Got an interesting proposal today

    My wife sent me an interesting proposal today. It seems that my mother in-law. Wants to buy us a house. I have only met her a few times, Christmas last year was the first time I met the whole family.
We want to live in the NE but will get the house in sp as an investment. As we will be living in SP at least a year.

Is sp a good place for real-estate investment as opposed to other areas of the country?
   

    -@Canforbra

Yes it is, but it depends entirely where in Sao Paulo might be. 

As an investment, it has to have good rentability.   And under such criteria, not all locales or neighborhoods apply.

You stil can make bad investment decisions in Sao Paulo.  Not to mention, overpay for it.  A good example of overpaying is buying new from the developer. You are bound to pay replacement cost plus profit, as opposed to pay comp rates that you can haggle on used inventory.

And then, knowing the local  rental inventory, time on the market, etc.  There are drivers to rent that affect how fast and how well it is rented ( both on rate and quality of tenants attracted ).

And then, there are building telltales ( regardless of being a condo building, or single home tenancy). There are lemons out there.  And gems in the rought as well. 

Buyer's perception of value is often flawed out here. There is a lot of herd mentality amongst foreigners and even more so amongst local Brazilians ( we called them Paulistanos ).

It is a minefield.

I am suspect, as I am a licensed Real Estate Broker for the last 10 years in the Greater Sao Paulo. So, take it with the grain of salt.  But I've seen plenty. I started my trade over 12 years ago in the Boston-Cambridge-Exurbs market.  And continued in Sao Paulo.  I live in the ABC region, but Sao Paulo , the City Proper, is where i ply my trade.

    My wife sent me an interesting proposal today. It seems that my mother in-law. Wants to buy us a house. I have only met her a few times, Christmas last year was the first time I met the whole family.
We want to live in the NE but will get the house in sp as an investment. As we will be living in SP at least a year.

Is sp a good place for real-estate investment as opposed to other areas of the country?
   

    -@Canforbra

Real estate as an investment can be a minefield, so you really do need to do your own homework in the locale you are considering. Regardless of location, always buy the worst house on the best street, buy with your head not your heart, and remember that - nearly always - the lowest price investment brings the greatest percentage rental return, if that is what you want.

The best investment may not necessarily be where you would want to live, and you should consider the balance between capital appreciation and rental income as your priority for investment return.

On the subject of rentals........

This is anecdotal and I don't have access to the data that Tony does, but, FWIW, there are hundreds, if not thousands, of Cariocas here in Rio desperately trying to sell their investment rental properties they purchased in those modern newish high rise "jambalayas" that they HAVE BEEN UNABLE TO RENT FOR YEARS.

Don't look for return on capital as your focus, but, return of capital.

We will be living in it for at least the first year and then renting it out.

It will not be a place under construction but used not over 10 years old roughly.

It will be a house with a yard as we have 3 dogs.

Must be close to the metro and so on.

Are house inspections a thing there for foundation and so on?

I was about to fire out a few suggestions, then I read and picked your wish list apart. Below, my questions and pontifications.

Yours under brackets, and thick font.

"We will be living in it for at least the first year and then renting it out."

Living in a place for one year and turning the keys thereafter does not make any sense, once "She the one who shall be obeyed " gets her nails in it. 

It is self contradicting. If you land a bargain, using local labor, or a do yourself, you will spend at least 2 years getting it suitable to call it home, and then, you are turning to tenants, who , by the way, will start making unauthorized modifications at will.

"It will not be a place under construction but used not over 10 years old roughly."

A Single family under  10 years??? There aren't many to choose from, at least close to any subway stop and lest of all any affordable, unless you go far west / east . Most of your housing stock 10 years and under are apartment units. Anything resembling a house, unless a very expensive one, is a gated community, and that's beaucoup amounts of Reals ( or Dollars, if you prefer ).

The only compromise for you, your wife, and dogs on a 10 under building would be the penthouse or garden level apartment. A house, if well located and affordable enough, it will be old, and in need of serious updates.  That's gut rehab territory,  no less.

Unless, there is, money is not an issue, and you have a blank check to write.  which you haven't made clear.

"It will be a house with a yard as we have 3 dogs."

Yard, three dogs...... Most single home families within a subway stop walking distance nowadays will have a smallish  yard. Not large enough for three dogs, unless we are talking Chihuahua Dogs.  Never mind a "house in a white picket fence in the burbs", which sounds like, as you describe your ideal buy.

Even for a high walled single family home, three dogs and yard means, expensive, as in Pacaembu, and heavens forbid, Morumbi ( where you risk car jacking by the day at the light traffic, or just getting out of your driveway/garage  ).

"Must be close to the metro and so on."

Close to the Metro, it's prime real estate and land around anything built or yet to be built in the subway path ( that's a 10 minute walking distance ), is worth a small fortune. And it the lot where the house resides is coveted, the Developers already made the rounds on it, and are talking land swap for a few units in the yet to be built high rise ( that is their modus operandi, btw ).  Yes,  you can find them, but cheap they aren't. Starting at seven figures, FYI.

"Are house inspections a thing there for foundation and so on?"

Most Brazilians are oblivious to this practice, and for me it is a sound practice, above the cosmetics or the building's general shape. Bad foundation = bad investment.  I sold a multi family property in Boston, and the buyer wanted to see the basement before posting an offer.   Problem is, most houses here lack a basement.  You will see old houses with basements ( not full basements, btw ), on pre-war homes in places such as Mooca, Lapa, Ipiranga.

The only time they ask for a basement, it is the apartment building garage to see where their parking spot is located. And no one actually got around the walls to spot cracks, leaks, seepage. A damn shame, if you ask me.

But, that alone does not cover the structural integrity checklist, there are more to look into, which you are not well aware of. 

And in finalizing....

There is such place as you outlined, but compromises will have to be made.. You want affordable, with yard, close to the subway, then all the sudden, that "under 10 year" checklist item is out of the window. You are in "Handyman's Specials Territory".   

And then, a year in and out,  turning keys to tenants, unrealistic.

Yeah renting, dont get confused when you see prices and think profits. Example, im in the northeast. 5 bedroom house, large area, 700 reais a month, this house sat for 4 years empty before we looked to rent it, then the owner at his own cost had to put it to standard before we could move in, you cannot project costs onto renters in brazil lol.