Asunción - real estate investment and management

Why invest in Asunción through our?

We help investors select the best properties, then professionally manage them.

Our pillars for choosing alternatives:
1) Resale Facility.
2) Ease of Rental and Administration.
3) High profitability.
4) Alignment with investor vision.

The economic stability, low taxes and high profitability of real estate investments in Paraguay are an undeniable attraction.
We propose to work as a team to select the best alternatives, supported by our experience. We want you to invest successfully, so that later, when we continue to manage the property, it will be easy for us to find high-profile tenants, obtain a good return for you and we can keep the property in optimal conditions at all times.

Customer stories

Investor Profile

Property investors in Paraguay are driven by several primary objectives. They want to initially preserve their capital and obtain a stable income in dollars and then grow it. Many successful entrepreneurs or successful professionals take advantage of their income to acquire flats financed during the construction work in Asunción.

Others, in search of a better return on their capital, have sold properties in other locations to acquire finished apartments in Asunción.
finished flats in Asunción. It is very common that the rents obtained are already being used to pay for the construction of other flats and thus increase the flow of these investments.

Beyond real estate
Why else invest in Paraguay?

Asunción is an investment hub due to its location and low tax burden

Asunción's economy is stable and growing, and it is strategically located in the heart of South America for access to the entire region. Asunción and Greater Asunción account for 70% of Paraguay's GDP, making it the most productive and developed area of Paraguay.

Inflation and the exchange rate
Since 2011 when the inflation targeting plan was implemented, inflation has been very moderate, even in times of pandemic. For this 2023 it is estimated at 4.5% and we are adjusting the rental amounts by 5%, a value that is accepted without inconvenience in the market. Below is the evolution of the last few years:

The exchange rate stability means that the Guarani has only increased by 20% in 20 years. Anecdotally, we have had many cases of property sales from local owners to foreign buyers, where the seller has not wanted to sign a reservation in dollars for fear of its depreciation, preferring to agree on a value in guaraníes. The following is the evolution of the currency:

Demographics of Asunción
Asunción has become separated by avenues from "Gran Asunción" which includes the Central Department where its main cities are mainly Mariano Roque Alonso, Luque, Fernando Mora, Lambaré and San Lorenzo. main cities are Mariano Roque Alonso, Luque, Fernando de la Mora, Lambaré and San Lorenzo. Between The population of these cities has 2.7 million inhabitants, having doubled compared to 30 years ago. Until a few years ago, this growth was strongly horizontal, and the city is currently in a stage of verticalisation of its capital. verticalisation of its capital.
Other interesting aspects of its evolution have been that in the last 20 years it has doubled its middle class, which is now close to 40% and growing. currently close to 40% and growing steadily.
The number of young people in the country is currently at an all-time high: 56% of the population is under 30 years old. Paraguay is going through a unique and unrepeatable opportunity, called the "demographic bonus", in which the percentage of the population of working and productive age is much higher than the percentage of the population considered to be under 30 years of age. percentage of the population of working and productive age is much higher than the percentage of the population that is considered dependent (children, adults and the elderly). dependent (children, older adults).
In Paraguay, in turn, only 60% of the population lives in cities, expecting a continuous migration to cities, as has been the trend worldwide. the trend worldwide. In Argentina and Brazil, these percentages are 92% and 83% respectively.

Asunción still has low m2 values.

Compared to other capitals in the region, Asunción's real estate prices are still low. With flats in new buildings, with amenities, in good neighbourhoods at between 1500 and 1800 dollars per square metre and luxury developments at 2000 to 3000 dollars per square metre, the quality of the new developments is up to the level of capitals anywhere in the world, with high standards of materials and finishes. The quality of the new developments is on a par with capitals anywhere in the world, with high standards of materials and finishes.

The surroundings of the new developments are very attractive, in the area of Villa Morra and Shopping del Sol there is a mix of important residences with new buildings, both corporate and apartment buildings. As these are areas where until 10 years ago there was almost no high-rise construction, everything we see is new, and from the windows of even the lower floors we are surprised by the greenery that makes up the panorama, full of tree canopies.

While prices are still low, we have seen between 2020 and 2023 an increase of close to 15% in property values, driven not only by rising construction costs but also by a much higher appreciation in land values.

Empty land or buildings in poor condition are becoming scarce and prices are rising, directly impacting the replacement cost of flats or offices in the area, it is a trend that has happened and happens in all capital cities, we will help you invest in the right place to take advantage of it.

Real estate development has renovated Asunción

When we ask investors who contact us from abroad if they are familiar with Paraguay, the next question is How long have they been coming?

In the last decade, the change has been radical, surprising the quality and scale of new real estate developments, which have turned Asunción into a business capital for South America with first class properties.

Whether in corporate, residential or commercial buildings, the boom has been big and totally absorbed by the market. It is common to drive around in the van with foreign clients, pointing out buildings foreign clients, and pointing out completed buildings or buildings under construction, where there are no longer any units for sale or rent.
The area of Shopping del Sol / Paseo Galeria / World Trade Center is the focus of numerous real estate developments, as well as in Villa Morra and to a lesser extent in the vicinity of the Historic Centre. The renovation and change of image is total.

How to Invest in Real Estate in Asunción

All the statistics we have listed tend to an easy conclusion: investing in property in Asunción capital is not only profitable but also low risk. In addition to the high number of foreign investors, Asunción receives many entrepreneurs who come to settle here, especially from Uruguay,Brazil, Argentina and Chile.
Now that we've talked about Why invest in property in Asunción let's dive into How to invest in real estate in Asunción!

Investing without Paraguayan residency

Non-residents of Paraguay can acquire a property without any prior formalities with their passport or identity card of their country of origin. Although this is the case, we always recommend and advise our clients to apply for residency in Paraguay, for which they do not have to renounce their citizenship in their country of origin (at least not as required by Paraguay). The advantages of having the residency have an impact on the one hand when it comes to the The advantages of having the residency have an impact on the one hand when renting the property, as the taxes for foreign owners are higher, and on the other hand when selling the property there is also a differential rate. On the other hand, it will be extremely difficult, if not impossible, to open a bank account without residency. In general the clients manage the funds from the real estate agency to be transferred to their country of origin or to make the payments that they indicate within Paraguay.

In conclusion, you can first buy the property and then apply for residency, or you can take advantage of your trip to Paraguay and come with the necessary documents to complete the process.

Related resources:
“Steps to invest in Asunción”

Buyers in Asunción should always use a buyer's agent.

Have experienced, successful and detail-oriented specialists on your team from day one. Every country in the world and every city applies different real estate laws. Some are common, but many parts of the fine print are so different that simple mistakes can cause serious problems. are so different that simple mistakes can cause serious problems.

The seller of the property, particularly if it is a well or under construction, will have their own agent working for them, and working on their behalf. The buyer should choose their own real estate agent in Asunción. As well as choosing someone who will look after your interests, it is important that they then commit to manage the property and meet the returns you have set as real.

As the sole agent, the real estate agent owes all loyalty to the buyer, and none to the seller, to be able to advise, select properties, effectively negotiate price, terms and conditions. An agent representing the seller cannot deliver that crucial level of service to the buyer.

The commission, or selling fee, is paid by the seller, so hiring a dedicated agent is free for the buyer, just express your interest in working as a team and send any properties you are interested in or curious about to the agent for an honest valuation.

Buyers choose estate agents who know:

All about the real estate market in Asunción and its individual neighbourhoods.

Current state of the rental market by living it day by day.

Each type, style, and specific location and appearance of each piece of property currently on the market that matches the buyer's purchase criteria. buyer's purchasing criteria. The luxury real estate market commonly has properties listed above actual market value. Some buyers feel the need to make a quick decision, and some sellers try to capitalise by setting a high price. A good buyer's buyer's agent will counteract that.

Each property that is about to come on the market but has not yet been offered for sale.

Possible "closing" sale prices soon to be offered by developers who want to complete one project and start the next. The experienced buyer's agent will also know if a new project that meets the buyer's criteria can offer lower well prices. prices.

Details of the background of each developer, the usual long-term maintenance of their buildings, low or high amounts of expenses, speed at which they obtain deeds, etc. high or low, the speed with which they obtain title deeds, etc.

The details within a purchase contract and which clauses are important to pay attention to.

Property types to buy in Asunción

Among the alternative properties to rent we normally discard from the beginning houses and duplexes because of their low return on investment, high maintenance and vacancies. investment, high maintenance and vacancies. In general the alternatives that can be found either in well construction or finished are:

Departments

Oficinas Corporativas

Corporate Offices

Commercial Premises

We can start the search by a predilection for this type of property or rather by neighbourhoods, amounts or returns. Not in all areas we will find attractive properties of all types.

In some cases we can find these properties already with a tenant inside, this for the investor can increase security, although from our point of view it is not so relevant since when we advise to buy it is because it will be easy to rent at the estimated values. from our point of view it is not so relevant since when we advise to buy it is because it will be easy to rent at the estimated values. (So far we maintain our trademark of always renting the purchased property within 30 days!). Also in some cases, some developers maintain unimaginable vacancy periods to rent at above market value and then sell the property "With tenant". In conclusion, it can work, as long as that tenant is very easy to replace.

“3 Rental demand hotspots in Asunción"

Expenses that differentiate the net rent from the gross rent when renting your property in Asuncion

In order to choose investments with accurate information it is important on the one hand to know the estimated rental value of the property, if possible by a purchasing agent who works with you as a team and can compare alternatives, and not by the seller's representative. agent who works together with you and can compare alternatives, and not by the person representing the seller. In addition, the person who estimate this value should be in the day to day rental market, to know exactly how easy it will be to place the property once it has been acquired. purchased.
On the other hand, it must measure all the concepts that separate a gross rent from a net, out-of-pocket rent for the owner:

VAT: This is 5% for residential properties and 10% for offices or commercial premises, in the customary way rents are closed VAT included in residential and plus VAT in corporate or commercial, although there are exceptions. included in residential and plus VAT in corporate or commercial, although there are exceptions.

* Income tax: If you have applied for residency, your accountant will annually assess it and it will represent approximately 4% of the invoiced rents. invoiced rents. If you have delegated the invoicing to the real estate agency, by power of attorney, this amount will be withheld month by month when the real estate agency invoices you. the real estate agency makes the invoice. If you do not have the residence in Paraguay the withheld rent will be 8%.

Expenses: As in the case of VAT, in residential properties a value for expenses is usually agreed and therefore these are paid by the owner. In corporate or luxury buildings it is more normal to close values plus expenses. To have an estimation we can take between Usd 1 and Usd 1.2 per m2 of the property for mid-range buildings and up to Usd 2.5 per m2 for luxury or corporate properties.

Impuesto inmobiliario: Este se suele abonar una vez al año en Enero y ronda el 0,2% del valor del inmueble, aunque puede variar según las zonas. Junto con este impuesto llegan las Tasas por alumbrado, barrido y limpieza, que suelen ser abonadas por el inquilino, acorde a lo que el Código Civil Paraguayo indica.

Property tax: This is usually paid once a year in January and is around 0.2% of the value of the property, although it may vary depending on the area. depending on the area. Along with this tax come the taxes for lighting, sweeping and cleaning, which are usually paid by the tenant, according to the Paraguayan Civil Code. Paraguayan Civil Code.

Rental placement fee: 50% of one month's rent to be paid by the landlord and 50% to be paid by the tenant.

Maintenance costs of the property: These are usually minimal or non-existent for the owners, as the consortium of the buildings covers most of the inconveniences and with the maintenance we carry out at the departure of each tenant with their guarantee, the property is kept in good condition. and with the maintenance that we carry out at the departure of each tenant with its guarantee, the property is kept in perfect condition. perfect condition.

It may be that by taking actual rental values, which give minimum vacancies as we all wish, and subtracting discounts to arrive at the net value, you will find lower returns when consulting us than directly with a developer, but it is better to know this in advance and not when you have already bought! not when you have already bought!

Getting funding

First of all, we must clarify that in order to obtain a mortgage through a bank loan, in addition to residing in the country, you must have a declared income of a certain length of time. declared income with a certain length of time. Beyond this, buying a property for investment with bank financing is not usually profitable, as the interest rates in Paraguay are still somewhat high (approximately 10% per year in Guaraníes). because the interest rates in Paraguay are still somewhat high (approximately 10% per annum in Guaraníes) and the stability of the currency does not offer any advantage to "liquefy" the interest rates. any advantage that would "liquefy" the amount of the instalment over time.

That said, foreigners can access financing directly from developers or it is even common for it to be provided by private sellers. private sellers.
They can be found on the market:

On-site financing: In all projects, with a greater or lesser amount of initial delivery or balance of possession. We usually set up the plans for our plans for our investors in such a way as to leave monthly payments that match the rents we charge them each month and then make semi-annual annual semi-annual top-ups, to administratively facilitate payments from abroad.

Post-delivery financing with the developer: In some cases developers offer short, medium or long-term post-delivery financing, varying from 6, 12, 18 months or up to 120 months. It is important to pay attention to the costs of these, as they are usually in dollars, with a rate of 9.5% on balances, although sometimes opportunities arise. with a rate of 9.5% on balances, although sometimes there are opportunities.

Direct financing with the owner: These are very specific cases in which we have been able to close purchases with 50% down and the balance at 24 to 36 months.

In short, there are options and it is important to have an overview of the investor's objectives, in order to put together a portfolio of properties that will give the investment flow or return that the investor desires.

Closing (or transaction) costs at purchase

We will clarify point by point the components of investing in a property for rent in Asunción:

VAT: In 90% of the cases the prices negotiated are VAT included, although some developers' lists of values are + VAT, in which case the same is 1.5%.

Deed: If the property is ready to be deeded and it is the first deed, the buyer usually pays the total amount and it is around 2%, in case of resales, they pay approximately 1% each. they pay approximately 1% each.

Payment method costs: It is especially important if you will be paying in dollars in cash. Yes, you read that right! In Paraguay, paying in cash for a property may property in cash may imply an additional cost, at the beginning of 2021 the commission for depositing dollars in cash in a bank was between 3% and up to 5% depending on the institution. 3% and up to 5% depending on the institution. This was an amount that sellers often wanted to charge buyers or was part of the negotiation. the negotiation. Nowadays this fee has decreased, but it is important to check beforehand. In case of payment by bank transfer from abroad you will have to send the amounts with the transfer costs at your expense and add approximately Usd 35 of accreditation costs in Paraguay. accreditation in Paraguay.

Property equipment: The property may require some investment to reach its maximum rental potential, which can range from air-conditioning to furnishing and decoration. air conditioners to furnishings and decoration. It is important to determine this in advance with your buying agent.

Management of your investment property

A key aspect for it to perform to its full potential and retain its value in the long term. This involves more than just marketing the property to find a suitable tenant:

Tenant screening.

Preparation, termination or renewal of lease documents.

Manejar las reparaciones y los problemas de mantenimiento.

Lidiar con las emergencias.

Full communication with the landlord and the tenant.

Recursos relacionados
"Property management for investors"
"10 Frequently Asked Questions about property management"

Sell your property in Asunción

Sellers pay a 5% commission, which, in case the buyer comes with his own agent, is divided between both brokers. We advise our clients on possible improvements to offer the property at its best, we take quality photographs as well as a full showing to attract the maximum number of qualified buyers from all over the city, country and world. a complete exhibition to attract the maximum number of qualified buyers from all over the city, country and world. If you have purchased your investment with us, it is very likely that it will be one of the most attractive real estate investments in Asuncion. in Asuncion, making resale much easier among our portfolio of investors. We constantly liaise with other real estate professionals, this is a powerful and effective way of working to maximise the exposure of the property. exposure of the property.
Por cada oferta recibida calculamos, hasta el último centavo, los costos de cierre para que nuestros clientes sepan exactamente importe a recibir. Del precio usted deberá deducir aproximadamente un 1% de costo de escritura, el otro 1% absorbe el comprador y el impuesto a la venta de inmuebles para residentes es del 2,4%. Los vendedores extranjeros, si aún no han tramitado su residencia, como les solemos aconsejar inmediatamente que adquieren un inmueble, están sujetos a un impuesto adicional que incrementa en 2,4% los impuestos de venta (Es decir 4,8% en total).

Which neighbourhood is the right one to invest in?

The answer to this question is often complex, it really depends on the weightings of each aspect made by the investor. We guide our clients to look in the neighbourhoods surrounding 2 strategic points in daily demand for rentals.

How can we help?

Let's search together through the opportunities available, take advantage of our experience to understand the local market and invest wisely. We will ensure that you buy at a good price, a property with high rental demand that allows us to have low vacancy, with a good tenant and that is easy to refurbish when the tenant leaves. We will also make a real observation of the resale alternatives or not for each property, a key aspect from our perspective.

Related resource: "Customer stories"

Response on most valued aspects:

"The immediacy of the requisitions and the efficient and clear management of the administration, which is essential, especially for clients who are not resident in Paraguay".

"Proximity and after-sales service".

"The confidence generated by work done with professionalism and seriousness. The practical and efficient response they provide to the issues raised, thus facilitating procedures and resolving problems inherent to the transactions. The care for the interests of the clients as their own".

"Very good service, very honest and responsible people. Very good customer service".

"Trust, respect and willingness to help always".

"Speed and trust in the administration in general".

"Your customer service. And, the prompt answers to our questions. Respect, responsibility and punctuality. They make it very easy for us to do anything".

Managed Real Estate Investments