An investment tip from friends

Posted: December 10, 2012 in Investing
Tags: , , , , ,

Friends of mine here in Santiago are having a hard time finding an apartment. They say that first of all, what they do find ends up snatched up quickly. Everyone is buying and nobody is renting out. The rental market in Santiago is definitely a “seller’s market.” Furthermore, anything with parking or pet-friendly makes things even tougher. Part of this is due to very low interest rates on mortgages. Obviously lots of people can afford to take out a mortgage, but those who still wish to rent are a huge market looking for an outlet.

BassPlayerBob, one of said couple of friends, told me that if you buy an apartment here “en verde” (before construction) you save a significant amount. If one were to buy a cheap apartment, one would definitely have no problem renting it out for a decent return.

This pans out not only in Santiago, but in other regions like Rancagua where the growth rate is absurdly high due to mining expansion, and there are only a few apartment buildings in existence. One could say there is a critical housing shortage there.

 

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