[Updated 2020] Latin America & South America Real Estate: Best Places To Invest

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Latin America real estate is a burgeoning industry that real estate investors would be foolish to ignore. Although investing in foreign real estate is subject to some adversities such as market risk, currency risk, and elevated fees, the benefits associated with the Latin America real estate market are extremely attractive. Foreign investors, for example, can enjoy less stringent tax requirements, asset diversification, and exchange rate advantages. Read on to learn about the advantages of investing in real estate in Latin America, as well as gain insights on what were the best Latin American countries to buy real estate in this past year.

How To Invest In Latin American & South American Real Estate

Investing in Latin American real estate has become increasingly accessible, especially with familiar national and multinational real estate service companies providing access to markets across Latin America. According to an interview with Latin America Real Estate Index co-founder and regional expert Jamie Anderson, there are three main differences between the U.S. and Latin American markets that investors should pay close attention to. First, the Latin American region is still considered to be in its early stages of the real estate cycle. The U.S. market is at a market cap of about 1 trillion dollars, while Latin America is at 75 billion dollars. From a growth and development standpoint, its profile can be compared to that of the U.S. in the early-to-mid-1980’s. There are about 150 publicly listed real estate companies trading almost 1 billion dollars’ worth of real estate deals weekly, and the market is just starting to heat up.

While the U.S. enjoys a diversified pool of investors, the global investing community remains relatively underexposed to local real estate opportunities in Latin America. Currently, the main investors in the region are companies, such as local pension funds or insurance companies. However, this is expected to change rapidly as foreign investors have started to flock south of American borders. One of the main attributes making Latin American real estate so attractive to investors right now is the yield rates it offers, relative to other markets. For example, in the U.S., the average yields range between 4 to 6 percent, compared to the wide 6 to 12 percent range in Latin America. For example, the Brazilian real estate market features high-interest rates yet very high yields. In Mexico, the Peso has taken a beating over the last few years, allowing foreign investors to advantage of the exchange rate.

Benefits Of Making A Latin American Real Estate Investment

In addition to some of the economic factors mentioned earlier, foreigners are flocking to Central and South America for practical reasons, making real estate investing all the more alluring. Here are the top benefits of investing in Latin American Real Estate:

  • Tropical beaches and warm weather will always create demand

  • Rich culture and dynamic economies will help markets grow

  • Relatively lower costs of living

  • Foreign investors offered many of the same protections as citizens

  • Relatively lower acquisition costs

First, the tropical beaches, warm weather, and rich cultures are undeniably attractive features of the various countries in the region. In addition, each nation has to offer a rich culture, a dynamic economy, adventure and experiences, and a different way of life that attracts tourists and expatriates. Generally, real estate investors will enjoy a lower cost of living, lower rents, and affordable healthcare, making real estate investing attractive. In addition, the dollar is strong in value compared to many Latin American countries, allowing for great real estate deals and comparatively cheaper salaries if any contractors or workers need to be hired. Finally, many markets in Latin America offer the same protections to foreign investors as they do to their own citizens.


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Top 8 Latin American Real Estate Markets 2020

Latin American real estate has provided savvy investors with unique opportunities for decades; however, there are several emerging markets that could make 2020 even more promising. A successful real estate deal hinges on a thorough market analysis—and buying property in Latin America is no different. Investors should take time to review potential markets (both the benefits and the potential challenges) before deciding on an area. Read through the following list of the best Latin American real estate markets of 2020 to get started:

  1. Mexico: Aside from the natural beauty, economic factors and population changes have made Mexico a popular destination for buy and hold investors. Investors can choose from several populous areas across the country for the perfect investment.

  2. Costa Rica: Similar to Mexico, Costa Rica has an abundance of natural beauties to admire offering a number of great real estate investment opportunities. From the populated San Jose to lush jungles and gorgeous beaches, Costa Rica is among the most popular real estate markets in Latin America.

  3. Panama: The entire country of Panama is full of opportunity for investors, though the capital (Panama City) is particularly attractive at the moment. Investors should also know that foreign investors benefit from the same property rights as local owners.

  4. Ecuador: A low cost of living and affordable real estate prices make Ecuador a popular destination for foreign investors. Buy and hold investors will find that these popular tourist destinations are not lacking short term renters.

  5. Uruguay: Uruguay is ranked first in Latin America for peace, democracy, and quality of living. The country is known for its high-income and wide range of real estate appeal for investors. This Latin American real estate market is competitive among European and North American investors for its stable long term investments and lifestyle comforts.

  6. Nicaragua: Nicaragua is known for its number of older and modern beachfront properties that offer enormous potential for foreign investors. From condos to cliffside homes, Nicaragua offers several options for real estate investors wanting to own property near the ocean in Latin America.

  7. Argentina: Buenos Aires has been a popular destination for real estate investors for years, and the market is showing no signs of slowing down. According to a study by Global Property Guide, smaller apartments have shown the highest rental yields. Investors should keep this in mind as they search for the perfect investment.

  8. Brazil: As the largest country and largest economy in South America it is no wonder Brazil made it onto the top real estate markets of 2020. This country has opportunities for those interested in commercial, residential and even raw land investing.

Top 4 Latin American Real Estate Markets 2018

The 2018 Latin American real estate market made great strides in order to catch up with the rest of the world’s leading markets.  Four markets, in particular, were responsible ushering in a new period of growth and prosperity for a market that has otherwise been held in check by political turmoil for far too long:

  1. Chile

  2. Colombia

  3. Peru

  4. Mexico

These four countries are at the forefront of a real estate movement that investors may not want to miss out on. Chile, for example, has done its best to attract foreign investors for quite some time. In doing so, the country passed Decree-Law 600, which entitles foreign investors to the same benefits of native citizens. As a result, U.S. investors interested in Chile real estate may be subject to lower tax rates, which make an already attractive market more interesting. Colombia, on the other hand, maintains a strong link to the United States, landing it at the top of the list for many U.S. investors. Not only that, but Colombia also boasts one of the region’s best corporate income tax rates—second only to Chile.

The biggest thing driving international real state, however, is the growing emphasis on a global economy. As the movement of capital across borders faces less artificial barriers, not unlike Chile’s Decree Law 600, the gap between U.S. real estate investors and promising marketplaces across the globe will shrink.

Top 9 Latin American Real Estate Markets 2017

Currently, the best Latin American countries to buy real estate are Colombia, the Dominican Republic, Mexico, Panama, Brazil, and Costa Rica. The top cities for real estate are Cali and Bogota, allowing Colombia to have a major moment.

  1. Cali, Colombia: US$896.97

  2. Bogotá, Colombia: US$1,671.13

  3. Las Terrenas, Dominican Republic: US$1336.18

  4. Playa del Carmen, Mexico: US$935.26

  5. Cocle, Panama: US$2106.46

  6. Ceara, Brazil: US$1698.56

  7. Panama City, Panama: US$1780.51

  8. San Jose, Costa Rica: US$823.05

  9. Santo Domingo, Dominican Republic: US$939.38

Cali boasts the most affordable property values on the list, with an average price of $896.97 per square meter. In addition, the city is one of the fastest-growing tourism centers in Colombia, leading to spikes in demand for tourist rentals. In addition, the U.S. dollar is extremely strong against the Colombian peso. Bogota is also a tourism hot spot in Latin America, and international travel to this destination is ever-increasing. The growing economy in Bogota is paralleled with an expanding middle class and neighborhood gentrification.

Las Terrenas in the Dominican Republic also offers affordable investment opportunities and is a beautiful beach destination. Tourists, both local and foreign, are attracted by its many water-related adventures and affordable prices. Playa del Carmen, Mexico, Cocle, Panama and Ceara, Brazil are also beautiful coastal communities, each offering unique advantages for investors. Playa del Carmen is the fastest-growing city in Latin America with high occupancy rates and high yields. Cocle in Panama has slightly is the most expensive on the list in terms of price per square meter, but is a growing agricultural hub offering cheap land prices. Brazil’s Ceara has good buy-and-hold real estate opportunities and is not completely dependent on foreign tourism.

Panama City, San Jose, and Santo Domingo are also forces to be reckoned with in the Latin America real estate panorama. Panama City still has strong yields and is forecasted to remain a buyer’s market through 2018, so investors considering this location should take action before conditions change. The Costa Rican economy continues to show stable growth, with a government that encourages foreign investment. Foreign real estate owners are entitled to the same protections as locals. If the Dominican Republic is your target, experts recommend focusing on the capital, Santo Domingo. Similar to Costa Rica, the Dominican has also experienced strong, steady growth with increasing foreign direct investment.

Best Latin American Countries To Buy Real Estate 2016

Latin America continues to prevail as a major destination for real estate investment and a new survey has revealed the top cities to buy in, in terms of affordability and investment.

A 2016 survey produced by Live and Invest Overseas outlined the top 17 cities in which to purchase real estate based on a configuration for a second home abroad or a retirement resident, as well as a rental property in most markets.

  1. Cali, Colombia: US$587

  2. Granada, Nicaragua: US$1,013

  3. Medellin, Colombia: US$1,119

  4. Arequipa, Peru: US$1,136

  5. Cuenca, Ecuador: US$1,199

  6. Asunción, Paraguay: US$1,224

  7. Puerto Vallarta, Mexico: US$1,273

  8. Montevideo Centro, Uruguay: US$1,567

  9. Bogotá, Colombia: US$1,759

  10. Santa Maria, Colombia: US$1,759

  11. Mendoza, Argentina: US$1,868

  12. San Jose, Costa Rica: US$2,293

  13. Panama City, Panama: US$2,300

  14. Santiago, Chile: US$2,492

  15. Buenos Aires, Argentina: US$2,660

  16. Cartagena, Colombia: US$2,676

  17. San Miguel de Allende, Mexico: US$2,736

“A strong dollar coupled with expanding middle classes in some markets and windows of crisis opportunity in others make this the best time in a decade to diversify into foreign real estate, specifically in Latin America”, said Katheleen Peddicord, the survey’s author.

In terms of the most affordable on a per-square-meter basis, Cali, Colombia is considered the number one city in Latin America for real estate investment. “Cali offers diverse lifestyle options, from high-end gated communities in a country setting to lively downtown neighborhoods. The climate is warm but not uncomfortable, and residents have good options for dining and nightlife. Also, this is a walkable city, meaning you could live here without investing in a car, a plus for the retiree or second homeowner overseas,” Peddicord said.

The survey compared the prices of a two-bedroom, two-bath apartment in good condition and location in the top 20 Latin American markets, with a minimum of 10  apartments in each area surveyed to obtain an average. According to Peddicord, the best way to achieve an “apples-to-apples comparison” among different markets is property cost per square meter.

Factors considered in the survey for investment included the strength of the local economy, the rate of foreign investment, the diversity of the pool of buyers from the eventful resale, the opportunity for rental yield, recent and planned infrastructure improvement, and price.

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Summary

An examination of Latin America real estate markets should, if anything, show that the region boasts a large number of dynamic economies and rich culture. There are numerous factors for real estate investors to benefit from, including the potential protections offered to foreign citizens. If you are interested in real estate investments abroad, or perhaps already located in the region, the above markets should serve as a great jumping-off point. Investors of all skill levels would be wise to keep an eye on this burgeoning region.

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