Apartments in Upscale Lima Maintain Glow as Rentals Investment
Gestion newspaper recently reported that while the real estate market in Lima has not been growing with the same enthusiasm it has shown in recent years, the districts of Miraflores, Barranco, Lince and San Isidro is still mostly dynamic. These are some of the most expensive districts in Lima and also the districts that are favored by expats. Reportedly, approximately 50% of the people who buy a home costing between US$ 100,000 – 200,000 in these districts do so for investment purposes.
According to Luis Indacochea, manager of commercial investments at Edifica, a real estate company in Lima, the people who buy the buildings rent the space in order to generate an income. By buying the buildings in their entirety and renting out rooms, apartments or office space on an individual basis, investors are able to draw back healthy returns. Indacochea estimates that by renting, a property owner in Miraflores, Barranco, Lince or San Isidro can earn back between 6% and 7% of the purchase price annually.
Edifica is a real estate company that focuses on developing housing projects in the aforementioned districts, with their target market being sectors A and B. Often their clients are between 25 and 35 years old and are buying or renting a home or apartment in order to be close to work. The apartments typically have between 40 and 80 square meters of space and many common areas, making them ideal for single people.
Apartment buildings are typically sold in plans before the apartments are built, and the prices are 15% lower than when the project is finished. However, Indacochea indicated that in general, people who want to buy a home are hesitant and often do not make the purchase because they are unsure of the economy. Despite this, Indacochea says he has an optimistic outlook and predicts a 15% increase in Edifica’s sales for 2017.