Investing in Brazil

Hi Ikex,

It depends of the type of investment. If the target market are locals or forgneirs. I would say that the country side has a lot of opportunity right now, specially in São  . A lot of families are leaving the busy city and buying properties one or two hours away from SP in expensive condos like Alphaville,, Barueri and Granja Via ana. If your target are forgneirs I would say at the coast.i

Salvador is a nice area as well and there are a lot of good good oppotunites there, but Sergipe I dont recommend ltsince its not an wealthy state and they have a lack of opportunites there. Which makes everything more difficult

Hi,

Thank you very much for you reply.

I would say investing more for the local market rather than foreigners at this stage and to sell on rather than rent.

Are you aware of Minha Casa Minha Vida scheme and what are you thoughts on this?

Are there any areas in particular that you’d recommend? Also apart from benefitting for the exchange rate do you think it’s wise to invest in the real estate market at this time? Or would it be better to wait?

Has anyone invested in Brazil not only for their primary residence, but to buy and sell real estate or buy land and build? And if so how was the experience?

Thanks in advance for any advice

IKexplorer

***

The ABCS of investing in Real Estate:

1.Study Job Creation and types of jobs being created. Job Growth = Housing Demand and Demand for Office, Retail ,  and Warehouse space.  New business, a new plant, a new resort, or simply by studying the local business ecosystem. 

2.Zoning.  Study Zoning.  If you can't make a reading or interpretation of zoning, then get an expert for advice.   On changes in zoning laws often you will find hidden opportunities for profit.

3.Avoid RE Broker Sales Pitch like a Plague.   Most of them are pathological liars.   Ask them about the local market, housing demand, but take whatever is being said with a grain of salt.  Buyer beware, you are the sole responsible for your own failure or success. so do your homework. 

4.Gateway Cities, or Destination Cities.  Unless there is a Gold Rush in Aracaju, Sergipe, I do not see it as a place where you will get wild returns.   It's a backwater.  Unless there is a license being granted to operate a legal casino, the chance to operate a resort. or some farmland or oil patch, that might as well be a pie in the sky.    Just because you fancied the city and its life style it does not mean you will make a go with Real Estate.

5.Assume the worst common denominator there is
a. You wil be providing real estate to Brazilians. 
b.You will be a novice on Real Estate Transactional Laws and Requirements
c.No one is bound to provide you with accurate information on fair disclosure laws, even if they are on the books.   

6. Find the local investors and gather as much as knowledge from them.   These are the folks who will provide you, if willing, with golden nuggests.

Spreal has hit it with his reply.
I thought of investing here in Foz but after long research I could not justify the real property investment. Just not enough money here. We get over 2 million visitors per year so basically a tourist supported city.
Not too many can afforded to buy nice real property and I would be holding the investment too long.

Well, I know nothing about Foz do Iguaçu, other than being a border region ( Tri Country ), with some tourist appeal.  At most, I would see the hotel business thriviing in there ( Niagara is for lovers ).

I would be fair to compare it to , perhaps, Niagara Falls, on similarities alone, although Brazilians brag that Foz is way way bigger.

Now, if you are a rainmaker, and a local  mover and shaker, then you might reconsider, granted you are going to be behind the next big thing. 

I am following the development on Legal Casinos in Brazil, and it is, at least for now, in a Stalemate, as I heard, the bill never took the floor in the Congress or Senate.  Such laws would never take place on a State Level basis as the Federal Government controls what goes in the country. State Government here has diminished powers as compared to the US. 

The key on legislation pieces  that were submitted were  that, if approved, licenses would be granted towards resort destinations ( estancia turistica ).   So I would do my groundwork on Rio, Foz do Iguaçu, Coastal Cities throughout. 

Of all Rio would make most sense, given the dire social and economical shape the state is. 
Given Rio is Sodoma and Gomorra all in one place, my bet would be there first.   Sin City is Rio, for all intents and purposes. Might as well be pragmatic and let them have the sorely needed jobs.

And going back to Niagara, you have to realize, at some junction, Brazilians are not seeing what you see, and in such case, would make a visionary. 

In any event, it would be wise to do your homework on target cities, as when these changes do take place, they so happen in a whirlwind.    As Bob Tasca used to say, "there are types who bet on the come, and are others who bet on the came.   The former alway end up holding yesterday's merchandise that does not move.  "


Disclaimer.  I practice in São Paulo.

It is not just Brazilian's which brag about Foz Do Iguacu even E. Roosevelt did for this World Heritage-designated park is one of the 7 in the world.
In November we recorded 1.8 million visitors in 2018. With 273 falls in a small area surrounded by the National Forest with wildlife, butterflies and migrating and various tropical birds is a site that cannot be seen in other parts of the world.
We have casinos in Argentina and Paraguay which are minutes away and probably would not fare well here, we did have a building boom a few years ago but many condo remain unfinished and "eye sores" around the city.
Hotels are everywhere. From high end resorts to hostels. Same with dining. Many open and close each month.

So that makes Rio a natural  and desirable site for Gambling Casinos, given the city is a tourist / resort destination.

I would hedge my bets on Rio. Lodging properties would be my educated guess.   
Given Rio is already Sin City, it would only make sense to make Gaming as part of the local economy.

There used to be (Cassino da Urca, Atlântico, Hotel Copacabana Palace ) , as matter of fact still is, illegal gambling ( number's racket ) in Rio.

As for being a city ridden with crooked politicians and organized crime, so it was Atlantic City, Las Vegas.

I'm putting my money into "Medicinal Marijuana and CBD Oils" lots of Loser's Atlantic City,Los Wages/ Vegas,( take a look at the US cities that have "Legalized Gambling" there all broke or bankrupt) and money into Agriculture for the "Recreational Users" need food ....lol.....just kidding don't get your quackers in a bunch...yet it is a feasible investment....smh

Growing pot is illegal in Brazil, no matter what the excuse is.  In the US you have zoned areas that allow for a dispensary.

sprealestatebroker wrote:

Growing pot is illegal in Brazil, no matter what the excuse is.  In the US you have zoned areas that allow for a dispensary.

Coming Soon .....that is All.....

Anybody know anything about "Crypto-Currencies " in Brazil....or Marijuana Stocks...lol....I really like Medicinal Marijuana. .....CDB.......Just asking....lmao.....


Taxation Issues Solved, Cartels Squashed. ...just the facts no SWAGS......

Hey Grizzly good to hear from you.
Alaskan's take risks every day. Hope most was 'tongue and cheek". Did you find Graceland yet?  Cannot build to many wood lodges here. I can not but a 2x12 to replace and bench by pool. Said Brasil does not allow that large of cut lumber?
Tex

Texanbrazil wrote:

Hey Grizzly good to hear from you.
Alaskan's take risks every day. Hope most was 'tongue and cheek". Did you find Graceland yet?  Cannot build to many wood lodges here. I can not but a 2x12 to replace and bench by pool. Said Brasil does not allow that large of cut lumber?
Tex

Horticulture is a good thing...lol....I retired I grow Roses now and Lemon and Tangerine Tree's....
I can not understand a 2x 12, have you looked for a 4x24....in case the bench breaks again, and I need to come visit, you got a pool...lol
How was the Original buit ? Here or imported....

Have you thought of maybe there is some little guy deforesting his new cow pen that may have a piece of tree that one could cut a 2x12....
Being good, enjoying Sao João,  my lady is with a Running Group so the Bahia TV Station showed up and I got a video opt...kkk....glad I have no warrents....lol.....

Alaska has dispenseries,, Ediables Shops and a Bar and Church on every street corner, Amazon is basing a Air hub in Anchorage,,Wildfires abound, Salmon are Running,Crime is esculating.....and Parents still have no rights. ..that's news from my previous home....
How's things down or up your way....got a new dog and a cat....just somethings to care for....
I'll send you a link pm of my old growers life...lol...the Wilde Northwest. ..I mean Wyatt Earp was there....can't be that bad, Wiles Post did a flyby....

As far as wood planks, well I would scour construction sites or places where houses are being demolished.  The Chinese here go  scouring after these sites to get Peroba (  Red Wood, hard on nails ) and other woods so they can salvage them and export them to China. 

The irony of all is they will use the salvaged wood to sell furniture in Europe, while sending us the garbage compressed composite furniture pieces.   And the Brazilians will buy this because, well, Brazilians will buy anything cheap for as long as it fits their budget.  If you package canned turd and sell it to Brazilians, they will buy it just as well for as long it is properly marketed and packaged.

You will not find lumber worth working on at the local Builder's Material Store, you will need to go see a "Madereira" ( a Lumber Wholesaler ), to score anything half decent. 

The good stuff still gets smuggled out of the Amazon, not matter how the IBAMA says  through illegal harvesting that goes through  Saw Mills, Lumber Wholesalers and such. 

So being in the Lumber business is a good racket.  A lot of what is exported is MDF or Laminate ).
Also, ironically as it may sound, someone ought to consider growing bambu to build Bamboo flooring. The good ones, made in Southeast Asia, are a good fit for residential use, albeit a bit soft ( take your shoes off, specially those high stiletto heels ). 

And further, importing Canadian Lumber, pine, might be a good alternative.  Sign of the times.

Went to Madereira and as advised not legal for that large of cut. Trying to fine someone to laminate 2x4 together.
I really do not see much lumber used to build here. All mason and cheap bricks.
Just want t hang a picture or new elect outlet is a total nightmare.  What work is done they leave a larger hole than needed.

Texanbrazil wrote:

Went to Madereira and as advised not legal for that large of cut. Trying to fine someone to laminate 2x4 together.
I really do not see much lumber used to build here. All mason and cheap bricks.
Just want t hang a picture or new elect outlet is a total nightmare.  What work is done they leave a larger hole than needed.

I have found when it is beyond the scope of the contractor the common response is"Not Legal"..
A Nail and Lumber is easier, yet a brick and mortar is harder, it's Brazil and everyone likes to work harder, not smarter...I saw a few old homes in the Barrios of Belem wooden yet many years old, the commundade/favelas Belem lots of wood...I guess Brick you have Money and Wood means you have No Money...I agree with SP..you may have to go to where the lumber is and maybe a mill 8n one of the hubs to find the sucker...good luck..

Well the market for expensive lumber is in Sao Paulo and possibly Southern States.

  I recall once  one homeowner who once fitted his bungalow with pricey exotic wood,, and as I had posted the ad for a home clad in exotic millwork, he asked me to tone it down and re-edit the ad, , out of fear the bogey man from Ibama might show up at his door and seize his holdings or slap some nonsense fine.

He's gone to Europe, and by then, I would not see it much of a threat, but it  used to be that if you wanted decent wood finishes, you could get it , it all depended entirely on how much you paid for. 

These days, folks will take solace to furnish their floors with cheap laminate.  The installed square meter of parquet hardwood is about R$ 500,00 and more for quality wood tiles. 

I came into the States when folks accepted synthetic carpet, and by the mid to tenth on the 2000's tenants demanded hardwood floors.   Here, well, folks excuse themselves to cheap laminate or porcelain tiling. Either one of them are plain horrible. The whole myth wood is to warm for Brazilian Summer's amounts to hogwash. 

I can concede if you are going to purpose the property as a rental that you might accept dogs, and then you will need to go with ceramic/porcelain tile.  Otherwise, I would not settled for any less than any kind of solid plan or parquet. 

Hence, running a Lumber Yard here is a darn good racket.  See how much the folks at Madel  ( chain based ) and others are making.

Texanbrazil wrote:

Went to Madereira and as advised not legal for that large of cut. Trying to fine someone to laminate 2x4 together.
I really do not see much lumber used to build here. All mason and cheap bricks.
Just want t hang a picture or new elect outlet is a total nightmare.  What work is done they leave a larger hole than needed.

There Lying to you, it maybe just your area, on my way to the gym after 4 cups of coffee 6 cigarettes  (lol/kkk) I do no endorse Smoking or Excessive Caffeine  (disclaimer). I saw so much Lumber and many cuts of lumber like more ducks than you can shake a stick @....I saw wood up to 24 ft and 2,3,4 inches....
I think it is just your area and being in the Northeast it maybe my area....

Good luck, on a positive note the IRS..recieved my 1040 now What...smh....3 mailings...I wonder which one the recieved...smh....

Lumber takes a back seat to IRS, so thanks and good refund.
Many said to go to Paraguay and get the lumber, yeah right I am going to get a 12 ft 2x12 in my trunk and BR customs will not notice? Duh!
Maybe some day I will find one dang board.

Buy a roof rack, declare it a surfboard and all problems solved....the IRS. ...next the Amended for 2016 and 2018.....kkk....
Tell customs the board is needed Spring Board for your Olympic swimming pool. ...smh

Like the way you think!   Don't think roof rack will do the trick. I chuckle seeing 1.2L small cars with trailer hitches.
How I wish I had my 3/4 ton truck now.
Dang turning a little cold here so pool I on back burner!
What the heck time is it where you are? Just pat 13:00 here
Read they decreed no DST in BR this year.

Texanbrazil wrote:

Like the way you think!   Don't think roof rack will do the trick. I chuckle seeing 1.2L small cars with trailer hitches.
How I wish I had my 3/4 ton truck now.
Dang turning a little cold here so pool I on back burner!
What the heck time is it where you are? Just pat 13:00 here
Read they decreed no DST in BR this year.

The clock on my tablet is crazy, it shows 3:34 pm on the page, yet it shows 4:34 pm on the tablet...so I am actually penning this at 4:34 pm so I am in Bahia and I did understand there were 2 time zones of a hour differances here in Bountiful Beautiful Brilliant Brasil (kkk) ..

Yea I know the feeling of small engines and big loads.. I saw a Volvo boasting I think 400hp...and I was like really....lol....and the 2.0 be like killing me...I had a Jaguar with V8, and the last was Toyota Avalon V6. I don't mind the Lil Ponies being a Olde Codger, yet it's about Power and Payload....kkk....

My sleeping pattern is 5 hours differant for as I pen this it would be 11 am AK time and lunch would be simmerin. .so I am up and out on sleep all the time, my lady moved to another room for she couldn't handle my sleep walking...lol..

I was thinking on you could roll down the back windows on your vehicle put the board in lengthwise and clear both lanes of  traffic and call it a Public Service Vehicle get a tax write off and a escort home. What you think...

How cold is it getting, we are between the 70s and 90s during the day..to me it is like the Vegas desert in Winter,  like never leave home with out a jacket.....in Alaska it's all tshirt weather even at -1F....smh...
See ya at the next Rodeo...

I am also thinking to buy a property in Brazil, someone told me, to wire money from USA to buy the property, Brazil government will charge 30% fee - is it true?

Also, it is new law that buying a property here will guarantee permanent visa?

Thanks for your input

Are you a resident in Brasil?
I would advise you to find a lawyer to go through all the real property issues.
As an investment, would really need to think hard and do a lot of research. To many pit falls.
You would wire the money to lawyer/agent. If funds are from a taxable US account on money no taxes (exchange fees es but no taxes), at closing you have taxes, fee and all the stuff assessed by the gov. authorities.
I am a novice. Did buy property, but only after a lot of traveling and help.

Do I paint the car as LATAM, sure would look like a airplane?
57 degrees and this mortar/brick house is either cold or hot. After yesterday (80) it feels like winter.
(you notice still not much on the metric system) Time no issue after years in the military but KMph. mm/cm/and metric makes me think to convert and I want life to be easy. Had enough thinking and solving while working.

stone12 wrote:

I am also thinking to buy a property in Brazil, someone told me, to wire money from USA to buy the property, Brazil government will charge 30% fee - is it true?

Also, it is new law that buying a property here will guarantee permanent visa?

Thanks for your input

Old link yet maybe helpful....the laws may have changed on buying property and "Permanent Visa""

https://www.expat.com/forum/profile.php … mp;lang=en

thanks @texanbrasil

Roughly how much is all the fees at the percentage of buying price?

Do you have a lawyer in Sao Paulo you would recommend?

thanks for the link, I'll check it out

Buying a house will not help with permanent residency.
I am in the State or Parana and do not have info in SP. Our taxes are a little lower than SP.
abthree can help more as to house. As to investment. that is a different ball game. (lots of $$$)

@texanbrazil
if the house was bought for investment, a lot of more fees?
I am planning to buy an apartment as my principal residence, as a foreigner, am I eligible to buy? Or I should apply for permanent visa first?
Thanks for your input

Cannot get a permanent residence (PR) based on buying a house. So, need to go through the process PR.

VITEM IX (RN 13/2017 CNIg):

"For the purpose of investing for immigrant, a natural person, who intends, with its own resources of external origin, to invest in a legal entity in Brazil, in a project with potential for employment or income generation in Brazil." From Brazil Consulate site, which may be outdated.
The Vitem IX visa is temporary. I would speak with the BR consulate for assistance.

As to investment for income, you will need CPF, and register with Brazil as a business, which again is a long process, and go through PR process. This is interesting as to you need a resident so need to have somewhere to show you live in BR or have an agent, which does.
I am not a lawyer and advice is just that advice.

well investment in brazil not that easy and has lot of trouble in my opinion if its for personal use its Always good to have your own place  if you planning for atleast 5 years.
Reselling is not that easy until unless you want to sell it below Market prices,investment wise in my experience i have seen a lot of people investing  in places were a lot of tourist come and go were it becomes easy for renting the places on air bnb to make some Money out of it and they spend 2-3 months in brazil,  for locals they buy second houses and either they rent out temporarly or air bnb to keep their investment running.

Someone here mentioned incoming transfer funds to Brazil to invest in Real Estate taxed at 30%.  That is bordeline absurd.  There is no such thing.   

You will pay RE Transfer Fees like any other country where you might buy property (It's called ITBI, and it adds about 4% against the purchase price ( the highest of either the tax base value or "Valor Venal" or the negotiated closing price )> 

You will pay capital gains taxes on the resale, under a certain time treshold ( if you owned property for over a certain number of years and are exempt of Estate Transfer Taxes, or ITCMD, that sum is zero ). And income taxes on rental income. 

It should suffice to notice that the demand for real estate, whether on purchase & sale or leasing transactions, is on the upside on Sao Paulo.   That is coming from a Experienced Self Employed Licensed Broker and Appraiser as I am .  So I got the bird's eye view on this.

My expertise is on Sao Paulo/Capital, and the ABC Region.  Demand for floor space, whether industrial, office, residential, retail, is soaring. Rental rates and negotiated pricing is on the up tick.   

Undervalued Assets.  Somebody else's trash, someone else's gold.     
My wholeheartedly recommendation goes to Sao Paulo Downtown Proper and adjoining neighborhoods.  For the savvy investor, you can snag single fee buildings that are still severely underpriced and reposition the asset from office building to residential buildings. 

Particularly landmarked buildings, which IMHO, are way undervalued and most locals have no idea in terms of potential use ( they feel landmarked structures are a straight jacket ).

Neighborhoods worth purposing for the short-long term potential :
Centro ( Downtown Historic ), Bela Vista, Consolacao, Campos Eliseos, Vila Buarque, Santa Ifigenia, Santa Cecilia, Bom Retiro, Republica, Se, Liberdade, Aclimacao, Cambuci. Add to the list Mooca, Ipiranga, Belem, Quarta Parade.

These are neighborhoods, whether the acquisition target is an apartment, a townhouse, an office builindg, a warehouse, an office suite, storefront, where you will see appreciation over the years as family sizes shrink, young professionals converge to more densely populated urban areas, new industries flourish  ( health care, financial, media, technology, education ).

It matters little that some of the aforementioned neighborhoods  might actually be derelict.  If you witness the gentrification patterns on the US Eastern Seaboard ( Boston, NY, DC, Atlanta, Philadelphia ), and midwest ( Chicago ), and some European Cities, well, we have a trend lag that spans about 20-30 years. in Brazil.  So, if you want to ride the tide, consider downtown Sao Paulo.   

I actually just brokered the sale of a landmarked building on Se, ( about 16,500 sf ) built in 1926, and it will be on scafolds for about 2-3 years.  Formely an office, soon a studio apartment building.  The buyer bought it for a song, and even after spending the same amount on rehabing it, it will still be at below replacement cost.   

I do not recommend Rio, at least on the short run, unless you are a patient investor with deep pockets.  The outlook is grimm, and it will take a while for it to resurface.  My incoming availability on office space alone, gives a vacancy of about 40%  overall

The report on demand for "gated wareehousing condominiums" from a industry source ( i will take with a grain of salt ), is encouraging.  We call this class of asset a Galpao Logistico.

Vacancy rates are low, and buildout is on the rise.  For the average retail investor ( the typical person with some savings, money on the mattress type of investor ), this is out of reach unless they purchase REIT's shares, in Brazilian lingo means "Fundos de Investimento Imobiliario", aka FII's . So you become a shareholder or bondholder against Real Estate Assets that bear some kind of distributions/dividends.


I took to notice there are more Mercado Livre Yellow Vans doing drops throughout Sao Paulo. Oddly enough, not a whole lot going for FEDEX or UPS, even DHL does not show a whole lot of curbside presence. 

The fact is , as far as Paulistanos habits, folks here take to get everything delivered at the doorstep, even take out food.  So standss to reason  e-commerce willl thrive here just as it did in the US.

With a couple caveats..... Refunding here is not a breeze is as it is in the US.  Customer Service is often subpar, and parcel delivers won't deliver to every Postal Code, due to robbery.

The jury is out.

but I recall, when corporate office REITS were all the hype around here, people bought in, and now, they are not faring so well.   Corporate vacancies are sky high.

Good investments require oversight, pounding the pavement, knowing the territory, doing the home work. 

Also, you need to stay ahead of the curve, and be the first to market. It means, taking risks.   

| am bullysh on Sao Paulo's downtown. The more derelict, the better it gets, as prices are not inflated, and the upside that comes with generational and zoning changes create the right type of environment that investors crave.