The Top Ten Financial Reasons for Buying Brazilian Real Estate

Nov. 28, 2007 - PRLog -- Thirty years ago, buying real estate in a foreign country was a gamble—political and social unrest in many tropical countries meant that buyers couldn’t be confident their investments were safe. But today, those same countries are paradigms of stability, and buying property in a foreign country makes good financial sense.

Brazil, for instance, is poised for tremendous growth. Michael Greene, president of Brazil Property Group, shares the top ten reasons to invest in Brazil.

1)   The Price is Right
A wise man once said, “You can’t fall off the floor,” and right now, Brazil’s property prices can only go up. Farmland and oceanfront property costs pennies on the dollar compared to the US. At Brazil Property Group, we have found that while an investor could purchase 675 acres along 3,300 feet of beachfront in Brazil for $3.5 million, this same amount of land would cost more than $1 billion in Florida.

2)   Appreciation Potential
Brazil is on the road to becoming a major world economy. Goldman Sachs predicts that Brazil will grow into the fifth-largest economy by the year 2050. Between now and then, prices for oceanfront property will appreciate by up to 7,000 per cent.

3)   Domestic demand boosting appreciation potential
Brazil’s 200 million citizens also want to buy their own homes, and it’s about to get a lot easier for them to do so thanks to new government measures to make mortgages more accessible to all Brazilians. While there is currently wide availability of beachfront property in Brazil, there are actually only 120,000 square acres of beachfront. This means that the ownership ratio could be that 1.2 people per every 2000 can have an acre of beachfront. The only way to beat the domestic demand is to get in early.

4)   Rising significance of property market in Brazil’s GDP
As Brazil continues to advance in the rankings of major economies, the mortgage and real estate industries will become a larger and larger part of the country’s Gross Domestic Product (GDP). In Mexico, 20 percent of the GDP originate in these industries. Mortgages and real estate contribute 1.7 percent of Brazil’s GDP, and Brazil is better positioned for growth than Mexico. The underdeveloped nature of Brazil’s mortgage industry is due to the fact that only one Brazilian bank—Banco Real, a subsidiary of ABN Amro—issues Residential Mortgage Backed Securities (RMBS), because most Brazilian banks prefer to keep mortgages funded in-house. As more banks move into RMBS, however, thy will be able to expand the number of mortgages they sell.

5)   Farming growth
Brazil’s farmers currently cultivate approximately 42 million acres. Rising commodity and food prices are expected to lead this amount of farmland to increase by 7.5 times over the next 25 years, until 315 million acres are under cultivation. Whereas farmland in the US costs as much as $10,000 an acre, raw farmland in Brazilian states such as Tocantins can cost as little as $20 per acre. The real appreciation value in this sector is unparalleled.

6)   Favorable currency exchange
If a US citizen used dollars to buy property in Brazil four years ago, his investment would have doubled due to currency appreciation alone. Back then, the Brazilian real was four-to-one with the dollar—today it is 1.80 to $1, with no end to appreciation in sight.

7)   Export success
Brazil has been exporting agricultural products and other commodities for decades, but the export market has reached an all-time high. This success has resulted in the appreciation of the real, lower interest rates, and the reduction of government debt. As exports continue to thrive, the government will lower interest rates further. Rates are projected to fall as low as eight percent in the upcoming year, providing inexpensive credit for millions of Brazilians and dramatically increasing real estate appreciation.

8)   Favorable tax regimes
High taxes and high insurance can sink even the most lucrative-seeming real estate deal. But in Brazil, taxes are extremely low, and since the country has never experienced a crippling natural disaster, home insurance rates are equally friendly.

9)   Low property management costs
Reasonable wages mean that hiring a property manager and construction crews are more affordable than anywhere else in Central or South America.

10)   Low cost of living
Buying a second home is a considerable expense, but money goes farther in Brazil, and not just when it comes to buying a home—all other costs associated with quality of life are commensurately less expensive in Brazil than in the US or Europe.

There are hundreds of other reasons to consider buying property in Brazil. To hear more, contact Michael Greene of the Brazil Property Group.


Brazil Property Group is a full service real estate company operating in all places in Brazil.  We specialize in investment properties and ocean front properties as well as large industrial projects and large Amazon properties that can be used for Carbon Mitigation.  We have one of the large selections of Brazilian Real Estate in the world.  Contact us today.

Media Contact: Michael Greene
Phone: US 1-616-308-1312
E-mail: Michael@brazilpropertygroup.com
www.brazilpropertygroup.com

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Brazil Property Group is a full service real estate company that specialiizes in assisting foreign customers who seek to enter the Brazilian Real Estate Market,  Brazil Property Group specializes in commercial, industrial, farm, bio-energy, ethanol and large tracks of land.  We also will assist companies set up new bio-energy projects.  Brazil Property Group also assists with residential, beach front properties.

Website: www.brazilpropertygroup.com