By Jewellord Singh, Contributing Reporter
RIO DE JANEIRO – Rio’s bid for to host the World Cup in 2014 and Olympics in 2016 has set the real estate industry into a boom. With prime locations Leblon, Ipanema and Copacabana experiencing continued transformation, foreigners and Brazilians alike are buying, often as vacation rental properties.
Vacation rental buyers, or individuals who invest in real estate properties to rent for most of the year, are taking mostly studio and one-bedroom apartments, followed by a growing demand to 2-bedroom homes.
Real estate agent Hakan Olsson of Rio Apartments explains, “The size of the property has a lot to do what the buyer enjoys themselves, many … invest in a property that they plan to have as their own home later on, or because they really like to stay in their own home during their vacation.”
Both Ipanema and Copacabana are unsurprisingly the areas of greatest interest, driven both by the buyers desire to live there, and the vacation rental market’s focus on these beach-side borrows. Olsson notes that, “Ipanema is more expensive then Copacabana and we can see some people comparing the areas and investing their money in Copacabana because of the cheaper value and many of them believe the increases in prices will be higher here then the neighbors Ipanema and Leblon.”
In terms of rental income, during the peak seasons around New Year’s and Carnival, apartments can be rented from R$200/day or around R$4,000/month for a studio, or more for weekly packages. While many owners may be tempted to come and visit during this time, business-minded investors will take advantage of the high rental demand.
Rio’s real estate market is well tuned for providing services to vacation home owners with options for a range of support. Choosing the right approach depends on one’s appetite for hands-on management, and ability to be available.
In response to a market demand, some agencies are given legal rights to perform day to day duties related to housing maintenance. For example, it can be difficult for a foreigner to open a bank account and most types of transactions to keep the house in good shape require this.
Hence, agents can pay for the bills, receive the rent payments, and fix the daily problems ranging from making sure there is hot water flowing to more complex tasks of setting up internet and keeping the whole house in one piece. In addition, since most short-term vacations require cleaning, the agent is helpful in setting up contracts with rental clients as well as handling the reservations and bookings.
The costs of this service may vary depending on the size and the periods of the rental. In general, vacation home owners can expect to pay as much as thirty percent (of the rent) for full services. Of course there are many smaller, private partners that can help in the process.