Renovating vs Building a New house in Brazil

I've  bought and renovated two existing condominiums, one of which we still own in Copacabana, and one that we just sold last month in Itaipava......finally........!! Looking to buy another one in the "centro historico" of Petroplis as I type this actually.

I refuse to purchase anything that is either a completed new construction, or being sold from plans only. I really like stuff that is "perfeito para modernizar" KKKKKKKKKK 50-75 years old, concrete and art deco, usually being sold by the single child of deceased parents.

I want to control every aspect of the reno, so, I act as the general contractor.

I want to choose what exactly is being used, how the work is bring done, and control the end result.

Reno versus a new build is easy from an administrative standpoint in my limited experience. Maybe SPREB (Tony) will joing the thread.

The other questions are more region specific and frankly I just asked for referrals and spoke to the subtrades my Brasilian architect/designer suggested.

My best advice is hire an architect/designer who has hundreds of completed jobs in their portfolio as well as the necessary contacts.

@Pablo888 When I first came to Brazil a year and a half ago, I moved into the big house with my Wife, my 97-year-old Brazilian mother and my wife's mentally challenged uncle. This was the beginning of my wife's Assisted Living Compound on a tremendous amount of land in a small village of 2,500 in Northeastern Brazil. We then built a very cool one floor Air BnB type house for me and SIMBA next to the pool for about 20k USD. A few months after that my wife built a third home for our live-in PM caretaker and her kids. Everything was done NO DEBT. with local skilled construction workers.

Roddie in Retirement

FYI, I am not sure if our proximity to Jericocoara has anything to do with it. (20 minutes), but there is a tremendous amount of construction on new buildings is in this village.

@Pablo888

As you already know I have quite a lot of experience in both these fields, and am thus well placed to answer.

Firstly we have to go into a little more detail - are we talking about a house or condo/apartment, and renovation or extension? The rules for condos generally forbid you from making any major structural or external alterations, so you are limited to internal work only, and this could correctly be termed renovation. With a house you can carry out far more extensive work, but if this involves, for example, building an extension greater than 5% of the existing square footage, then this should be called construction not renovation. However if all the work is internal it can be called renovation, even if it is fairly major!

The difference is crucial - it is MUCH, MUCH more complicated to construct than to renovate. The licenses, rules, certificates, employee laws, union involvement, public notices, regulations, taxes, costs, etc, etc are worse with construction compared to a renovation project. For example, you cannot register a new construction in your name unless you can prove that you have paid sufficient taxes for that value of construction, but you do not have to with renovation (unless you want to!).

Buy the worst house on the best street to get the most financial return; the workers may be the same in both cases, so no problem there; be prepared to buy what you do not want, but have the vision to be able to create what you want; employ (BY RECOMMENDATION) a good architect if you are going to do a lot of redesign, a good engineer, and most importantly a bilingual Project Manager if you will be away for any period of time during the project, or if language may be a problem.

07/18/24 @Pablo888.  I second Gasparzinho777's observations.

Our building was built between 1968 and 1972, and when we move, I'll be attracted to something of the same vintage:  the construction is solid, the units are more spacious, and the ceilings are higher than most of the recent construction we've seen.

We spent an additional 25% over the purchase price on the apartment renovation, and a lot of that money went into things that a casual visitor would hardly be aware of -- a major upgrade of the electrical wiring, a slightly less extensive upgrade of the plumbing, and replacement of all the windows -- but they certainly enhance our comfort and lifestyle. 

I was my own general contractor, too, and the project came in on time and on budget:  but only because it was basically my fulltime job for the duration. 

In an older building, it pays to be alert for "hidden treasures".  We saved a lot of vintage ceramic tile that is irreplaceable today.  We were thrilled to discover only just in time that some ugly built-ins that we almost yanked out of two bedrooms were only ugly because a previous owner had painted over two full walls of gorgeous Amazonian hardwood, mahogany and tigerwood, that were cheap fifty years ago but practically unavailable in this quantity now.  We left it all intact, and had it stripped and refinished instead.

@abthree A friend showed me his ”old” house recently. Three bedrooms, kitchen, dining room and living room with a corner office space. About 200m2 with very high ceilings. Every room in the house had builtin cabinets. Very thick dark reddish wood. Mahogany perhaps? Absolutely beautiful cabinetry. I asked him when the house was built. About fifty years ago, he said. He bought the house 25 years ago, vowing to die in his beautiful house.

The comments from Gasparzinho 777, Roddiesho and Abthree above are spot on. My contribution: In 2022, we completely renovated the apartment we own in Aguas Claras Brasilia. In 2023, we renovated the upstairs unit of a rental house we own in Ceilândia, Brasilia, and now, in 2024, we are renovating the downstairs unit. In all three projects, we demolished walls, did extensive electrical work (i.e. running both 110 and 220 throughout the apartment), and major plumbing work. We learned a lot along the way.

It took 19 months to renovate the apartment. We hired an architect, an engineer, and an on-site contractor for the apartment. It is true that with an apartment renovation you are restricted to maintaining the structural integrity with regard to exterior appearance and load bearings.

In hindsight, we felt we got little for our money from the architect. She was competent, and her floorplans were essential, but she steered us to high-end suppliers who didn't offer more quality for less price than what is available at Leroy and Champeon.

The engineer was a total waste of money. He was simply a pass-through between the architect and the contractor. I don't recommend hiring one; he gave us no value but was sure to claim all the credit on his Instagram.

The contractor we used for the apartment had his pluses and minuses. He had poor time- management skills: never making his suspenses and trying to juggle more than one project at a time.  However, he was creative and imaginative.  He always took on a challenge instead of defaulting to "no, it can't be done." And he wasn't afraid to work on things he had never seen before, such as a garbage disposal, dishwasher, and multi-jet shower system. He also was willing to admit when the quality wasn't there and redo it at his expense (such as standing water in the shower that would not drain because the shower floor wasn't angled for water flow). Measure, measure, and measure. Then measure again.....

We did find excellent vendors to install our windows and electrical. We had (still have) lots of challenges with the cabinetry. We probably picked one of the top cabinet firms in Brasilia, but with all the cabinetry we had done, we were bound to have challenges. They are re-installing the master bedroom pocket door right now (oh, just now they can't find an essential piece,  and are trying to blame me, when I know they took it back to their factory. Ugh.), and they are back to the drawing board to replace a hallway door.

You need to understand that you are living in the wild, wild west when doing renovations on Brazil. Some of the differences between U.S. renovations and Brazilian renovations include the absence of construction, electrical and plumbing permits and inspections (Apparently different for building new homes). Don't expected to find anyone bonded, certified, licensed, and insured. Few admit errors and always blames the other guy or declares that there is no mistake. Work can be shoddy or incomplete. We are constantly inspecting to ensure they meet our satisfaction. (Can be little things such as using different-colored and type of screw heads on a shower door hing, or, yesterday, telling them that they left a large gap in the wall that they need to fill.) It seems like a stereotype, but few of them seem to have pride in their work.  They may ask you to pay for tools that you would expect them to own; or they will try to use an inferior tool, or an inappropriate tool to do the job. I was a program manager, and I had three houses built in the States, and with project that has a million variables, things will go wrong. But plan on at least a factor of five for challenges on your Brazilian project compared to U.S. projects. Boa sorte!

@EricPau Thanx, I agree. I am 64 these answers may be better for the younger generation, but I could be dead by then. The great thing about my family is we just get it done and move on. I am too old to thru all these architects, permits, planning, regulatory compliances, licensees, unions, public notices etc. We build it, We sleep in it, We're done.

Roddie in Retirement

1) Depends where you are buying and current market evaluations n costs.

2) Building / renovation costs-Building will be a huge pita unless you do like the one guy here, bringing all his contractors in from another country. Even renovations...there are zero standards here n most all if them as so lazy and incompetent,  I wouldn't  trust 90% to build  my doghouse. Also you need to know all the regulations n processes because it's nothing but horror stories and nightmares so be extremely careful what you buy or reno especially  chacaras...again no standards.

3)Available skilled labor and / or materials. This is a joke....unless yer willing to shell out big bucks for certified  ppl with credentials. Materials here also suck n are so hard to find simple things like a male garden hose connector that doesn't  have an adapter or is shitty plastic.

.

4) Who to trust? Trust NO oNe!  Do it all in writing as they love to lie about what they said they would do and they love to process you in court. After all yer a rich Gringo.

5) Building permits and / or regulatory compliance requirements

Bureaucracy  at its finest.  Good lucking getting anything g done in a timely manner. There are so many horror stories.

6) Personal worry / anxiety factor during construction

You should worry. Shitty workmanship is everywhere. Have a good lawyer n contracts up yer ass to protect yourself. 99% of realtors are useless.

72And may be - potential resale value Same everywhere  in the world...what will ppl pay in the economy today? Based on location and crime index. You really need to know your market. They ask a fortune for a pos...walk on by.

@Cserebogar

My experiences in Brazil could not be more different from yours, but I do supervise everything very closely, and take a great deal of time and care over the people I choose and the materials.

Maybe you just employed the wrong people, or treated them badly, or just tried to get everything done as cheap as possible? Do this in any country and you will get shoddy work.

@EricPau Fun fact: So I went to Champeon, which is a building supplier here in Brasilia yesterday because they delivered 10 pails of the wrong color paint to our rental units. While there I wanted to buy some nuts, bolts and washers to make a bed headboard. They had bins of various sizes of washers and nuts, but they don't sell bolts! Wait, what????? KKKKKK

Just to clarify, if you are going to do any kind of major construction (including extensions), then you must hire an architect and engineer as you cannot get a license or register the property otherwise (which means, potentially, you cannot legally occupy or sell it).

If you are doing renovations, and are confident on design, then an architect is not necessary, but a good one could majorly improve your plans. If you are possibly doing any internal demo or structural work, then an engineer is highly advisable, as he will sign off on the structural calculations with his CREA license, and that gives you protection if things go wrong. He may only be a small cog, but he is trained to calculate what rebar you should use and how much of it...

As far as workers are concerned, I may previously have given the impression that it is easy to find perfect workers. It is not, and I have had my share of lemons. I also have had shower trays slope the wrong way, doors not close properly, bad plaster work, etc, etc.

I recall many years ago I used to have dinner every Friday with an American friend who was employed for 18 months as the senior electrical engineer at the new Jeep plant 30 minutes away. Every week we would scratch heads and compare notes trying to understand what workers were doing - or rather why they were not doing things as we wanted.

Then it clicked - it is a cultural difference - Brazilian workers were accustomed to working in a certain way, and to a certain standard because that was what other Brazilians had previously demanded so as to save money and/or time. We just had to train to a higher standard, and get rid of the ones that could not raise their game.

Therefore it may be easier for me to choose good workers that I have used before, but much harder for an individual who is relatively new to Brazil, without the benefit of this experience. So always take recommendations, inspect previous work, be prepared to hunt and pay for the right people, and make sure that your project is supervised, supervised and supervised every step of the way.

    Just to clarify, if you are going to do any kind of major construction (including extensions), then you must hire an architect and engineer as you cannot get a license or register the property otherwise (which means, potentially, you cannot legally occupy or sell it).

    -@Peter Itamaraca

@roddiesho, you have made me curious on how you were able to build a house for under US$20K....

Are you referring to prefab houses like what's available on Amazon -> https://www.amazon.com/HUGHEARTS-Portab … d_source=1 ?

Is this even an option in Brazil?  What are the pros and cons?

@Pablo888 When my wife and I lived in Suburban, MD. right outside of the Nation's Capital we owned an attached 4 family townhouse. Our next-door neighbor was a high-ranking Postal Service Manager, and she came home one day with a very knowledgeable colleague from work. She accidently locked herself out of the house. My wife volunteered to open the door using our AMEX card.  Literally while Mr. Stuffy Pants was in the middle of saying how it could NOT be done, my wife opened the door.

I knew we were a special family when on Thanksgiving Day, (I hear it is a very busy travel day), we were waiting at one of the big DC airports for her sister and the flight was delayed from Brazil. Using what had to be a flip phone back in the day, she called the airline and demanded that they put her sister up for the night in a hotel at her departure and have her transported to the airport when her re-scheduled flight was ready to come to the USA. They did it.

I learned early on that our family, as they say in Alice in Wonderland, could do six impossible things before breakfast. 

I also learned not to ask Patrick Mahomes how he wins so many super bowls or not to ask my wife how she does it.  I guess in this case it doesn't hurt that we live in a remote village of 2,500 so far away that even the chickens have to take the bus to get here.

As far as the actual construction. In my area, at least, Everything is Brick. Wood attracts termites.  As far as the contractors go, they are doing one house after another, so they are very good at what they do. My wife also was raised in this area and is extremely popular and friendly. We are close (by we, I mean if I stand next to my wife.) to the people here, so this is not an ANGIES LIST pick. That includes the store that sells the supplies, cement etc. My wife is also a MAJOR employer in this area. Sometimes I have to wear headphones early in the morning for all the landscaping that goes on at our place.

The bottom line is it is only possible because of the Lifelong Relationships my wife has made in this village.

Roddie in Retirement

Pablo88

You can buy a new construction house with lot and legal title a bank will lend on for R$250+ around Cabo Frio for example.........they are out there.......concrete too.

    Pablo88
You can buy a new construction house with lot and legal title a bank will lend on for R$250+ around Cabo Frio for example.........they are out there.......concrete too.
   

    -@Gasparzinho 777

Are you suggesting a foreigner can get a mortgage in Brazil? Not sure what you mean by R$250+

    Pablo88
You can buy a new construction house with lot and legal title a bank will lend on for R$250+ around Cabo Frio for example.........they are out there.......concrete too.
   

    -@Gasparzinho 777

Thank you @gasparzinho777.  I will really need to see in order to believe....  I mean I need to see the house before I can believe that.

       
@roddiesho, you have made me curious on how you were able to build a house for under US$20K....   

    -@Pablo888

It is possible to build quite cheaply in Brazil, like this, if you already own the land, are only building one floor, the finishes (which are the really expensive bit) are irrelevant, and you are in a location (as @roddiesho describes) that is not going to attract any inspection or fiscalisation.

In this case, you need to appreciate the difference between possession and title, and where a rural family compound is involved possession is often what a Brazilian family will accept - thus reducing the cost considerably. Normally I would not advise a foreigner to ignore title, but it does happen - indeed some cities (like the very popular Pipa in RN) are based on possession due to titles being lost (or not passed) decades ago.

For comparison construction costs are about R$3500 per square meter for a good location with basic finishes, R$5000 psqm for better finishes, and can be R$10,000 or more psqm for top end finishes.

        Pablo88You can buy a new construction house with lot and legal title a bank will lend on for R$250+ around Cabo Frio for example.........they are out there.......concrete too.        -@Gasparzinho 777Are you suggesting a foreigner can get a mortgage in Brazil? Not sure what you mean by R$250+        -@Peter Itamaraca

No, I'm saying there are properties in small coastal cities being built and sold with legal title documentation that passes the test for using FGTS or getting a mortgage from a bank. So a foreigner paying cash has some assurance it is legit, subject to legal review.

I meant R$250K +.........

@Pablo888 A neighbor is building a small apartment building near me in Ilhéus on an 80m2 lot. Ground floor is an apartment and garage. Three floors above will be one apartment  per floor, one apartment for the owner and two apartments to rent via AirBnB.

Ground floor is complete. Cost was said to be R$200.000 for the ground floor apartment (40m2 ?) and garage and the first floor slab.

Standard concrete columns and slabs with the ubiquitous orange block walls. Handmade wooden forms for the columns. Pre-made rebar "lajes" and styrofoam were used for the first floor slab.

Construction time was approximately seven months with one mason and one helper. Concrete was mixed by hand on the street, except for the first floor, when a portable concrete mixer was brought in, and ten men with buckets poured the floor in five hours.

If the cost is accurate (?) that is R$2.500 per m2.

Mason was paid R$150 per day, the helper R$80 per day.

One data point for you.

@alan279 What is the esimated rent? and is there a "home's too expensive to buy, gotta rent" situation here in Brazil, like in the USA. My younger brother, who has had his own Real Estate Development business for over 20 years, owns several apartment builidngs in San Francisco. It is possible, though remote, that he still does not have enough money and may be interested.

Roddie In Retirement

@roddiesho A friend says you can never have too much money.

Rent on an ordinary 80m2 apartment in Ilhéus is about R$2.000 a month. I've heard that you can make three times that on AirBnB.

The newest highrise residential building here has 85m2 three bedroom apartments advertised at R$700.000 and up. You can rent one for R$3.000 a month.

I'll let the real estate investors here opine on Brazil vs USA.

    @alan279 What is the esimated rent? and is there a "home's too expensive to buy, gotta rent" situation here in Brazil, like in the USA. My younger brother, who has had his own Real Estate Development business for over 20 years, owns several apartment builidngs in San Francisco. It is possible, though remote, that he still does not have enough money and may be interested.
Roddie In Retirement-@roddiesho

@roddiesho, you would think that someone who owns several apartment buildings in SF - one of the prime real estate locations - would be rich.  I am not so sure these days.... The SF supervisors have been pushing for affordable housing, rent controls, and no-eviction mandates etc....  SF is more in the hands of renters than landlords...  The mayor is not much better... Not sure what your brother thinks of life in SF....

What I know for sure is that SF is not for me....

@Pablo888 More in the hands of the renters than the rentiers?

    @Pablo888 More in the hands of the renters than the rentiers?
   

    -@alan279

I do not live in SF - nor will I live there but I have friends who live in rent control housing at awfully low prices because they were set a long time ago.

Not sure whether they are subleasing from the original lessor - but they are not paying a lot in rent.

That's what I mean by renters have more power than landlords in those cases.

Why should landlords set the rents?

    Why should landlords set the rents?
   

    -@alan279

Landlords can set any prices for the rents but I think that markets ultimately decides whether those rents are reasonable - whether too low or too high.

This is the same for the most expensive real estate market that I know - burial places in a cemetery - anything from plot of land facing a view to a small shelf for the ashes...

@Pablo888 Sorry, that was sarcasm. I am extremely confident he is at least a millionaire. I never really got to ask him what he thought of SF.  I am fortunate that I can get newscasts from All over the United States here in Brazil and am well aware of the rampant homeless camps, as well as the Target shut down. He has been there for decades; however, his plans are to get a Golden Ticket and move to SPAIN.

Roddie in Retirement

@Pablo888 I read a bit about San Francisco rent controls. It's complicated. Rent increases are tied to San Francisco inflation, with lots of ways for the landlord to increase the rent.

San Francisco is not for me, either. The coldest winter I ever spent was a summer in San Francisco.

You should also be aware that it is exceptionally rare for a new construction project to be completed on time and on budget in Brazil - with notable exceptions, respect to @abthree!

Several engineers I have spoken with always advise to allow a decent contingency to allow for this, as it is almost expected - and not over budget by a small amount, nor late by a little time...

@Peter Itamaraca, @abthree! Except in the Northeast.  My house was completed when I was not even watching. On the day it was scheduled to be done, it looked like they had a little left to do, but I stepped away and when I came back it was done.  That being said I certainly don't disagree with you. When my father passed at 99 the house was left to me, and my younger brother and my brother immediately decided to renovate it. He had a Brazilian Crew do it, with me in R.I. on the ground, while he stayed in S.F. giving directions.  After staying in the US almost until it was finished, I came to Brazil expecting it to go on the market shortly, but he kept telling me the Contractors kept having reasons for the delay.

Roddie in Retirement

@roddiesho Did you have a webcam on the construction site so you could monitor the progress?