Hi Guys,

Does anyone out there have any info to share on the viability of buying blocks of land in Rio and building small blocks of units on them?

I currently live in Australia with my Carioca wife, we are frequently in Rio visiting her family who mostly live in Zona Norte. On one of our recent trips I noticed that a neighbour of my sister in law's, was turning her single storey house into a block of what appeared to be eight units spread over two storeys. After a bit of research and talking to some of the locals, it is becoming apparent to me, that at least in this area, units are more desirable than free standing houses. The main reason for this seems to be security.
According to my somewhat educated estimates, a run down old house like the one that was being renovated, can be acquired for around 150 000 to 200 000 reais, whereas a reasonable two bed apartment goes for around 100 000 reais. With this in mind, it would seem quite lucrative, if you have the capital of course, to do what the neighbour was doing. The area in question is Cavalcanti, close to Madureira.

I don't really have much of a clue about construction costs in Brazil, but I do work in the industry here in Australia. Would it be safe to assume that costs would be considerably cheaper over there considering lower labour costs and lower standard of building - for example here in oz full brick homes are always double brick with cavity for external walls, whereas in Brazil I have only ever seen single brick external walls, even in "high quality" construction. It baffles me that they do not have more problems with moisture penetration...

We are thinking of moving to Brazil for a year or so to test the water, and maybe one of these type of projects.

I would very much appreciate your input.

Regards

Originally posted by joaozinho Would it be safe to assume that costs would be considerably cheaper over there considering lower labour costs and lower standard of building -

One would think that but it doesn't hold true for many other products; cars and furniture for example.
taxes, taxes, taxes ...

I'm not so sure about all of that. If you are disabled and buy a car tax free as you are entitled it will cost you 40-45% less, which pretty much corresponds to the price difference between BR and the USA.

Originally posted by sven Profit margin in Brazil is 30% on a new car. It's 5% in most of the rest of the world. Tax is only 26% or so. http://www.icarros.com.br/noticias/mercado/brasileiro-paga-26,4--de-imposto-no-carro-zero-/7322.html

That article is from 2009 when the IPI reduction/stimulus was at it's peak. And doesn't mention profit margin.




Edited by jacare - 18 September 2012 at 22:04

On the subject of cars, profit margins in Brazil is among the highest in the world (10%, versus 5% in Europe and less than 3% in the US). But as suggested in this thread, taxes represent the bigger chunk; 32% versus half lá fora.

http://oglobo.globo.com/economia/automovel-no-brasil-custa-ate-106-mais-que-la-fora-5928923

Edited by tbird - 06 October 2012 at 17:55