Americans Buying Real Estate In Chile

Everyone who is anyone has friends who chat about moving and investing overseas! This is especially true with the seemingly mounting, heading-towards-a-train-wreck economic issues in the U.S. Whether you believe the hype about unsustainable deficits, gross human capital misallocations, and ballooning entitlement programs-all overlaid with massive bouts of currency devaluation-it’s both fun and a good idea to think about diversifying assets around the world. One of my favorite blogs to read, The Sovereign Man, just published a great article about the benefits of buying property in Santiago, Chile. I recommend you read the article for yourselves, but here are a few take-aways:

Stable Currency & Economy. The biggest motivator to either relocating to, or investing in, Chile is that both the economy and currency are increasingly stable. The country is a net exporter of natural resources, and the government controls its fiscal appetite, living relatively within its means (a weird concept for modern government!). And no country can have long term economic stability without a stable currency-the Chilean Central Bank resembles Scrooge from A Christmas Carol compared to the U.S. Federal Reserve. They are quick to raise rates and protect their currency with any hint of inflation. Imagine living in a country where the Central Bank didn’t pillage its savers?

Great Quality of Life. The climate is temperate, Mediterranean, and extremely similar to California’s. Infrastructure is modern, and Santiago is far cleaner than the average South American city, lacking the squalor factor pervasive elsewhere. Santiago is undergoing a “gentrification as it becomes popular with young professionals, the art crowd, and the gay community.” The Sovereign Man describes these as the “triumvirate of a promising real estate market.”

The Price is Right. Based on The Sovereign Man’s metric of “cheap” for downtown major world city real estate prices of $1,000 per square meter, there are some great bargains in Santiago. For instance, “in the area around Parque Forestal near in the center of town and the Bellas Artes district, you can find some lovely older properties for between $1,000 to $1,200 per square meter.” The area is a protected historic district, and property taxes “are a joke,” ranging between $40 to $100 per year!