My Personal Buying Strategy

One of the questions that came up after my last blog post was how did I choose and acquire the properties that I now own in Paraguay. I presently own 5 properties in Paraguay, and they can best be divided into three categories: to live, to hold, and to rent. Allow me to explain my thinking with each of the three categories.

To Live

When I was first moving to Paraguay, I knew that I needed a property in Asuncion for my residence. Renting was an option, but if you have sufficient cash available, it is far more cost-effective to buy something in Asuncion because the purchase prices are still quite competitive while rental rates are quite high in relation to local wages. My priorities were space, location, and a swimming pool. One would think the final requirement is a simple "either the property has a pool or it doesn't," but the reality is that if you want to actually swim in a pool, the search is more complicated in Asuncion. The vast majority of apartment buildings and even houses in Asuncion that feature swimming pools really just have plunge pools, nothing actually swimmable. In the end, this would be the deciding factor in my purchase.

I found (with the help of my real estate agent) an almost brand new apartment in a quiet, safe, and convenient neighborhood that featured a small-but-functional rooftop lap pool. There were several other options of similar quality available, but they were all either under construction still or with a glorified bath tub instead of a pool. I purchased directly from the developer at a price that was higher than I expected but below other apartments available in the same building. The building has only 16 apartments, and I've been very happy with my new home.

To Hold

My second property purchase was within my original goals for the move to Paraguay as well; I wanted a property in the countryside as a future vacation spot. Land in the interior of Paraguay varies greatly depending on location and how realistic the sellers are. I considered properties further from the city that were quite affordable, but I knew that realistically, I wouldn't properly take advantage of the land if it was located more than an hour outside Asuncion. This helped narrow my search a bit.

With the help of another agent from the office, I came across one hectare (2 acres) of land in Atyra, a quiet and clean town about an hour outside Asuncion, and I fell in love with it on the first visit. Again, I could have acquired similar property at a lower price, but this one checked all the boxes for me, and it was still a fair price. It's not a property that is likely to increase in value significantly any time soon, but my intent was not a property to flip, rather one to hold on to longterm and eventually build a house.

To Rent

The last category is probably the most interesting for many of you - the properties that I bought as an investment to rent out. I currently have two rental properties already in use, and a third that is still under construction. Two of the three I purchased directly from the developers at under-construction prices. I became aware of the properties when they were listed by agents in the office, and the first I got to know during various site inspections during construction before I made the decision to purchase.

The first property is a small two-bedroom apartment just outside of Asuncion and convenient to one of the largest medical schools in the area. With the new Costanera that has been constructed along the river, you can reach the center of Asuncion in about 15 minutes, so even for those that don't work or study nearby, it's still a good location. One of the most important factors is that I can offer the apartment at a price that is accessible for the right audience and still earn a solid return.

The third rental property I bought is still under construction, but I wanted to go ahead and mention it since it is actually very similar to the first apartment. It's a small two-bedroom, but this time located very close to the historic center of Asuncion, an area that is home to many of the government offices. The building has very accessible pricing for the young professionals working in the public or private sector, so I anticipate that it will be easy to rent and eventually re-sell. The building has limited parking, so I also took the opportunity to invest in two parking spaces. This increases the rental value of the property and introduces the possibility to rent out the second parking space separately.

My other rental property is a studio apartment in one of the historic neighborhoods in high-demand thanks to the number of bars and restaurants in the area. In contrast to the other two examples, this apartment is smaller but offers amenities like a rooftop pool and terrace. I paid more for this apartment, but thanks to its location and amenities, it easily rents out for more than the two-bedroom apartment, so the returns are still quite good. I stumbled across this apartment when I was about to close on a different apartment in a different building, but the seller tried to change the price at the last minute. He lost a sale thanks to his greed and bad attitude, but my agent still was able to close a transaction by finding me this excellent property the same day.

My tips for property searches in Paraguay:

• Work with a trusted agent that knows the area, the market, the available properties, and how to listen to your needs and requests.

• When buying properties for investment, buy what the market is looking for, not just properties you personally like.

• Consider buying under-construction to get a better price. This increases the chance of a solid return at resale.

• Calculate estimated returns based on the advice of your real estate agent, not the developers. Agents know the reality of the market, and not all developers are realistic when coming up with their numbers.