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Paraguayan Rental Properties - A Real Life Example

One of the numerous investment opportunities available in the Paraguayan Real Estate Market is the purchase of apartments for rent. This is a great way to get an initial taste of the Paraguayan market without committing to a large investment. Purchasing a property under construction is one of the most profitable ways to go about this type of investment. Depending on the state of construction, this could mean that there is a significant delay before you'll be able to realize income from the property, but the returns are greater. Let me run through the numbers of one real life example:


An investor purchased a small two-bedroom apartment (45m2) in one of the smaller cities on the edge of Asuncion for $41,000.-USD ($911 per m2). The apartment is presently rented out at $350.-USD per month. That's a gross return of 10% annually. The monthly expenses are $55 per month, and the annual property taxes total $38. The investor pays $35 monthly for property management. Value added tax for residential rentals in Paraguay is presently 5%, so $17 per month in this case. Rounding the numbers a bit, that means a net return of 7% annually.


This is just one example among many. To be clear, I am sharing these numbers with the express knowledge and permission of the investor. The key to investing in rental properties is to purchase properties that are in high demand. If you fall in love with a property and want to buy it, buy it for yourself, not necessarily to rent out. If you are looking for a property to rent out, search for the properties that the average person will love and can afford to rent.


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