seriously on the move, so I expect that prices will continue to rise over the next couple of decades as the economy grows.

Kiltboy - thanks for the perspective on Ecuador.  With all these dramatic increases in cost across the board, I can't help but feel that I'm a bit late to the party.  But, better late then never is the way I look at it!

[benjio]

I have yet to visit a Latin American Country where it wasn't simply a question of money. Regardless of any restriction a government entity may have, the wheels can usually always be greased with the careful placement of the right amount of money in a white envelope, going into the right pocket. Depending on how much a piece of property is worth, where it is, and how bad you want it; that white envelope might have to be a black suitcase. In any case, be extremely careful about who you're doing business with.
 
BG is absolutely correct. From my experience, Brazilian Real Estate in any place worth living is nothing short of ridiculous. I'm making plans to relocate to Brazil as an Expat next year, and I've been apartment/condo hunting in Rio de Janeiro. Some of the prices real estate agents tell me make me pause for a second. I'm convinced they are going to bust out laughing and admit they were just joking. Until now, they have all been 100% serious. Brazil is a real estate oddity. IMHO, in the long run, if you're considering a house, it's more financially sound to rent instead of own. I don't believe the recent economic boom in Brazil will be maintained over the next couple of decades. Anyone buying real estate there now will take a huge loss if they are doing so with the intentions of a long term investment. The recent dramatic rise and subsequent fall in the value of the Brazilian Real is only a small testiment of things to come. The country will never move backwards again, but everything that's going on now is going to calm down big time over the next decade or two. Again, this is just my opinion as someone that takes their investment career VERY seriously, and has researched real estate trends in Brazil. There are dozens of reasons for why I believe these things that I won't go into here. I could most definitely be wrong though. We'll just have to wait and see.
 
If you're thinking Colombia, smaller cities will definitely give you more bang for your buck. A very good gringo friend of mine in Pereira (Dosquebrados) recently bought a four story office building that was 12 years old for only $325K. He converted the top two floors into a double decker apartment that he lives in with his wife. He rents the bottom floor to a convenient store owner, and the second floor to a women's clinic. In 7 years, his investment will have paid for itself...not to mention he's living rent free for the rest of his life. Towns like Pereira offer huge opportunities to someone that knows the lay of the land and has cash money to spend.
 
The only advice I can give you in terms of Colombia is to chop the first offer in half to get rid of the gringo tax, then start the negotiating.

[TheGreatAdventurer]

Good input Benjio, thanks!

Truth is I don't plan on buying anything until way down the road, after I've settled in to my country of choice and maybe done some more travelling around the world.  Either way I have no interest in purchasing real estate as an investment... my only interest is in finding a good home to stay in and retire when it's all said and done.  Still in my 30s though so it should be a while before I think of beginning retirement!

Brazil should be interesting to watch over the next few years.  If I decide to live there it will be because I've spent time in the country and love it, and of course, have found my lady love!   Perhaps it would be better to wait until things settle down, as you put it, before purchasing.  Rent and live my own personal adventure during the boom and then at the end, find my little piece of paradise, begin to settle into my retirement and begin raising a family. 

Rio is a world all of its own, I get the impression.  I've read that the average rent goes from about 700 to 2000 USD per month for something halfway decent, in a decent location.  Does this agree with your findings?

[benjio]

Good input Benjio, thanks!

Truth is I don't plan on buying anything until way down the road, after I've settled in to my country of choice and maybe done some more travelling around the world.  Either way I have no interest in purchasing real estate as an investment... my only interest is in finding a good home to stay in and retire when it's all said and done.  Still in my 30s though so it should be a while before I think of beginning retirement!

Brazil should be interesting to watch over the next few years.  If I decide to live there it will be because I've spent time in the country and love it, and of course, have found my lady love!   Perhaps it would be better to wait until things settle down, as you put it, before purchasing.  Rent and live my own personal adventure during the boom and then at the end, find my little piece of paradise, begin to settle into my retirement and begin raising a family. 

Rio is a world all of its own, I get the impression.  I've read that the average rent goes from about 700 to 2000 USD per month for something halfway decent, in a decent location.  Does this agree with your findings?

Unfurnished, anywhere near the beach, in a shoebox sized apartment, I reckon you could swing in between $1000-$2000 USD monthly. Before BG educated me on the more affluent neighborhoods of Rio, I assumed Copacabana and Ipanema were as good as it got. BOY WAS I WRONG!!! During my most recent stint in Rio I spent some time at a coworkers apartment in Barra Leblon. This was a unit owned by her family for years that she had inherited and remodeled. Value 5 years ago was $150K. Now units in the same building that are smaller than hers are selling for $500K. We're talking about a 850 sq. ft. two bedroom, one bath apartment here. Beautiful view of the lake which I'm sure you can attribute 25% of the cost to, but still a bit ridiculous if you ask me. Cariocas are use to these types of prices though. Although the middle class is making a significant emergence in Brazil, I'm not even sure where people pulling themselves out of poverty will end up should they choose to stay in Rio. The city is set up for Upper Class, and lower class, with nothing in between. Many gus I work with live on the other side of the bay and commute every morning. They make excellent money and still can't afford to live in the city in a decent area. Unless they start tearing down favelas (which would constitute a much bigger war than the one that is already going on in Rio), that's the only option I see.
 
You've got a great plan Adventurer. Stick to your guns. So much more out there than Colombia even though it is "prime real estate" for wife hunting. There are some awesome ladies in Brazil, but in the end I guess it just depends on your preference. IMHO men generally don't go to Colombia to find their equals. I think some men have the misconception that just because a woman is educated, successful, and can hold her own that she'll behave like many American Women. I found the girls in Brazil to be the complete opposite of this. The single women I work with are very successful and well educated, but almost all of them have expressed to me that they would love to get married and become mothers. Most also say that they would be completely willing to leave their careers to be stay at home Moms if their husband's income could provide them with a comfortable life. Of course, this is just my limited experience with a couple of dozen girls. But I truly believe the possibilites there are endless. I can say I've met just as many girls like this in Minas Gerais, Recife, and Vitoria.
 
Happy Travels. Happy Hunting. Cheers.

[braziliangirl]

I think some men have the misconception that just because a woman is educated, successful, and can hold her own that she'll behave like many American Women. I found the girls in Brazil to be the complete opposite of this. The single women I work with are very successful and well educated, but almost all of them have expressed to me that they would love to get married and become mothers. Most also say that they would be completely willing to leave their careers to be stay at home Moms if their husband's income could provide them with a comfortable life. Of course, this is just my limited experience with a couple of dozen girls. But I truly believe the possibilites there are endless. I can say I've met just as many girls like this in Minas Gerais, Recife, and Vitoria.

Thanks for saying that, Benjio! That is true for me and for most of my (and my sister's) single friends.

[TheGreatAdventurer]

Thanks Benjio.  I think Rio is awesome, I might even start my adventure there and stay for a while when the time comes.  Unless I struck it rich down the road however, I can't imagine actually purchasing property in or near the city, especially since I'd like acreage...

For me the most important thing about my country of choice is how well I fit in and enjoy the culture.  It's different for me than many of the others on this forum since, as you know, I plan to move permanently.  I don't ever plan on returning to the USA once I leave.  Finding the RIGHT girl is extremely important to me too, and I do mesh well with someone intelligent and sophisticated but with good old fashioned morals and who enjoys many of the things that I am into, or would be willing to try immersing herself into them and enjoying them with me if she is unfamiliar.  And especially someone who loves me for what I am and doesn't try to change me, respects me as a man and acts like "a lady in the streets and a freak in the sheets" as the song goes. 

I don't know anything about Colombian or Brazilian women first hand, as I've never been there or even interacted with any in the 'States, but that's all part of what this "adventure" is about isn't it?  First-hand discovery!   

Thanks for your well wishes!  Perhaps if I get down to Rio within the next several years we can meet up for a drink, if you are there yourself and are so inclined.

[robert angel]

We were in NYC this summer and I read a little article about an industrious couple who made their $1800 a month 240 square foot BROOKLYN apartment seem quite livable. They used tricks like making a little loft over the kitchen area for their 'low headroom' sleeping area, but even managed a dresser and a TV up there. They used mirrors to create the illusion of space and picked just few small decorative items to 'brighten up' their space--keeping it from looking too 'busy'..
 
Brooklyn has areas now that are quite cool and trendy, but it used to be that Brooklyn was sort of looked down upon and a lot of people there aspired to live across the river, in Manhattan.


Even though it has gone down a bit at times, I think NYC  has held it's real estate values pretty good historically and looks pretty good long term, but some values in other areas where they've grown very fast, notably China, have taken  some steep falls.


I think that like in much of the USA, the mindset where you bought a property and held onto it for decades, if not for you, or your family's entire life--that this has changed and adversly effected property values in many places.


Where once a family bought a home and raised their family in it their entire lives, it got to the point where people bought a house, automatically assumed it would increase in value significantly in a few years (which it actually did for a while) and then they'd sell it, buy a bigger, pricier house that the banks were more than happy to sign them up for, ad nauseum.


It got to the point where people where 'flipping' their property like trading baseball cards and the party had to end sometime. Seems as if some other nations/cities act/ed in similar ways.

[TheGreatAdventurer]

Yeah I always thought it was pretty rotten how out-of-control the whole "flipping" phenomenon had gotten...  back in the day when I was married and we were looking for a house, prices in our area had virtually doubled over a span of 7 or 8 years, while salaries remained more or less unchanged.  For people like me who just want a decent place to call home, it was like going through a meat grinder.

In a society that is completely obsessed with making profit at all costs, however, nothing is sacred.  Not even families or homes.  One of the many, many reasons I don't fit in here -- being a guy who thinks there are more important things in life than making a buck or striking it rich. 

[robert angel]

If you weren't already a home owner 10-15 years ago, it's very hard to 'get in the game' in many areas. A big part of American life for centuries now is out of reach. The old assumption that each generation was pretty certain to do better overall than the previous seems dashed too.
 
I have two sisters who were shopping for identical properties in the Detroit area. One had a good amount of cash and the other had  'just' 20% to put down. The typical home they shopped for was a distressed property, one that five or so years ago, would have fetched maybe $160,000, but was offered by the bank as a foreclosed on propery, for $80,000.
 
My one sister with 20% to put down, who has had the same decent job for 15 years and a fine credit rating, was rejected every time by the bank, which receives ridiculously low interest rates on money from the Fed. govt, but refuses to share their largesse with most people. My other sister, with cash in hand,easily  walked away with the house for $65,000 cash. Her husband put about $5000 in materials and through 'sweat equity' improved it and they sold it for $100,000 less than a year later.
 
At least my one sister and her husband were 'enterprising'--improving on something real and keeping the cash flow local. I've heard that 90% of USA jobs are in various parts of the service industries and I don't think that many of them pay a real livable wage base.
 
 We still see leveraged buyouts still going on, where big companies buy smaller ones, use the smaller ones to borrow money, then cash out the smaller company's  now increased value. They then leave the company w/ the debt, basically forcing them to cut costs by laying off employees and reducing or flat lining wages, before often claiming bankruptcy and shutting down all together, leaving people out of work.
 
This seems to be America's preferred 'business model' and seems more akin to 'creative destruction'  and profit w/o morals than any interest in rebuilding of the middle class. Futhermore, the profits from such endeavors are often stored or otherwise used overseas to promote more profitable industry abroad, where they make products to ship to the USA.

[V_Man]

One issue we have here is that the baby boomers bought property. Plus a holiday home. Plus investment properties. Now fewer and fewer young people can afford to get into the property market. It looks like, for the first time, a fair segment of the next generation may never own their own home.
The house price to income ratio in Australia is 13.10.
This is a very high figure.


There is some talk that as the baby boomers try to sell off their investment properties, there are not so many people around that can afford them. What many Australians don't seem to realise is that immigration is proping the housing market up. If we don't keep importing some people, there would be a crash.


BTW I read this week that Brazil's growth is slowing this year. Commodities markets have droped a lot in the last 2 months. That's not good for Australia.


Note that rental income in Colombia is taxed at 33% and there is a 33% capital gains tax.

[Brazilophile]

I looked into real estate in Brazil 8 years ago when the dollar was strong against the real.  There were a lot of high end condos going up on the beachfront areas in cities.  In Recife, there was a full fledged gentrification of Boa Viagem.  Several smaller hotels and apartment buildings near the beach were demolished and replaced by high rise condos.  It was quite something to see a foreign neighborhood change so much over 5 years.  Even a large hotel at which I used to stay, Hotel Boa Viagem, and a notorious strip club, Chakatak, were torn down.

I inquired at a sales office for a condo under construction.  I think the ocean facing condos were $R1,000,000 or around $350,000 USD at the exchange rate at that time.  The part that floored me was that the building was going to take 3 years to finish!

I met several ex-pats who had bought property.  One described his house in Curitiba in detail.  It was in the suburbs, not in the city, 4 bedrooms, 3 bathrooms, and was directly on the beach.  He said he paid the equivalent of $40,000 USD for it.  That was less than a fully loaded SUV at the time (2003).  I have seen many VERY nice houses outside of, but close to major cities, that were reasonably priced.  Near Recife is a smaller city called Olinda.  It is a historical city as the Dutch built that city during the time they took Brazil from Portugal.  It has nice and reasonable housing.  But you have a long commute to Recife.

In Salvador, there appear to be large upper middle income communities just beyond the terminals of pubic transportation.  I had taken public buses to the ends of the line and then walked around.  It was to the north and on the Atlantic Ocean side that I saw hundreds of single family homes, townhouses, and 3 and 4 story condo buildings, with nice lawns and cars.  There were even a few gated communities with guards at the entrance to the parking lot.  I didn't get the prices of these homes.

I also checked the newspapers for apartments and houses for rent or sale.   The pattern I noticed was that prices decline gradually as you move away from the city along the coast, prices decline dramatically as you move away from the coast.   I would say that almost all of the expensive housing is located within 1 kilometer from the beaches and the inexpensive housing for the poor is located beyond 5 kilometers from the beaches.  I also think you can find very reasonable housing in the interior cities like Belo Horizonte, except for Sao Paulo and Brasilia.

Just my $0.02 and somewhat dated.  I have no idea what is actually happening in 2012.

[Gato4Astrid]

Some useful properties to buy in Colombia:


http://www.metrocuadrado.com/servlet/co.com.m2.servlet.MostrarHome
http://www.vivareal.net/buy/colombia/




Property Guide


http://www.globalpropertyguide.com/Latin-America/Colombia

[TheGreatAdventurer]

Thanks guys!  Appreciate the input and links.  I love the beach and will spend time there whenever I can when the time comes, but as far as owning a home and land goes, I will most assuredly look for something at least a few miles inland, if not WAY inland.  Being able to drive/take a transport a couple hours to spend the day at the beach would be more than fine, but not even required.