Lisa Prevost wrote an article breaking down the Chilean real estate market. My team and I have helped hundreds of foreigners buy and rent apartments in Chile since 2013 when we started Andes Property were quoted extensively in this report. Our attorney Jose Tomas Marambio, a Santiago real estate and business specialist is also quoted. Overall, Santiago and Chile in general are still interesting places to invest. You can still find properties that generate 8-10% cash on cash returns and as commodities prices return, there’s still room for the Chilean Peso to strengthen, further increasing gains as you diversify out of dollars. From the article:
Santiago saw an increase in housing prices between 2010 and 2015, but the pace has slowed since, said Nathan Lustig, an entrepreneur and a principal at Andes Property, a company that provides furnished rentals in Santiago, primarily to foreigners.
A value-added tax on the sale of new properties went into effect in 2016, and “prices for new construction went way up, as everybody tried to buy before the new tax came in,” Mr. Lustig said. “And they’ve kind of stayed that way.”
The value-added tax rate is 19 percent, but the final rate is usually lower, because it is applied to the sale price after the land value is deducted, said José Tomás Marambio Yaes, a real estate lawyer in Santiago.
I was featured in two articles over the last few days. The first, Chile Property: Pro Business Policies Lures Foreign Entrepreneurs, written by Nick Foster in the Financial Times, covers the Santiago’s property market from a foreign perspective. My part:
Nathan Lustig, 28, is an entrepreneur from Milwaukee, US, who came to Santiago in 2010 under the government’s Start-Up Chile programme, which offers grants to promising new businesses, both foreign and Chilean, who set up in the country. Many are in the ecommerce, biotechnology and finance sectors. “Santiago is the most livable city in Latin America and there is wonderful hiking on your doorstep,” says Lustig. “Business-wise, there may be some extra bureaucracy here [compared with the US], but the rules are understandable and you feel confident that they are not going to change suddenly.”
“There is now a real cluster of young foreign entrepreneurs in Bellas Artes,” says Lustig, who has opened Andes Property, a company offering furnished units to the steady stream of expat arrivals in Santiago.
Lustig’s main gripes are air pollution and petty crime, while the distance from home is also a drawback: “It takes 14 or 15 hours to get to Wisconsin. On the other hand, if you are doing business with New York, or just watching sports or talking with friends there, there is no time difference in the southern winter, and only two hours difference in the summer.”
Read the full article over on the Financial Times website.
I was also featured along with my business partner Enrique Fernandez and many other entrepreneurs and stakeholders in the Chilean entrepreneurial community in a special entrepreneurship section of the Chilean national daily La Segunda in an article titled Nathan Lustig: Si Y No Con Santiago. The article talks about the pros and cons about doing business in Chile and how Chile can improve its ecosystem.