Interested in buying real estate in South America? Read our guide for facts and info that will help you make the right decision when investing in Chilean real estate…
There is no doubt about the fact that Chile has some of the best real estate investment opportunities in South America. However buying real estate in South America can be a little tricky. There are a number of things that you need to take into consideration when looking to make a profitable investment in house or property in Chile.
In order to determine the true value of a real estate bargain you need to calculate the value of the property independent of the structure of the house. It is important to do this in Chile because the construction of the house may be more than double the amount of the actual value of the property. In many cases you would be better off in buying land and constructing your own home at a much cheaper cost.
However the trends may be otherwise in different places. This trend is maintained in areas that are situated away from the metropolitan city centers, basically the areas closer to the rural regions of Southern Chile in particular.
Ideally you should be looking for an empty lot in the area of your choice. This will give you an idea of what the land would cost over which you can estimate the value of constructing the home.
Finding out the price of the land on its own gives you a better idea of the value of the area. It is important for interested individuals to know that the social histories of the region have created a weird inertia where you will find two similar sized lots with similar structures at alarmingly different rates in different areas. The difference in rates can go up to five times the value of one as compared to the other. The social perception of the class status plays a big role in determining the value of real estate in Chile. The areas with low land prices are not necessarily rough neighborhoods, it is truly just a matter of perception but it goes a long way in determining the value of land.
Foreigners are gullible to fall into tourist traps set by the local real estate market. Property in areas that are frequented by tourists tends to be higher than normal. However there is one thing that works to the benefit of the foreigner looking to invest in real estate in South America. This is the fact that the Chileans are very rigid about their social perceptions. This means that tourists may find the ideal real estate in the ideal neighborhood at a considerably lower price while properties that are worthless to the foreign investor are priced high.
An example of this kind of situation would be Los Condes in Santiago. This region is considered to be one of the most posh areas to live by the Chileans. This is especially true for the estates situated on the mountain sides. However this area experiences heavy pollution and smog blinding the so called beautiful view of the city. Despite the fact that this region does not even provide you with clean air to breathe, it has some of the most expensive property in Chile. With these factors in mind the investor will be able to make a much better decision in the promising real estate market of South America.