Macroeconomic challenges, including high interest rates in the US and the devaluation of the real against the dollar, have not had a substantial impact on the flow of Brazilians setting foot on the American real estate market.
According to data from the National Association of Realtors, Brazilians ranked fifth among the foreigners who will buy the most real estate in the USA in 2022, both in terms of number and financial volume, with a share of 3%. Florida was the favorite (55%), followed by New Jersey, Wisconsin, Louisiana, Georgia, North Carolina and New York.
Another survey, by Florida Realtors, reveals that Brazilians ranked third in the number of real estate buyers in the state in 2023. In terms of the amount paid, they ranked second, with a total of US$ 1.451 billion, up from the US$ 486 million recorded in 2022.
According to Ricardo Molina, broker at Talent Realty and CEO of Vollare Immigration, the scenario of political polarization and economic uncertainty in Brazil has generated demand for asset protection and income in dollars. "The American real estate market remains attractive for those looking for a strong economy and currency, as well as legal security."
According to Andrea Pointon, CEO and broker at Pointon Realty, high interest rates have had a greater impact on American consumers than on foreigners. When interest rates started to rise, there was a waiting period, but then sales gradually returned. "This year, sales are continuing well, even in an election year, which has been a positive surprise for me," he says.
For André Duek, head of the Duek Lara Group, the macro scenario hasn't changed the appetite of the public with greater purchasing power. "Considering the upper middle class upwards, I've seen even higher volumes than before," says the broker.
In addition to non-resident investors focusing on monthly rental income, there are more and more Brazilian immigrants buying real estate, with significant changes in their profiles. In recent years, the influx of Brazilian professionals with academic qualifications has intensified.
According to Daniel Ickowicz, CEO and sales director of Elite International Realty, a common practice among Brazilians is to buy smaller properties as a "test drive". "Then, when they decide to move in, they end up keeping the small properties as a source of extra income and buy larger ones to live in," he says.
According to the brokers, the net return on rents in the US ranges from 5% to 7% per year, plus the appreciation of the property. Generally speaking, income tax is levied on rents, according to a progressive table. And for property rentals on platforms such as Airbnb, sales tax, similar to ICMS, is also levied.
Another way to invest in real estate in the United States is through REITs (Real Estate Investment Trust) traded on the stock exchanges, with similar dynamics to real estate funds in Brazil.
REITs are companies that invest at least 75% of their assets in the real estate sector and, by regulation, are obliged to distribute 90% of their taxable income in the form of dividends - which usually happens on a monthly or quarterly basis.
This is one of the ways to expose yourself to a new geography and different opportunities. "The United States has segments that don't even exist in Brazil, such as data centers and telephone towers. In addition, the residential REIT segment is strong," says Paula Zogbi, Nomad's Head of Content. "We have seen a growing interest among Brazilians in REITs as alternatives for diversification and income in dollars, and some assets are already relevant in terms of volume in custody," says William Castro Alves, chief strategist at Avenue. He comments that, in general, REITs have suffered in the short term from the rise in interest rates. "On average, REITs are 30% below historical highs, which leads us to believe that there is the potential for these companies to return to where they were when interest rates fall," says Castro. Today, according to Castro, the average dividend yield of REITs is 4%.
"We've seen a growing interest among Brazilians in REITs as alternatives for diversification and income in dollars, and some assets are already relevant in terms of volume in custody," says William Castro Alves, chief strategist at Avenue. He comments that, in general, REITs have suffered in the short term from the rise in interest rates. "On average, REITs are 30% below historical highs, which leads us to believe that there is the potential for these companies to return to where they were when interest rates fall," says Castro. Today, according to Castro, the average dividend yield of REITs is 4%.
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