With World Cup (and Olympic…a bit) fever building, the cost of renting in Brazil – and Rio especially – has sky-rocketed, even before either have started. Its status as a growing economy has also fuelled a 144% increase in rental costs over the past 5 years. Residents have sensibly taken to sub-letting to visitors just to cover their own rental costs. Even football star Ronaldinho, having been axed from the Brazil squad, is taking advantage of the situation by renting out his Rio home for over £9000 a night during the World Cup! This is an effect we are familiar with here in the UK after the London Olympics. So just how do the two compare now?
2.) So, as a rough guide, the average rent in London is around £1,500 per month. In Rio it is about £730.
3.) Rental yields are, however, very similar. According to the Global Property Guide, average rental yields in Rio are 4.63%, compared to 4.80% in London (although yields are even lower in central London).
4.) The law is more favourable to tenants in Brazil. For example, it is common to agree that the tenant can leave the property before the end of a contracted term without penalty, provided they have lived there for more than a year (most tenancy agreements are for 30 months).
5.) So don’t all rush to invest in Brazilian property at once! If the financial and legal points weren’t off-putting enough, it seems as though crime is on the increase in the lead up to the World Cup. A big drive has significantly reduced the murder rate (down 37% since 2008), but street muggings are up 44% in the first quarter of this year and homicides are creeping up in the suburbs too…“Rio de Janeiro” by Mike Vondran is licensed under CC