August 16, 2022

Pawel Kentaro Grendys explains why buying real estate in Latin America is beneficial

In any corner of the world, someone may be thinking that, in times of political and economic uncertainty, it is important to resort to investment alternatives that are resistant to the sudden variation of economic indicators and also, that these end up affecting the value of equity in the medium and long term. Pawel Kentaro Grendys, an expert in Latin American real estate, discusses the possibility of investing in real estate in Latin American countries.

Now, with the possibilities of the digitalization of the real estate business, the doors are opened to take advantage of this capacity of real estate in other countries than the one inhabited. That is, it should not only be subject to the economic and political fortunes of a country but can diversify and make a better management of investment risk by evaluating alternatives in other countries in the area.

To this are added the effects of real estate digitalization and the dynamics of different countries both in the real estate market and the tourism sector, as it will be a breeding ground for knowledge that will allow taking care of the value of heritage over time.

On the one hand, investing abroad in real estate can be something that fits your lifestyle. Still, it may also be that you are analyzing various economic variables in your country and in others, and that you are thinking about strategies to protect your assets in the long term.

Explains Kentaro, “The digitalization of many of the processes necessary to buy a home is a reality, many processes that previously needed face-to-face are now being carried out by electronic means. Banking procedures are increasingly facilitated, inventory management systems become more efficient, and their use is beginning to spread among construction and real estate companies.”

You begin to see transactions with cryptocurrencies such as Bitcoin and others, sales of entire housing projects that do not have a physical sales room and others that allow you to visit them in a completely virtual way with 360 tours based on the 3D renderings of the builders and developers so you can get an accurate idea of the investment.

Before, it was said that it was necessary to physically visit the house to invest to be able to trust in the investment to be made, but this is no longer necessary. Therefore, the security of the investment is not lost. Look at various real estate agencies that are exploring the ways in which technology can facilitate your experience and offer you the necessary confidence you need.

The digitalization of markets also has an effect that intersects with that it has on the real estate market through P2P platforms for short- or long-stay hosting. Thus, a foreign investor can take advantage of his real estate in several ways: inhabiting it and taking advantage of the possibility of surplus value or renting it to have periodic income, and resorting to the economic movement of tourism in different countries.

According to Statista, in Mexico, the sector that contributed the most to GDP in 2021 was, tourism, the issue of accommodation. According to the UNWTO Barometer (World Tourism Organization), this same country is seventh in arrivals of international tourists and 17th in foreign exchange income for tourism in the world ranking.

In Mexico City, an approximate occupancy rate of 64% (between June and November 2021) is observed in cross-reference platforms between P2P or shared economy platforms such as Booking or Airbnb. 62% of these rent the house or the entire apartment instead of private rooms (32%) or shared rooms (1%). It considers that although 75% of rentals happen between one and three nights, long-stay rentals were the segment that grew the most in 2021, according to direct reports from Airbnb.

On the other hand, in Colombia, the most visited cities are the capital district of Bogotá, that hosted more than 4 out of 10 international tourists in 2020. Soon we will have the figures for 2021 that we know are higher due to the changes in travel policies due to the vaccination process against COVID-19 and other health and biosecurity regulations.

In Brazil, tourism also has an active dynamic. Information on occupancy rates was seen in 2021 for cities such as Rio de Janeiro between 33% and 55% and Sao Paulo between 43% and 71%. In that same year, they showed an average monthly income of 2,760 and 2,187 reais, respectively.

The prospects for investing in Latin American real estate are numerous. The economy in the region is growing, which is creating more value.