Investing Wisely in Brazilian Short-Term Rentals

Buying real estate in Brazil offers an enticing investment opportunity for foreigners keen on leveraging short-term rental platforms like Airbnb and VRBO. The allure of owning an ocean view property at a fraction of what it would cost in the US is undeniable. But while the lower price point is attractive, it’s just one part of the equation.

Investors must consider many factors beyond the purchase price. Fees, taxes, and the legalities of foreign property ownership should all be considered before you invest. If you’re buying to rent, it’s perhaps most important to ensure you have the legal right to do it.

Imagine spending tens, or even hundreds, of thousands of dollars on a property you plan to rent, only to find out that you’re limited on what you can do with it. It’s not uncommon for condo buildings to prohibit short-term rentals. For example, the purchase agreement may say the unit is for residential use only.

If you’re planning to rent, it’s imperative that you get written confirmation, preferably in the purchase agreement, that short-term rentals are allowed. You’ll also want to make sure the condo association documents permit rentals. Ultimately, the decision will likely be up to the condo association.

Finally, if you decide to rent, don’t forget about paying taxes. You might not live in Brazil, but you’re still required to pay taxes in Brazil on the rental income every time you’re paid. By investing in Brazilian real estate, you might escape the high property costs in the US, but you won’t escape the taxes.