
While year-round rental income isn't assured, Punta del Este real estate can still be a good investment anchor.
Over the past eighteen months, foreign buyers closed over $1.5 billion in real estate transactions in Uruguay with $700 million of those deals taking place in the balneario playground of Punta del Este; an impressive number for a town with a year-round population of only 7,300.
Yet, considering high season is limited to January, February and a few major holidays during the shoulder months, El Pais says buying real estate in Punta de Este isn’t for small investors looking for year-round rental income.
“Today, we are net sellers of properties in Punta del Este,” says Mariano Sardans, CEO of wealth management firm FDI Gerenciamiento Patrimonial, “When the profitability begins to turn negative, the people who originally bought looking for rental income begin to sell.” And, Sardans notes, those who never bought in the first place may be looking for opportunities in the U.S. and Europe, now that real estate prices there have fallen sharply in the wake of the global financial crisis.
Still, Punta del Este remains an attractive alternative for small investors who want an investment anchor, says Francisco Bistiancic, president of the Maldonado Real Estate Chamber. “There are people who don’t want to lose money and don’t expect to generate 10% rental income per year. With this type of investment, the small buyer has the assurance that no bank is going to freeze his assets and that his money won’t lose its value due to currency fluctuations. And he takes advantage of the opportunity to be able to enjoy his purchase during the summer months.” (Full Story in Spanish)
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