Investment Property in Chile

Investment Overview

Chile

South America offers potential property buyers a range of different countries, cultures, economies and property markets to buy into. Among these, investment property in Chile is undoubtedly a strong contender. Chile has possibly the strongest economy of any Latin American country, a reputation as a stable and secure country, and low levels of corruption. However, it still offers the same stunning beaches, Latin culture, low costs of living and property, growing tourism and strong potential for rental yields and capital growth as its neighbours. Chile’s stable political situation and investment–friendly climate means that an investment property in Chile provides buyers with an added degree of security, in addition to a potentially lucrative investment.

Growth in tourism

Chile is receiving an increasing number of visitors, in particular international tourists and long–haul travellers, though the country’s tourism sector has also seen an increase in domestic demand. The future of the industry looks promising, and the World Travel and Tourism Council (WTTC) predicts that the industry will grow rapidly at an average 6.3% per year for the next ten years. This, in turn, boosts the popularity and price of investment property in Chile as rental potential increases.

Property Market

The Chilean government encourages foreign investment, and the process for foreign buyers – individual or corporate – to purchase real estate in Chile is relatively straightforward. There are no restrictions on the basis of nationality and investors have the peace of mind that property rights in the country are strongly protected by law. Chile has a large domestic market for rentals and resales, to the extent that developers in the country do not need to depend on foreign buyers, as there will always be local demand.

Rental yields

The market for rental property in Chile is relatively limited, and competitive. Investors can expect a yield of between 6.5% and 7.5% for city apartments, against between 6% and 8% for houses in main coastal resorts, and up to 9.5% for a larger property (in the region of 300m2).

First–time buyers

Property in Chile has also come into demand among first–time buyers, for whom the country often represents a cheaper alternative to their home country. Chile is an emerging market with the potential for strong economic growth, so the opportunities for capital growth and rental returns are there, together with an economic stability which many emerging markets cannot compete with.

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