Foreign investors in Brazil: why choosing the real estate segment?

Foreign investors have an attractive new modality to invest in Brazil and, in addition to constituting an interesting form of capital return, these characters gain the opportunity to reside in Brazil

This is one more possibility that the real estate market offers its investors, in addition, of course, to being a more profitable and safer option at this time of economic, political, and social instability that Brazil has been facing.

In this article, we will show you how this investment works and the main benefits it can provide to the investor. Read on!

Real estate segment for foreign investors

When it comes to the subject of investments, a huge range opens up. The Brazilian financial market offers a wide range of options for investors to study and assemble their best strategy to monetize their assets.

However, the coronavirus pandemic and the economic instabilities it has generated have frightened many investors around the world. But, even so, there is a segment that managed to recover quickly and is becoming an excellent option for those who want to protect their assets and even conquer the opportunity of having a permanent residence in Brazil.

Wherever we go in the big cities and in the interior we find new projects being built. What many don’t know is that most of them use real estate investment funds that raise funds from investors around the world.

Thus, there is a great opportunity for financial investment and capital return for foreign investors

Benefits of the real estate industry for foreign investors

Real estate provides some very interesting benefits, which we’ll mention in the next few topics. Keep reading!

Obtaining a residence permit in Brazil

There is a very interesting advantage for foreign investors who invest money in the Brazilian real estate market. We are dealing with the granting of a residence permit as a result of this type of investment.

This possibility was brought through Normative Resolution No. 36 of October 2018. This rule allowed migrants to guarantee residence permits in Brazil through the Brazilian real estate sector, contributing to the growth of this segment, which is so important to our economy.

For this to happen, the legislation establishes some conditions, namely:

  • acquisition of buildings already built or under construction and located in urban areas;
  • amounts over R$ 1,000,000.00.

In addition, it is important that individuals intend to invest with their own resources in projects that have great potential for generating employment and income. The minimum investment limit, however, is still subject to change.

For example, in properties located in the North and Northeast, this minimum amount drops to R$ 700,000.00, which is an incentive factor for investment in these regions, considering that the Southeast, South and Midwest have been the areas of greatest growth in this segment.

The period for the foreign investor to reside in Brazil is 2 years. However, he can apply for an indefinite extension. This authorization is extended to spouse or partner, parents, grandparents, grandchildren, children and siblings.

Safety

Another interesting benefit of investing in real estate — especially for foreign investors — is security. This segment is known for its stability and high appreciation expectations, which we will discuss in more detail in the next topic.

However, it is important to keep in mind that it is impossible to determine the profitability of an asset or real estate investment. After all, we are dealing with a variable income market and, as such, it involves risks.

What investors need to understand is that investing in real estate can be less risky, given that it is a very heated segment that belongs to the real economy. In other words, it is under the umbrella of the basic needs of people and companies. Therefore, it is more stable and secure than investment alternatives, but that does not mean that they are risk free.

Real estate valuation

Another important point to be mentioned is the valuation of these assets. Depending on your location, it is possible that the value will inflate a lot in a short period of time. This is very interesting for investors who want to buy a good to resell in the medium term at a higher price.

However, for this to happen, it is important to carefully analyze the growth expectations of a given region. After all, instead of appreciating, certain properties can suffer a devaluation depending on some factors over which the investor has no control.

Ease of purchase

Another important point is how easy it is to buy real estate. It is not difficult to find goods for sale in the regions of Brazil. This is another interesting benefit that foreign investors can obtain when investing in the Brazilian real estate market.

Source of Income

It is impossible not to mention that investing in real estate in Brazil is also an excellent source of income. It can happen with the rent of these assets or, even, with their sale after the asset’s appreciation.

Asset portfolio diversification

Finally, investing in real estate is also an excellent way to diversify an asset portfolio. If there is a consensus among financial market experts, it is that you should not leave all your capital in just one type of investment.

There is a maxim that says: never put all your eggs in a single basket, because if it falls all the eggs will be lost. This is also applied to the investment market, whether in real estate or financial assets traded by the Stock Exchange or banks

Therefore, the risk of a loss is also reduced, considering that the equity will be divided and any drops will not significantly affect the investor’s capital.

In addition to reducing risks, investment diversification also provides the opportunity to obtain differentiated returns. After all, each property can generate a different return, depending on a number of different factors.

If you are interested in obtaining a residence permit in Brazil through real estate investment, contact us.

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Especialista em Global Mobility