Uruguay Real Estate – 10 Reasons to make it Your Offshore Investment Choice
experience a different culture
There are a lot of reasons people are attracted to Uruguay real estate, which include a sunny place to spend winter, experiencing a different culture, taking advantage of real estate opportunities that are not available in the domestic market, investment diversification, protection against inflation or domestic threats, and establishing a base for citizenship and/or retirement.
As you compare Uruguay real estate to other offshore opportunities, you will learn that in addition to attractive settings and properties, Uruguay offers an attractive investment climate. Following are 10 factors that contribute to the safety, effectiveness, and comfort of your real estate investment in Uruguay.
1. Uruguay has a stable and transparent government
Uruguay’s political system is a democratic republic with executive, legislative, and judicial branches (much like the US). It is one of the most stable countries on the continent and is tied with Chile for having the least government corruption in Latin America. Uruguay’s government actively encourages international investment, trade, and tourism.
2. Uruguay has a stable economy
Uruguay was the only country in Latin America that avoided the global recession in 2008 and 2009. JP Morgan credited this to Uruguay’s fiscal discipline and adaptability of policies.
Uruguay’s economy is characterized by an export-oriented agricultural sector, a well-educated workforce, a developing industrial sector, a thriving tourism industry, and a fast-growing software industry.
3. You do not need to be a resident to buy Uruguay real estate
Property can be purchased and held by foreigners, as well as Uruguayan or foreign corporate structures, without the need for any government preauthorization or approvals.
4. Uruguay has a secure property registration system
Uruguay has a trustworthy and secure property registry system. Holding title to property in Uruguay gives you full ownership rights. Secured interests in real property and mortgages are actively enforced by law.
5. Uruguay has a stable real estate market
Uruguay real estate markets are stabilized by the fact that Uruguay is traditionally a cash society and most Uruguayan real estate is owned free and clear. When local banks do make real estate loans, they are very conservative and require a high rate of collateral. Because of this, it is rare for a home to be put on the market due to mortgage pressure.
6. Uruguay has property available in a variety of attractive settings
- City property: Uruguay’s capital, Montevideo, has been selected many years in a row as the most livable city in South America by Mercer Human Resource Consulting. There are apartments and suburban homes in a variety of unique communities and price ranges.
- Beach property: Uruguay is also the location of Punta del Este, South America’s premiere beach resort, with a variety of properties ranging from quaint cottages to world class luxury apartments. Besides Punta del Este, there are several small seaside communities with lots and a variety of single family homes.
- Country property: Uruguay has small farms, and rural estates, and large tracts of agricultural land.
7. Uruguay is a socially comfortable place to invest and spend time
Uruguay has the most highly educated population, the least economic disparity, and one of the lowest crime rates in Latin America. Uruguayans are generally friendly and tolerant.
8. Uruguay has good infrastructure
Uruguay has one of the best maintained road systems in Latin America. Uruguay has good utility distribution in most all developed areas (including cable TV and Internet), as well as regular sanitation services.
9. Uruguay real estate is bought and sold in US dollars.
Uruguay real estate is generally bought and sold in US dollars. Also, Uruguayan banks make accounts available in US dollars as well as euros and Uruguayan pesos. If you are in dollars you can purchase and sell Uruguay real estate without currency exchange costs and fluctuation concerns.
10. Uruguay has bilingual property administration services available
Many real estate offices in Uruguay provide property administration services that take care of apartments and homes for out-of-town owners (as well as oversee building services for homeowner associations).
This article was first published at http://paradiseuruguayrealestate.com/article/uruguay-real-estate-10-reasons-make-it-your-offshore-investment-choice
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David Hammond is the author of Buying Real Estate in Uruguay – available for immediate download from EscapeArtist
Don’t buy the hype on Uruguay. My wife & I did and went there earlier this year to see it for ourselves. We found it totally overrated by this author and others who have an interest in promoting it. See our report and slideshow below.
Uruguay: As Seen In March, 2010
Slide Show by Josee Woodward
http://cid-4e3a29aa5b9c4b3f.skydrive.live.com/play.aspx/Uruguay%202010?ref=1
Uruguay: Not as Advertised
Report by Warren Woodward, April 2010
For many years I have read about Uruguay, a country about the size of Arkansas located between Argentina and Brazil with a southern Atlantic ocean coastline. With stable and secret banking, one of South America’s highest standards of living, its longest life expectancy, lowest rates of crime and corruption, and supposedly good infrastructure, Uruguay has been called “The Switzerland of South America”. Recent writers have discontinued using that exaggerated moniker but many still recommend the country as a place to retire and invest. Live and Invest Overseas rated it #3 on their recent “10 Best Places to Retire” list.
Anticipating the strong possibility of a dollar meltdown and concomitant chaos in the U.S. at some point in the future, Josee and I spent the month of March, 2010 traveling in Uruguay to assess it as a possible place to diversify some money out of the U.S. in the form of a Uruguayan real estate investment which could also be used as a place to retire in our later years or bug out to if need be before that.
Because airfare was so expensive ($2,100 for the 2 of us, plus 4 days in transit for a round trip from Phoenix airport), we thought we should stay for a month in case we liked the country and needed time to actually buy a place. What a waste of time and money!
Both International Living and Live and Invest Overseas have misrepresented Uruguay. It is a third world country in which just about everything is more expensive than in the first world. With the exception of a few toll highways, most of the roads have potholes capable of swallowing motorcycles whole. Sidewalks almost everywhere are crumbling. Much of the place looked like no maintenance had been done in 50 years.
When we first saw the horse drawn carts at the small beach town we camped at, we thought they were quaint and just some locals taking it slow. When we continued to see the horse carts throughout the entire country, we realized people were using them out of economic necessity, not as a fun, laidback alternative to a car. With gas at $6.50 a gallon and cars at 2 to 3 times the price in the U.S., I guess horse power is to be expected. Even in the capitol city, Montevideo, we saw horse carts. Most of the ever-present dumpster scavengers there use them.
Overall, the country suffers from all the same ills to be found in most Latin American countries: litter everywhere (despite lots of human, as opposed to mechanized, street sweepers), noise, funky plumbing and wiring, too much stuff that doesn’t work, jerry-rigged this and mickey-moused that. And we are still trying to figure out where the thousands of people who visit the beaches during January and February go to the toilet because there aren’t any public ones. If the country’s general prices were a quarter of what they are, a lot of these sorts of things could be overlooked. But to pay more than first world prices in a substandard setting is just plain stupid.
A couple examples: Our idea to travel with a cooler ended real quick when we consistently saw average sized coolers which would cost $40 in the U.S. going for $150. Food, both in the restaurants and the markets, was so expensive and mediocre that we actually lost weight! We kept asking Uruguayans we met how people could live since wages are nowhere near U.S. levels. No one could give us an explanation except to say it was hard. With minimum wage set at US$400 per month, it must be hard indeed for the average person. Ordinary hotels were close to $100 a night, and camping, which we also did, was not cheap at about $10 a night.
One interesting aspect of Uruguay is that all big ticket items — real estate, vehicles, TVs, large appliances, etc. — are priced in U.S. dollars, not Uruguayan pesos. Not there long enough to figure out why, I can only guess that it has to do with inflation of the peso. Whatever, whether in peso or dollars, we found that the hotel and restaurant prices quoted in Josee’s guidebook, which was printed only a year and a half prior to our trip, were all 50 to 100 percent higher at the time of our visit. And that was not because they “saw us coming”. Uruguayan culture is not a bargaining one. Prices are marked and that’s what people pay, just like in the U.S.
As beach and bodysurfing wave snobs, another minus for us was that the beaches, while plentiful and often pristine, were windswept and the waves wimpy and blown out. Additionally, the beach towns are mobbed during January and February then basically ghost towns for the rest of the year. Since we were there in March, many businesses were already closed. The remainder of the country, being pretty much endless pasture land, held little appeal.
I could not help but see the country’s problems as the result of its socialist policies. Many enterprises are state owned — cement, railroads, banking, communications, oil refining, etc. As a result, most have about 3 times as many employees as they should and taxes are through the roof to pay for it all including the much-ballyhooed “free” health care. Income tax is not much of a factor but there is a 22% VAT on just about everything as well as import duties which double the price of just about everything since, in a country as small as this (3.5 million), just about everything is imported.
A consequence of taxes is of course people dodging taxes. And so an alternative flea market style economy has developed. In her slide show, Josee has some photos of one that we went to in Montevideo. Billed in our guide book as the largest flea market in Latin America, the streets of an entire neighborhood were blocked off to vehicles and filled with vendors selling almost everything imaginable.
Other photos include some of the old vehicles still in service throughout the country. They do have new ones, mostly Chinese and European mini-cars not available in U.S., but the old ones were more photogenic. Our rental car, BTW, was the cheapest I could find by emailing about 2 dozen companies and it cost US$594 for 28 days. It was a 2009 Fiat Uno with a 1300cc motor, 5 speed manual, no air, no power steering, no air bags, and no chimes or idiot lights for not wearing your belt or for opening the door (which I found a welcome relief).
Driving was typical Latin style with what signs and road markings there were being just guidelines. Josee found it nerve-wracking, but I did all the driving and quite enjoyed and took advantage of the free flow of it all. What I did find nerve-wracking was the fact that almost every city and town intersection was unmarked as to Right Of Way, and the U.S. custom of yielding to those on your right did not apply. Making it more exciting was that most of these intersections were blind. Sometimes it was “understood” that the road I was on had ROW; other times it was anyone’s guess and a game of chicken.
Uruguay also has the distinction of having the worst route signage of any country I have visited. With no way to drive around towns, one is directed to the center of town and then not directed out. “Obvious” ways out never worked and we would usually spend about an hour driving in circles. Asking directions was generally a wasted effort since people who do not drive (the vast majority) are clueless.
Due to economic considerations there are lots of very small motorcycles and mopeds, often with the whole family on board (and don‘t miss the photo of the guy riding with one hand on the handlebar and the other holding a child!). Not being fans of mandatory helmet laws (or mandatory anything), Josee and I were pleased to see almost everyone outside of Montevideo, where there is a strong police presence, blowing off the country’s mandatory helmet law.
In fact, outside Montevideo the lack of police was a pleasant respite from the U.S. which, in case you have not noticed, has become a police state. In the 1,800 miles we drove around the country, I saw about 5 cops on the road and none of them were shooting radar or even had it in their cars.
Despite the lack of police we never felt unsafe at any time so there was probably some truth to the much-touted low crime rate of Uruguay. That said, there are bars on a lot of windows. I attributed that not to high crime, but to the lack of police. Also, bars are cheaper and more effective than alarm systems.
We met a few Uruguayans who had lived in the U.S. and spoke English. Once, while lost trying to get out of a town, we stopped at a “fruteria” (fruit, veggies, and maybe a few other things) to get a watermelon and the proprietor told us he’d been in the U.S illegally from 2001 to 2008 milking cows. The rest were all legal immigrants (and some had become U.S. citizens). One told us in no uncertain terms that investing in Uruguay would be a mistake, and that the country, in so many words, was a hopeless third world socialist basket case. He was married to a U.S. woman and owned a Mexican restaurant in Wisconsin. He was totally done with the litter and chaos (his words) of his country, and thought everyone should go live in the U.S. for 2 months to be trained in how to live.
As though it was not worth visiting, several of the local people we met wondered why we even came to Uruguay. That was something I have never experienced in other countries. While there is definitely national pride amongst Uruguayans, there is also a large number of people who leave to better their economic condition. As a result, the population grows slowly.
An anomaly in Uruguay is the beach resort of Punta del Este (East Point). Punta is where the wide mouth of the River Plata meets the Atlantic Ocean. It’s a narrow point and so has beaches facing both east and west, with high-rise condos in the middle and somewhat more “American style” suburbs inland from the point and at the very tip of the point. Punta has expensive fashion and other stores, and the whole place basically caters to South America’s rich and middle classes. I read a news report of the cops putting some aggressive panhandlers on a bus to Montevideo. That’s the kind of place it is.
Owning vacation rental apartments in Punta seems to be a way for Argentinians and Brazilians to hide money outside their countries and, when the condos sell, a false bill of sale understating the price is a common part of the transaction. The money that people get for their vacation rentals can only be made during the busy January and February tourist season, so rents then are astronomical. We saw US$25,000 for January and US$19,000 for February being asked for one luxury 3 BR ocean view condo.
We had a laugh visiting the nearby beach town of Jose Ignacio, billed in one of the Uruguay articles I read before the trip as the “epicenter of global hip”. The article was written in 2007. I guess you had to be there then. Supposedly U.S. actor Bruce Willis and Colombian singer Shakira have places there, but the town will need more than a few celebs for it to be the epicenter of anything, except possibly over-priced Uruguayan real estate.
Cheap R.E. was another thing Uruguay was supposed to have going for it, but prices have risen so much in the past couple of years that it is hard to say if R.E. is still a deal for flippers. Yes, some R.E. close to the beach is cheap compared to the U.S. but it is also important to consider that the lots and houses themselves are usually smaller and less well appointed — dinky kitchens, mickey-moused hot water systems, no closets, no garage (this in a country where vehicles cost a fortune), and no central heat (this in a country where there’s no snow but winters do dip into the 30s).
International Living is currently calling the 120 mile coastline of Rocha, the area north of Punta Del Este that stretches to Brazil, the “next Punta Del Este”. International Living urges readers to get in now before prices “skyrocket”. We drove that coast and spent time there. For it to be anything like Punta the ramshackle towns there now would have to be bulldozed in their entirety, an unlikely prospect. Additionally, the condos are still going up in Punta. People who want the Punta lifestyle will most likely buy those.
Josee just read this over and said I was (surprise!) being a little too negative and that I should include some of the highlights of our trip like the cattle and sheep auction we stumbled on during our trip across the interior. Yes, the livestock auction, complete with iconic Uruguayan gauchos (cowboys), was a true slice of life and is well documented in her slide show. For me, a highlight was Los Surenos, a group singing Uruguayan songs in the street at the flea market. Ry Cooder and the Buena Vista Social Club have nothing on these guys. We stood there listening to them for some time and bought a handful of their homemade CDs for $5 a copy, probably the best deal in Uruguay. The hot springs in the western part of the country were nice. We soaked in several. And in four weeks we never saw anyone with their pants hanging off their ass. But none of those highlights justified the price of the trip. So enjoy Josee’s slide show and save yourself a trip to Uruguay.
A couple more things: Many Uruguayan people in all walks of life are addicted to mate (pronounced mah-tay), a low caffeine herbal tea. They cannot go anywhere without it and can be seen anywhere and everywhere clutching the cup (traditionally made from a hollow gourd) with a silver straw sticking out of it, along with a thermos of hot water (for continual cup refilling) stuck in the crook of their arm. At the beach, on the sidewalk, riding the moped — thermos and cup go everywhere they do. Reminded us of babies who must have their bottle. You’ll see ’em in the slide show.
What you won’t see in the slide show are the worst mosquitoes I have ever experienced anywhere. Usually mosquitoes come out at dusk and the only place you might find them during the day is in a dense forest or jungle. When the wind blew the wrong way in Uruguay, the mosquitoes came out no matter where you were or what time of day it was. Once we stopped the car near the beach, not a tree in sight, 10+ mph wind, broad daylight, and in less than a minute were savagely attacked by swarms. This same scenario was played out over and over in situations where you’d never expect to find mosquitoes. They’d even bite Josee while she was jogging on the beach. Bad!
The trip was capped off with a $62 “airport tax” when we left, as well as airport security confiscating the food we had brought in our carry-on luggage for the 2 day trip back home. Every country I’ve been to cares only about the agricultural and food products you bring in, not what you take out. Uruguay, which did not check what we brought in, has it exactly and appropriately backwards.
At least we didn’t have to take our shoes off and were treated with respect and kindness by the Uruguayan Air Force personnel who acted as airport security. On arrival back in the U.S. I was commanded, drill sergeant style, by a TSA martinet to take my shoes off. I sat on an empty table to do it and was ordered off. “Jesus Christ!” I muttered in frustration. “Watch your attitude!” was the next command barked. I remained silent but thought “Warrant-less searches. No shoes. No liquids. No sharp anything. Don’t sit down…. Good Grief…. And now they’re coming for our attitudes!”
Warren,
Just watched the slideshow and read your commentary. It is too funny. We also are looking for “a place to escape” as things get worse here with Nazis and Communists taking over. We explored the western shores of Mexico in 2007 after hearing about the cheap retirement and real estate. Was a joke about the low prices. I did not see any real estate deals, and can imagine that all the prices have plummetted after the real estate collapse in the STates over the past few years. They were even touting international banking loans available to U.S. citizens buying real estate in Mexico at the time.
My husband heard about the great “retirement living” in Mexico, and like your wife, I have to remind him that there are plenty of things to appreciate about third world countries. It will not have many of the amenities, like lots of great cars, that we have. Value the beautiful flocks of sheep and animals and beaches. They looked isolated, and some of us like that. My husband is an avid body surfer, but says that he can live without waves. Did you run into dangerous tides? I almost drowned on the Pacific side of Mexico. I have memories of being near death.
Was the socialism a spillover from Venenzuela? I agree that most of these third world countries are destroyed not because of a lack of resources, but corrupt governments, including Mexico. The difficult thing looking at your slides, and our memories of Mexico, is that these countries have HUGE potential, but infrastructure including pathetic governments, make it almost impossible to improve.
I agree that the Pettigrew newsletter and books – International Living, are nothing but lots of hype and this couple is hyping up areas that they have bought real estate and are trying to sell.
Panama – getting better reports. Have you explored?
Would love to call and chat about thoughts on overseas investments and living. email: lovemygraycat@yahoo.com
Thanks, Betsy
BETSY, I LIVE IN BOQUETE, PANAMA. IF YOU HAVE ANY QUESTIONS ABOUT THE AREA I WILL BE GLAD TO ANSWER THEM. I AM NOT A REAL ESTATE PERSON AND NOT TRYING TO SELL YOU ANYTHING.
IT IS NICE HERE.
Warren, im sorry that you did not like Uruguay. However, if you wore expecting to be like in America you should of stayed in America. i mean, why go to another country and put down the country becosue it’s not like America? AMERICA IS A POLICE STATE! people have no respect for each other and everybody only cares about the stupid rat race they are in just to have a car and a big tv. how shalow can you people be?
in America, if you can’t afford private health insurance on your own and most people can’t you will die before they help you…. wow, great, i wish i lived in the first world as you put it, first world, what a joke! in America they fine you for jay walking, hahah omg. in America, they want for a house made out of plywood worth 40 grand 650 grand so please, next time you want to go on vacation don’t. just stay in your backyard with your colorful bermuda shorts and dark socks on and pretend your much better then everyone else in the world.
idiot!
Beautiful pictures! Can’t wait to go there, in February. Instead of paying $1,000 for airfare, I’m using frequent flyer miles from a credit card deal and pay less than $70…
Maybe you had the wrong expectations. I think it’s especially problematic when the destination has been hyped through the roof by enthusiastic articles.
I’m a bit puzzled about what you report about prices though. I see three star hotel rooms for less than $40 in Montevideo, in February no less. I see two bedroom apartments in Montevideo being offered for $40,000, or less than $400 in rent. I heard that staples like vegetables, meat and dairy is much cheaper than in the US. One blog post reported getting a huge portion of spaghetti Milanese (breaded pork steak) for less than $4 via room service. I think in the US you wouldn’t even get a bottle of water for that, not to mention a sandwich.
I can understand and tolerate though that cheap Chinese made Walmart-stuff like the cooler is much more expensive there. If you need the latest electronics, a nice car and an unlimited supply of *stuff*, then it’s probably not the right place.
Warren,
How strange that your perception of the country was so utterly different from my own. Have you travelled to South America before or outside North America?
I think there is a fundamental question that you have failed to address here: why is Uruguay not more like Phoenix? Your analysis on this point is eagerly awaited.
Warren-
I liked your insight about Uruguay. I just saw the movie with Anthony Hopkin called The City of Final Destination. I was facinated by Uruguay, but your article has given me pause. Unfortunately, your slide show is no longer available. Is there some way that I could see it?
Thank God there are people like you that will tell us the whole truth. Still, I am a rough it kind of guy so I am sure I will check out Uruguay and Argentina for an adventure.
Thank you so much.
John
Awesome comment Warren, have you been anywhere else and do you have anymore reviews? (plz link them) Also have you been to Argentina?
Betsy, nobody in American politics is either a Nazi or a Communist, but both the Democrats and the Republicans these days have fascist tendencies and favor the super-rich over the ordinary person.
Anyway, I would never retire in any foreign country without spending at least six weeks there first.
I have lived in Uruguay for 5 years and everything stated in the article is true. At this point in time the prices of everything have doubled in 5 years. Inflation is a problem here. Home/land owners put property on the market at outrageous prices “just in case” someone stupid will come along and buy it. They can hold out for years if need be. I am out of here and moving to check out Panama and other places. South and Central America will probably be “same-same but different” or at least more affordable than Uruguay.
Someone should take a flame thrower to folks like IL. They come in, jack up the values to be damned and leave the place in shambles. They ruin things for expats and locals alike and rarely tell the whole story.
People don’t always expect it to be like America but they are not prepared for the realities which are not disclosed to them.