Investing in Asuncion Real Estate in Paraguay - an ROI case study with numbers
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- Опубликовано: 11 июл 2024
- My real estate buyer's agent in Paraguay showed me an apartment for sale in Asuncion with rooftop pool and all amenities. We ran all the ROI numbers to get to a realistic return on investment / rental yield/ capitalization rate. This video was shot before the Argentine elections.
***Typo in my numbers for water. It should be $120, not $1200. Sorry. The net yield is a still low 3.8%.
🇵🇾 More information on Aleksandr's real estate buyer's agent services in Asuncion, Paraguay: thewanderinginvestor.com/serv...
🇵🇾 Full analysis of the real estate market in Asuncion, Paraguay: thewanderinginvestor.com/inte...
🇵🇾 More information on Paraguay residency and contact Aleksandr: thewanderinginvestor.com/serv...
00:00 Introduction
00:50 Viewing on condo in Asuncion
04:30 Short term letting or long term letting in Asuncion?
06:45 Is Airbnb a good investment in Asuncion?
08:00 Rental yield and cap rate and ROI for real estate in Asuncion, Paraguay
12:10 Liquidity in the real estate market in Asuncion, Paraguay
14:00 Who is buying real estate in Paraguay?
15:30 Why do foreigners buy real estate in Asuncion, Paraguay?
19:00 Why are people moving to Paraguay?
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No part whatsoever of the discussion and presentation is, or should be considered as, investment advice, financial advice, legal advice, or tax advice. Always do proper due diligence and speak to a qualified professional advisor in your jurisdiction. Also, be advised that Ladislas Maurice and The Wandering Investor staff may own real estate or investments in the specific markets or opportunities that are discussed. The Wandering Investor may also have marketing agreements in place with certain opportunities that are mentioned.
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🇵🇾 More information on Aleksandr's real estate buyer's agent services in Asuncion, Paraguay: thewanderinginvestor.com/services/international-real-estate-services/my-real-estate-buyers-agent-in-asuncion-paraguay/
🇵🇾 Full analysis of the real estate market in Asuncion, Paraguay: thewanderinginvestor.com/international-real-estate/paraguay-asuncion-real-estate-market-investment-guide/
🇵🇾 More information on Paraguay residency and contact Aleksandr: thewanderinginvestor.com/services/residency-and-citizenship-by-investment/how-to-obtain-residency-in-paraguay/
As a Paraguayan, I can say that this guy did a good job studying the Paraguayan economy. I would add that money laundering is a big thing here in Paraguay, which is why you can see many new empty buildings, gas stations on every corner, pharmacies, all over Asunción.
Good point. Thank you.
Do you have an idea of land prices in other areas of Paraguay. I'd like to know what a decent sized lot (at least 5000m2) for a homestead would be.
EN PANAMA HAY MUCHOS EDIFICIOS VACIOS TAMBIEN... ¡¡¡¿¿EL LAVADO DE DINERO NO ES ESCLUSIVO DEL PARAGUAY!!!!!!
I am Paraguayan, thank you very much for the contribution, I enjoyed reading the article and watching the video.
I am also a german that imigrated to Paraguay a few years ago and can confirm that all the information said here are correct! Good video!
Thank you 🙏
Been waiting on the Paraguay real estate video since Feb. 2023, finally here !!!!
and what's your take on the video?
As a foreigner living in Paraguay, this is a giant BS. Those numbers are all exaggerated and the market is way more smaller than they said. The only truth that I can save from their conversation is that Paraguay is neither a touristic country nor a buissness hub. It's seem to me that this is a complete scam to launder the money of the drugs lords. There is no ROI in this investment 😅😅😅
As a developer and buyer of these sort of apartments in Paraguay I can assure you everything that has been said in this video is true. One thing that you could have mentioned is buying these sort of properties "al pozo" which is buying from the start of the development of the building. In this case you can pay in installments and cheaper than when the building is finished. I develop duplexs and buy apartments to diversify my portfolio and to keep up with inflation. Not realy to make money quickly. Nice video guys.
And when the developer take your money and disappears? There are a lot of cases that people baught with this modality and lost all their savings. "comprar en pozo" it's usually a scam there are neither regulation or law that protect the buyer of this modality.
@xangelu yes, definitely there's a lot of cases of scam. Therefore it is really important to investigate the group that is developing the project.
A couple of things worth mentioning: prices are very negotiable, water is usually included in HOA expenses, and you can rent to foreigners by hiring a guarantor service (Alucerto)
The numbers and the whole social situation are pretty accurate.. i can tell as a local resident. So really good analysis!
Fantastic analysis!
There are many brazilians getting their second residence in Paraguay for safety. I can imagine Argentinians doing the same.
Another point I saw in Paraguay was the influx of brazilian students. There were many universities made just for brazilians to study medicine. I also imagine that a property targeting this demographic could give a safe return
Brilliant video! Thank you!
Another great video, very engaging
Thank you 🙏
Excellent work. Subscribed.
Excellent, thank you!
That apartment should be around 80k IMO. 140k doesn't make sense.
Very useful video! I lived right next to that condo for a while few years back. Very nice location.
Good video. One thing I suggest people consider when investing in Paraguay Real Estate - thoroughly assess the build quality. Incidental/ongoing costs and an increased need for 'maintenance can feature in buildings that have not been well designed and built. I'm not saying this is all buildings in Paraguay but it can be an issue.
90% of occupancy is a very optimistic number. I have been living here for many months, lived in many apartments and I can say that most of them weren't rented for some time. I also heard stories about people who could rent their apartment for many months...
Agreed. There are dozens and dozens of buildings being built, with many of the already built buildings sitting mostly if not completely empty. With the minimum wage being close to $350 USD there are only a small number of potential renters in-country year round. Money laundering is a HUGE issue here. The people making the apartment buildings aren't interested in making fast or stable money, but are interested in finding a legal avenue to convert their illegitimate money into legal capital. People buying property or renting these luxury apartments in Paraguay aren't well-to-do, they are doing so to escape somewhere else. This isn't an investment market for rental income.
Great video and good and safe diversification from Europe
Me too,finslly a video on paraguay property ,please do more ,much appreciation
Very honest appraisal. Issue is today that their are so many high yielding opportunities with less risk and better prospects hard to see any real business case unless you want to be specifically in Paraguay.
mistake the water is $10 per month $120 per year not $1200
Yes, thank you. Typo in formula. Net yield goes up to 3.8%
Travelling all the way to Paraguay to buy a property at 140K! Sounds crazy
Good to know the full story like this but the country or at least the capital not a property investment location - at best a wealth preservation and backup plan for regional countries/individuals
Yes. Probably not a bad long term play either for patient capital.
Very helpful
It’s illiquid bc supply exceeds demand. Price is not according local standards.
Can you tell me how much the rent is for a 54 m2 two bed apartment? And what would be an appropriate purchase price? San Roque district. With balcony, no parking space, no pool. New building. That would be very nice.
@@Colette_45 The appropriate price would be the one that gets the property sold in a reasonable timeframe. I happen to think 3 years to sell a property is not convenient for any investor who might need to recover their money for some emergency. If we discount the opportunity cost of the money being held up during the time the property is on the market… Now we got a problem. Look if someone wants to live there long term that’s fine but let’s not try to say the real estate market is not overpriced when it is. I’m guessing developers are bagging an insane margin.
That was exactly my thought, it is not good when you overpay and there is no much liquidity.
@@nomadinvesterThank you for your assessment .
Don’t like living in apartments and if they are hard to sell and there’s a limited supply of clientele to rent to what’s the point?
really well sayed... the market is slow, most rents u find are around 200usd and with that monthly, you aint paying it of in 40 years...
Very interesting. I am English and live in Las Mercedes Asunción. Which is after seven years of living here, i wouldn'tleave. I work remotely and would never consider moving back to London. I hope you reply to a very honest view of Asunción.
The reason I was looking at an airbnb was to have short term rentals and be able to use the place for myself and friends/family. From what you're saying then, stick to buying a place near the airport and downtown near the immigration places people will need to visit.
This article will be helpful: thewanderinginvestor.com/international-real-estate/paraguay-asuncion-real-estate-market-investment-guide/
Asuncion is a nice place to visit but wouldn’t live there. You’ve probably heard that before. I’m born and raised in NYC and I don’t even want to live here at my age. Now for me if you travel about 30-1hour from Asuncion is the place I’d be interested in. How do I know? I’ve been to PY many times and have been married to a Paraguayan for 35 years. That’s my connection to PY
$140k for 80 sq meters -> $1750 / sq mt seems a bit high for this part of Asuncion, no? Or have prices gone up since I last checked? If I could get something like this for $100k, maybe that would make more sense. Do you think that would be realistic? Or, if this apartment was $140k and in the nice area that borders both Recoleta and Villa Morra, then that could be interesting since it could bring in AirBnB revenue. Do you have a sense of what the ROI on that would look like?
Something similar. There is barely any Airbnb demand for now.
My thoughts exactly, I'd pay 100k for this.
Yeah, overpriced
This does not seem like a good investment whatsoever. The base price of the apartment is very high for very simple construction, $800 income on $150,000 investment when there is property tax, maintenance, insurance, water, HOA. Hard pass,
You need to adjust your calc since you estimated 1.2k yearly water expenses while in reality is 120 dollars. Also the maintenance Factor is not needed until much later after a couple of years of usage. The property management is a one off of 10% once you sign the lease, so you do not get charged the upcoming years.
Can you do a video about the real estate market in Panama?
Will be published in a few weeks
@@TheWanderingInvestor really appreciate the work you do. Your previous Panama videos were really helpful to me as well.
I had to come here for the price too painful skipping through trying to see where its mentioned haha
Beautiful green area with lovely homes; however, plopping that apartment building in this area ruins the beauty of the area. Neighbors must be very bummed to have this eyesore.
Yes. Imagine the house next door with a constant shadow now.
@@TheWanderingInvestor Or the home with the pool which now has people looking down at them. :-(
@@TheWanderingInvestor Shadow is considered an advantage in Asu. 😅
Agreed, sad that the building looks over private homes gardens and pool areas
Rents are cheap here in Paraguay even airbnb. No reason to tie up capital here. Also it's hot 104 f here today.
Yes. Amazing Airbnbs for cheap.
104??? I thought it wasn't like that down in the continent! Is it humid?? Or desert dry,?
@@dovygoodguy1296Alta humidad. 😂 It's brutal. 🥵
@@Colette_45 How is there humidity in a city far from the ocean??
That's no different than San Antonio, TX temperature wise. :)
If Argentina enters economic troubles in a deflationary sense like a real loss of purchasing powerdue to recession/usd transition or whatever I think they would be buying a lot less apartments in ASU. Don't you think this would bring the prices down? I think they are a bit overheated now mostly due to Argie demand of previous years.
BA now: volume increasing but prices not yet. Will probably happen in the coming months. Prices are down 30% from peak. Instability in Argentina = money flowing to Paraguay
@@TheWanderingInvestorPrices are starting to increase in BsAs. It is still very cheap and many interesting opportunities can be found.
I notice in the above calculation there no Income tax on renting it out. Isn't that 10% of gross income needed to add into costs? @@TheWanderingInvestor
@@k.m.370 Yes. I don’t mention taxes because for some people it matters, while for others it doesn’t based on where they are tax residents.
Overheated market planty of buildings are totally empty
The problem with those apartments is that they're sadly too expensive and way out of the price range for most locals.
Do you know what is the tax like for U.S. citizens? Do they tax overseas dividend or capital gains on stocks?
Paraguay doesn’t tax such overseas income. But Uncle Sam will no matter where you live.
As a matter of curiosity, how can you compare the net yield you get here with the net yield in big cities in US and UK?
Probably relatively similar actually.
But second tier UK and US coties would be better for yield
@@TheWanderingInvestor second tier? Interesting point
I think it's costly for 140k
The kitchen is like a narrow long hallway and hardly any furniture in it. I rather live in the countryside and earn interest on my money.
How do Paraguay and Uruguay compare to each other in these main subjects? Unlike Uruguay, Paraguay is landlocked. Does that make any difference?
Prices are much more expensive in Uruguay and you can expect gross yields of about 3%. Safe haven status.
@@TheWanderingInvestor Are there negative effects of Paraguay being landlocked??
@@dovygoodguy1296 logistics costs, dependent on other countries for ports, etc
I think there is a mistake on the annual water cost...
Yes. Thank you. Typo in my formula. The actual yield would be 3.8%. Still unappealing though a bit better.
If I want to invest in real estate only for renting out what is the ROI annual?
This case study is literally about this
You get a better ROI in a HYSA or investing in a REIT in the US or Singapore.
Yes
You would be a fool to invest in one of these cardboard apartments. You really need to see the quality. It is really bad. The kitchen cupboards are made with 12mm ply which expands and needs replacing within a few years due to the heat. You cannot hang anything on the walls or put in a screw, nail, etc because it will fall off. The noise and light pollution do not make for a pleasant stay. You can hear your neighbours and the roads around the place are always busy. It would cost no more than $5k to build one of these places. The area is great. They all look good in the first few months, but take a look in 5 years and the place is filthy and falling apart because the paraguan way is not to maintain anything in the real sense of the word. If it comes with a parking space, you better not be driving a big car. I could go on, but i would advise you to put your money elsewhere.
I have a friend that purchased a recently finished apartment and it had TONS of issues, including a ill fitting window in the living room. Getting it fixed was also a huge pain because the Paraguayan culture is very relaxed and problem solving isn't a major priority. In the house I'm renting (supposedly a luxury home) all the wood warps leading to doors that cannot close properly and mildew and mild growing on the ceilings in the bathrooms. I cannot speak about the initial quality of the build of the apartments, but I definitely question how long they will last. If my house is any indication I believe the apartments won't stay as luxurious for too long.
Que es el nombre de edificio y en que calle
Can you be citizen if you buy a apartment of 70.000 ?
No
You get permanent residency for 70k investment and then have to stay some years a certain time in the country, then you can get citizenship.
@@WolfF2022 Yes. They expect you to actually live there and create ties. It’s not easy
I would like to set up a cattle ranch is that possible
Yes
So expensive
11:46 You made a mistake in your calculations. Water should be 10 x 12 = 120, not 1200.
Yes. Thank you. Added it to the description. Net yield is now 3.8%.
$140,000 for 80 square meters? A little high for being in Los Laureles. So maybe a price for a foreigner. $800 a month rent? Nonsense
you had the water at $1200 but it should have been $120 per year
Yes. Typo. Thank you. Net yield would be a still low 3.8%
Yes. Thank you. Typo in my formula. The net yield increases to a still low 3.8%
@@TheWanderingInvestor I did not think that it changed the overall message that you provided. Good content as usual.
Hello friend Maurice!
I would like to schedule a personal appointment.
There's one thing that made me run away from visiting Paraguay, it's because people can buy weapons there.
Weapons are not prohibited! Doesn't that make the place dangerous?
It’s safe in Paraguay. Guns are not an issue. Consulting sessions can be booked here, I’d be happy to help: thewanderinginvestor.com/internationalization-and-diversification-consulting/
Paraguay is the safest country in latin America because of terere they drink all the time. A lot of weapons there made in Israel
It is the same thing as in China. People invest and speculate with buildings because they do have some spare money. Be it money from drug traffic, corruption, stealing from the governement, etc.. How else one would be able to afford such an nice condo like that. The average person not. It is increasingly expensive to build a house. So only if you are a politician (corruption, bribes, extorsions) or do a little local drugs as an small drug lord, you are able to even build such an nice flat. Hence the whooping 1000$ they are asking. Just insane.
However the buildings are normally built well and are not these chinese tofu bread garbage buildings you see falling down in China. People here make sure the building is built solid for their stolen money.
Or do you think these latinparaguayans are such competent businessmen to get to such riches? I do not see any Jeff Bezos in Paraguay but mostly financed themselves with drug trafficking like here and there 100 Kg in an small plane like a Cessna and fly that to the brazilian border and such. From those people you are renting there.
It is drug money laundered and invested in something legal like this very nice condo.
Aleksandr is an polish, russian, ukranian or eastern Europe name. Most likely east european mafia moved in already. That guy has obviously contact to capo politicians who own that beautifull flat. That is an investment for the croockies of the country to show to their buddies. They charge most likely for renting it out for private alkohol and prostitution parties for such political acquaintances. Rest assured the average german immigrant will never be able to afford to rent that flat. Thats why these flats and weekend houses stay mostly empty all life long.
I have an old rent house which I rent for around 120 USD. So there you have an idea.
Awesome video! Am looking to establish in Paraguay and need someone to help me settled (buy a property). Any chance to introduce me to your partner?
Thank you. Aleksandr can help: thewanderinginvestor.com/services/international-real-estate-services/my-real-estate-buyers-agent-in-asuncion-paraguay/
I went to Asuncion specifically to invest in real estate. Never found anything worth buying
Yeah. It’s a long term game. Nothing immediately exciting.
There isn't enough there to buy. Really, it needs new things built to make it more vital.
@@samchen2133 There is enough to Buy. However, nobody is renting. Everyone lives with their family until 50 years old.
It looks like Alexander speaks German himself, correct?
No. Russian.
@@TheWanderingInvestor I see. Good. Thank you,
@@jgonz260thick slavic accent
@@TheWanderingInvestor I knew it. Disguised Bratva - russian mafia buddy. In order to be the Vertrauensmann of obviously a politicians or mafiosi rental unit you need to be in the same Milieu like these crooks themselves. Definately Bratva.
Argentina is not a perpetual mess like you say, the new president is a libertarian and is getting rid of taxes. The locals are in similar situation as the locals in Paraguay but at least things will change for the better in the coming years
Argentina is a 💩 place. Monkey president pledging allegiance to Israel and declaring war on 1/2 the country is another basket case study of being on the wrong side of history. With Argentina’s history, nothing new, just another lunatic dictator licking the elites boots while pretending to care about his citizens.
Argentina still does blue dollar?
i would not touch this apt for more than 100 k usd
I like Paraguay because they don't drink the gringo koolaid.
Wayyyyyyy overpriced for this shoebox. This is equivalent to buying a $2mill house in Dubai when factoring in PPP. No thanks
Your number are wrong Water are 120 per year .. not 1,200 dollars !! @TheWanderingInvestor
Yes. This has been fixed in the description.