The Brazilian real estate industry offers attractive investment opportunities for foreign investors. For any foreign investor looking for investment opportunity in Brazil, the real estate industry of the country would fetch greater returns. In fact, if the real estate sector in Brazil is compared to its counterpart in the United States, you can see Brazil is a low risk investment opportunity.
Moreover, real estate is less volatile in comparison to other investments such as stocks and hence, you can achieve stability in your investments by investing in Brazil real estate. Brazil has recorded a steady flow of foreign investment in this sector and there is a speculation that this is likely to grow in future. The foreign investment in Brazil’s real estate is mainly seen in construction of office buildings.
There are two primary opportunities for foreign investment in Brazilian real estate sector
An intermediate term investment
Active participation in investment for long operational cycle (20 years) while earning the revenue
Alternatively, Investor can remain alert and take an exit before the project ends which also guarantees good returns.
The Foreign Institutional Investor (FII) in Brazil has a typical structure in the Brazilian market that offers fiscal advantages in investment sharing in real estate sector. Such advantages are not found in other forms of securitization in Brazil. The Brazilian Law8.668 (1993) defines all the operations such as buying and selling of assets and profit sharing of FII as tax-free. The current legislation clearly mentions that private investors are exempted from tax as long as they follow the rules of distribution that says they cannot own more than 10% shares in FII. The FII continues to make investment in shopping centers, office buildings and hotels in Brazil.
The Brazilian real estate market is likely to give you more than 10% annual return on your investments in real estate sector even after considering greatest market fluctuations and critical market conditions. If you decide to sell your shares in FII in the secondary market, you can expect annual return rate of 19.67% for an investment cycle of 37 months. Hence, Foreign investors are likely to make profit even if they decide to take an exit from the FII investment in shorter period of time.
The Brazil real estate market offers a good risk/benefit quotient to all its investors. The investment in Brazil Real Estate is real. Hence, an investment in Brazilian real estate is likely to get you more annual income in comparison to similar investment in America. Brazil has seen rapid development in recent years and the country is seen as a viable property investment destination. Some of the economic factors that favor real estate investment in Brazil are
You are likely to get return of 20% per annum on property process
Good currency rates make the investment cheap for foreign investors
Incentives and Active encouragement for FDI – It is possible to own 100% land and property in Brazil. Inflation at an all time low at 5.7%
Cost of living and property maintenance cost are extremely low.
Thriving manufacturing industries
Market analysts have given evidence that Brazil’s industry and tourism sectors are growing at a rapid pace. It is necessary that Foreign Investors seize the opportunity to make investment in real estate sector when the prices are low and get high return on their investments.