RIO DE JANEIRO, BRAZIL — Despite a biannual wage boost that can barely keep pace with the country's spiraling inflation, Brazilians manage to put on a happy face.
They communicate a refreshing vitality and optimism that is most apparent in this seaport city, where spurts of growth and urban expansion provide tempting opportunities for foreign investors.
Few may be prepared to buy developer Antonio Galdeano's $20-million mountain property with a sweeping view of Rio's coastline but, on the whole, they are finding real estate bargains in that city tempting.
Brazilian law began easing up on property ownership by foreigners some four years ago and gives them the same protection and guarantees that it gives to Brazilian nationals. Restrictions apply basically to the purchase of undeveloped open land along frontiers or the seashore.
"A foreigner may own property here, in his own name. He is taxed only on capital gains, and is allowed to take profits out of the country," explained Victor Jessula, director of sales of the prestigious brokerage firm of Julio Bogoricin (with headquarters in Rio and offices in New York).
"Traditionally, the most enthusiastic foreign real estate investors have been the Argentinians followed closely by Canadians. Americans currently buying in Rio are predominantly older couples who visited Rio in the past, fell in love with the city, and have returned frequently for one- or two-month stays," Jessula said.
"Some buy in the beach areas, others prefer the cooler mountain resorts. Investment in the prime beach areas is most desirable because space there is at a premium and rentals are always in demand. Factors affecting the increasing value of beach properties in Copacabana, Ipanema and Leblon are: scarcity of remaining buildable sites and increased costs of new construction."
"We now have four or five apartment buildings in Copacabana and Ipanema where each unit, with approximately 7,350 square feet, sells for about $1 million," he added. "These are the newest and most luxurious along the beach front, and are comparable to the best, at any price, in any major metropolis of the world.
"A good purchase option is the 'aparthotel' unit with one or two bedrooms that can be bought for $35,000, with concierge, maid and other services included in a homeowner's association fee. These units may be purchased and subleased, an ideal situation for Brazilians or foreigners who only vacation in Rio," Jessula said.
There are also charming secluded shoreline resorts in the outskirts of Rio, Jessula commented. "For under $100,000, one can own a small apartment in the city and a weekend retreat as well."
Marina Porto Buzios, a multi-phase project, is currently under development by Umberto Modiano, an affluent coffee exporter turned builder/developer, in the outskirts of the city, only 20 minutes from Rio by plane or some two hours by car. Already completed is the marina's five-pronged canal system, a lagoon, a bridge, demarcation of lots and clubhouse sites.
Buzios, the closest community to Modiano's new marina and hotel development, was an old fisherman's village that mushroomed into the Brazilian "St. Tropez" after Brigitte Bardot feel in love with the area and built a home there.
The French actress has since left Buzios, but its reputed charm has spread far and today it is a posh little colony inhabited by artists, a favorite playground of the jet set and a haven for boutique and restaurant owners.
"I used to come to Buzios like everyone else, because it was a beautiful place in which to have fun, relax after a busy week. And I came so often that I finally decided to invest here," Modiano explained.
Modiano acquired an island, Ilha Rasa, directly facing the marina on which he has built the Posada nas Rocas, a hotel resort currently in operation, that serves both as a destination or stopover for visiting boats.
It is the island's single project, consisting of 40 bungalows (with an additional 20 under construction, each with veranda and hammock) and common areas with a swimming pool, main dining hall, bar and terraces, and special areas for entertainment and refreshments.
Modiano credits son Claudio with Posada nas Rocas' design and overall plan. "We want to preserve it as the small paradise that it is, in a rustic motif, but without cutting in on any of the comforts people expect in a sophisticated retreat," said young Modiano.
The Modianos keep a fleet of boats operating the half-mile stretch from the marina to the hotel, and any guest who wishes to go ashore can simply hail a boat.
Choice lots at the marina currently sell for about $15,000 on the main canal and are large enough to build a home with a swimming pool and/or tennis court. The estimated cost for construction of a weekend cottage in that area is between $15,000 and $20,000.