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Archived Articles
Simeon Mitropolitski is a Canadian analyst, of Bulgarian origin, and a former syndicated columnist with the Bulgarian News Agency (BTA). He is the author of several hundred articles dealing with hot political and economic topics, both national and international.
He was part of the first group of Bulgarian intellectuals and students that began the opposition movement that finally put an end to the communist regime in this country in 1989, and in 1996-1997 participated in international observation teams during the elections in several Balkan countries - Romania, Albania and Bulgaria.
In 2002 Simeon and his family moved from Bulgaria to Canada where they live now in Montreal, province of Quebec. Simeon is a Master of Political Science from McGill University and a B.A. of Political Science and History.
Global Real Estate Project
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Brazil: Exit strategiesThere is no time like ours to buy a property in Brazil, say those who look only at the price tags. A waterfront apartment in Rio de Janeiro can be purchased for as low as $20-25,000. The small houses in good areas of the same city can be found for as little as $50,000. In the province the picture is even better. Don't look at the Web sites made to dupe the foreigners with deep pockets. The real prices are much lower. But are the prices the only thing to be concerned with when we decide to buy some property in Brazil? Are there other points of concern, more to do with the politics and macro economy than with the actual price labels? Should the investors be prepared with some exit strategies before deciding to enter the local market? Beginning our series of articles on Brazil, there are at least two leading principles that should be noticed. First, Brazil is one of the few countries in the globe that can live without the rest of the world. If they do business with the others, they do it in order to increase their benefits. They have enough resources to produce all they need and the population to consume the final products. The immensity of Brazil's territory and its vast population create a particular culture that can hardly be influenced by outsiders. Only in time of national emergencies but not always such nations may look for help towards the rest of the world. They have no natural enemies in the neighborhood so in the time of peace they forget about anything that occurs across the border. Second, the internal logic of events in these immense countries is much stronger for the macro economic process compared to any foreign trend or deliberate policy. For individual investors these two leading principles have some far reaching consequences. Right now the prices in Brazil attract the investors like never before. Properties that cost $150,000 some 4 years ago now can be bought for much less than $100,000. Many agree that in 5-6 years they will again regain their previous price levels. But this is far from certain. Brazil isn't a country that tailors automatically its financial policy according to the foreigners' wishes. That's why it's far from certain that the next financial cycle will copy the last one with relatively high inflation and relatively stable exchange rates. It could be quite different. So, first, any investor should bear in mind that the properties that cost $50,000 today could cost even less within 5 or 10 years. To put everything you have in Brazil isn't wise and some portfolio diversification should be a must. Second, Brazil undergoes a period of political change. So far the new leftwing president Lula da Silva shows financial self-control, but can we be sure that such restraint would continue during all your investment period? This is also far from sure as shows the recent history of some Latin American countries. For those who want to invest in Brazil right now, there should be at least two main recommendations. First, consider your investment as highly risky. Don't put all your savings in this country. Make some diversification. Second, don't look at the luxurious properties. In time of political turmoil they first fall in value. Instead look at some middle-class properties, small houses or apartments. If you need to repatriate your capital quickly, you'll have bigger pool of buyers.
Brazil profile: --------------------
See also the directory of companies providing real estate services in, and general real estate information of Brazil.
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