Buying luxury properties in Rio de Janeiro as an investment

The city of Rio de Janeiro is one of the most famous in the world.
Known for its tropical climate, paradisiacal beaches, effervescent culture and wonderful natural beauty, in addition to the incredible tourist attractions – such as Cristo Redentor and Pão de Açúcar –, it is considered the biggest international destination in Brazil for being very attractive.

So, whether in the long or short term, the need for accommodation has grown and is one of the most profitable, both during the pandemic period and now with the end of it.

The significant increase in demand for real estate and the fact that prices have been stable for five years have become a sign of confidence and security for those who intend to invest in the luxury real estate market. An example of this was the sale of a penthouse still under construction in Leblon, in the amount of R$ 42 million, in June this year (2022).

It is not uncommon to come across foreigners who arrived in Rio de Janeiro and did not want to leave. And with the devaluation of the real, the luxury real estate sector has become even more attractive to international investors, especially those from Europe and the United States.
Or even Brazilians looking to invest in the richest part of the city.

Since, due to the health situation caused by COVID-19, there was a growth in the demand for larger, more airy properties with ample space to create a more pleasant and comfortable remote work environment. As a consequence, the notion of luxury has also evolved, which is now centered on the search for tranquility, connection with nature and exclusivity. Making Rio de Janeiro the perfect place.

Buying luxury real estate in Rio de Janeiro as an investment has proved to be an excellent alternative for Brazilians and foreigners in recent years. However, as mentioned above, for the investment to be profitable, it is always advisable to invest in a popular, developing and tourist area. Preferably in the vicinity of more active neighborhoods, close to public places such as restaurants, coffee shops and shopping centers.

Reasons to live in Rio de Janeiro

In addition to being one of the most popular tourist spots in Brazil and having famous beaches around the world, Rio de Janeiro is a key city when it comes to successful investment in the luxury real estate market, thanks to its exclusivity and intense culture.
We separate 5 reasons to live in Rio de Janeiro below:

1 - Natural beauties

Rio de Janeiro was indicated as one of the most beautiful places to visit in life, according to an article in the newspaper 'Telegraph', from England - and it's no wonder.
The natural beauties of the city are, without a doubt, unparalleled. The 'Pão de Açúcar' and Corcovado, with the statue of Cristo Redentor, are the best known. However, there are other attractions that make it worth living in Rio and enjoying other beauties, such as:

• Tijuca Forest — one of the largest urban forests in the world;
• Pedra da Gávea — perfect for hiking, climbing and paragliding;
• Praia da Barra — traditional for surfers (especially the 'pepê beach') and known for the practice of naturism, in the Reserve region.

2 - Weather

For those who like a warm and sunny climate, living in Rio de Janeiro is an excellent option. Ideal for beach and sea lovers, as the days are always hot, and the sky is blue most of the year.

3 - Leisure

Being a large urban center, the city of Rio de Janeiro offers a wide range of leisure options for its residents, including the beaches and nature of Rio de Janeiro. For those who love football, a sport that represents our country so much, there is the Maracanã. It also hosts concerts by great national and international artists, as it is the largest stadium in Brazil.

We can also mention the great venues, such as Vivo Rio and Circo Voador. Just like Rock in Rio, one of the biggest music festivals in the world.

4 – Nightlife

Rio's nightlife is another feature that attracts new residents annually. Neighborhoods like Tijuca – especially Varnhagem square –, Catete, Lapa and Botafogo, form an incredible set for those who like to go out with friends and have fun.

In addition, the Zona Sul neighborhood was recently elected as one of the 50 coolest neighborhoods in the world, according to the ranking published by the magazine ‘Time Out’, which specializes in travel and entertainment.

5 - Exclusivity

The rich part of the city, especially the South Zone, is known for its exclusivity. Many of the luxury properties are located in this area. There is a complete infrastructure, shopping and leisure centers, everything to offer quality of life for the residents.

As well as the proximity to nature, which is one of the main requirements when buying a luxury property, and accessibility to other parts of the city. Good neighborhoods are close to expressways, making it easy to move around without wasting too much time.

The best neighborhoods to invest in Rio de Janeiro

The neighborhoods of Rio de Janeiro, especially the high-end ones, are receiving properties that are increasingly sustainable and adapted to the demands of nature. These locations offer everything needed to have a good quality of life and comfort on a daily basis.

Check out which are the best neighborhoods to invest in the city:
1.    Leblon
2.    Ipanema
3.    Copacabana
4.    Gávea
5.    Tijuca

High profitability of real estate with platforms like Airbnb

For those who don't know, Airbnb is a seasonal rental platform, where you can make your property available to travelers, as an alternative to traditional hotels and inns. That is, you offer quality hosting in exchange for money.

Airbnb has become one of the most popular sites in the world among travelers, which indicates huge growth with travel after the pandemic. And luxury real estate tops the most sought after options for European and American tourists alike.

It is an alternative that benefits both guests and owners. Especially because the rent mediation is done directly between both parties, without the need for intermediation of companies or brokers, making the rental profit almost entirely of the owner – there is a small fee to be paid to the site.

Investing in luxury real estate in Rio de Janeiro and aggregating vacation rentals on sites like Airbnb, with above-average profit possibilities in the real estate market, brings you advantages such as security, ownership control and extra income.
As high-end houses have high maintenance costs, including condominium, IPTU, the idea is to reduce this cost while the lessor continues to use their home.

High profitability and liquidity

Buying luxury real estate in Rio de Janeiro as an investment brings long-term advantages, whether to live or rent – in season, as is the case with the Airbnb platform, which we mentioned in the topic above. The return on investment is high and makes this market one of the safest and least volatile at the moment, growing by 20% per year.

The real estate sector, especially luxury, was one of the few hits by the COVID-19 pandemic crisis. It has been growing over the years and sales follow the market. Even if the investment is high, the profitability will also be, since the appreciation will be proportional to what you (investor) paid for the property.

In addition, luxury properties in Rio de Janeiro have a large store of value and are liquid at the time of sale and purchase, as they do not lose over time.
Here are the main advantages of investing in luxury real estate in Rio:

1 - Valuation of the property

Mid-range real estate generally doesn't offer the same profitability as high-end real estate. Therefore, investing in luxury properties, even if the investment value is initially high, can bring a great return. Which will be worth it, as you will pay for the property only once and will have to return monthly.

What's more, luxury homeowners face fewer industry fluctuations and economic downturns. Because there is a constant demand in this branch, which provide differentials such as finishing, comfort and safety.

2 – Ease of leasing

Acquiring a luxury property to rent it out and increasing your monthly income is a great deal, as it is aimed at a very specific target audience. There are always buyers interested in the lease and the rate of return, as stated earlier, will be satisfactory.

3 - High added value

High-end properties feature differentiated constructions. Since the project, it is often done by qualified professionals in the luxury real estate market. With that in mind, this is one of the main reasons for the high valuation of these properties.

In addition to the details that enhance the luxury development, you also buy the entire infrastructure of the property. In other words, more than a project, you acquire design, exclusivity and comfort.

In conclusion, buying luxury real estate in Rio de Janeiro as an investment is one of the safest ways to guarantee and multiply your assets, for those who want to have high profits in the long term and with very low risks. You must assess the potential of the region, thus seeking excellent opportunities from a profitability and liquidity perspective.