Why You Want to Own Real Estate in Uruguay

Take a tip from the one country that has, once again, gone “full basket-case” and whose citizens are flooding into its neighboring country — which presents to us an opportunity in foreign real estate in a stable, democratic nation that even I’d own a home in.

Here’s the situation: For the second time in 13 years, Argentina has defaulted on its bonds. Populist President Cristina Fernandez de Kirchner doesn’t believe so. As with so many of Argentina’s maniacal leaders through the years, she lives in a fairytale world in which Argentina thinks it’s a giant-killer when it’s really just a midget with a dream — unrealistic as that dream is. Cristina has been quick to blame the U.S. for selecting an incompetent mediator to handle negotiations between the Republic and investors. She blames “vulture investors” for irrationally demanding full payment for $1 billion in bonds the country defaulted on in 2001. And she blames a New York judge for throwing Argentina into default in the first place.

While this default won’t likely have as deep an impact on Argentina as did the 2001 default, the recession-battered country can hardly afford another financial misstep. And put-upon Argentines who always bear the brunt of the government’s disastrous socialist policies, clearly haven’t forgotten the currency controls instituted with the first default or the rampant inflation it engendered.

Indeed, Argentines once again are voting with their feet, fleeing the government-induced wreckage of their home country for the safety across the Rio de la Plata. In the last three months, they’ve shipped some $400 million in bank deposits to a destination Argentines routinely flock to when they want their money out of the reach of a financially incompetent government.

They’re heading to Uruguay. And just maybe you should be, too.

As I have written before, Uruguay is not the Latin America you think you know. And it’s certainly not Argentina.

Uruguay is a strongly middle-class country. Democracy and the rule-of-law are well-entrenched. Government is stable and transparent. It’s the safest country south of the border and the wealth gap is narrow, meaning there’s no social unrest or crime fueled by an army of have-nots who are pissed at a narrow band of rich elites. You don’t find beggars routinely roaming the streets or impoverished children panhandling. The literacy rate matches that in the U.S. There’s no need to pay bribes. And there’s no mañana attitude.

The country is clean and tidy. The beaches are beautiful, many in their wild state and often empty. The national highways are first-world and well-maintained. Walk into a local grocery store and it’s like walking into a Safeway, Kroger or Albertsons.

You want a real vision of Uruguay — picture California’s La Jolla, Newport Beach or Laguna Beach. That’s what Punta del Este and the surrounding beach towns resemble … only, they resemble the best of coastal Southern California circa the 1960s or 70s, before the traffic, congestion, masses of people and overabundance of strip malls and cookie-cutter homes overran the landscape.

I spent a large amount of time in Uruguay in recent years, driving between a bustling Montevideo, the rural beauty of the eastern farmlands, and laidback coastal towns. On many occasions I’ve grabbed a Patricia beer and empanadas in what has become my favorite hole-in-the-wall lunch spot — El Rincon — in Old Town Montevideo. I’ve dined at trendy restaurants in Punta, and the decidedly upscale beach communities of La Barra and Jose Ignacio. I strolled through fantastic art galleries, shopped high-end furniture and clothing stores. I walked along beaches lined with multi-million dollar, ocean-front homes … and settled in for a massage at a boutique hotel that would easily fit into Miami’s South Beach or New York City. There was craps, blackjack and roulette with friends until 3 a.m. in a local casino that fills up with Brazilian billionaires and supermodels during high season … and the open-air bungalow restaurant at sunset, literally on the sand, watching chefs grill local fish on a wood-fired parrilla, drinking a lovely Argentine Chardonnay and asking a friend, “I wonder what the people who hate their jobs are doing right now?”

In short, this is a country that just about anyone who is comfortable in America would find equally comforting. When I return here, I truly feel like I’m going home … which is why I want to own a piece of property here one day.

A Booming Real Estate Market Without the Bubble

Owning foreign real estate is an excellent way to protect your wealth against government confiscation that happens either overtly through confiscatory tax policies, or surreptitiously through various monetary policies and inflation. It’s precisely why Argentines are such eager buyers of Uruguayan real estate, and why their money helps keep Uruguayan real estate strong.  (And, by the way, I specifically chose not to use the term “propped up,” which could have negative connotations. Uruguay is almost entirely a cash market, and cash buyers are not as loose with pricing houses as are those who rely on a mortgage and aren’t putting down much money.)

Uruguay’s property market offers anything you could want. In Montevideo’s city center, you can find modern, new-construction apartments hidden inside architecturally elegant brick and stone buildings from the early 20th century. You’ll find leafy, tony suburban neighborhoods like Carrasco that are not unlike Lake Forest, Illinois, or parts of southern Connecticut. Drive along the coastal highway through Punta and La Barra you’ll see beautiful homes that look transported from the English countryside, and post-modern apartment and condo towers made of steel and glass.

In Montevideo, newly built, modern apartments with all amenities start in the $150,000 to $200,000 range. While in Punta, a 1,200-square-foot, three-bedroom, two-bath bungalows with a view of the ocean for just $200,000 … or, if you have a deep-enough bank account, there are $3 million, 10,000-square-foot homes right on the sand. In between is everything from traditional middle-class neighborhood homes to chic ocean-view apartments starting at $250,000.

During my visits to Uruguay, I’ve seen many properties with my friend, Sancho Santayana, one of the top local real estate agents. I can tell you that the build out and the finishings are very nice — places I could happily live. (If you want to know more about Uruguayan real estate, I suggest you reach out to Sancho, the managing director at 360 Terra International Realty in Uruguay: www.360terra.com).

Argentina’s Decay is Uruguay’s Gain

Cristina Kirchner may be determined to run Argentina into the ground, but smart Argentines have been protecting themselves in Uruguay’s stable real estate market — a move Americans should pay close attention to.  With the U.S. accumulating more than $17 trillion in debt, our government is going to have to get more creative — soon — in how it keeps up payments on its extravagant lifestyle. A wealth confiscation of some sort is in our future.

When the day comes, you will want as much of your wealth as possible outside the grabby paws of Uncle Sam’s henchmen. Real estate outside America — in a safe, secure, comfortable place like in Uruguay — is an option to consider. It will certainly beat having it available for government to steal directly from your bank account.

I am so convinced of what Uruguay offers that I am once again hosting a real estate, residency, banking and farmland-investment tour in March 2015. I try to do this every year because the opportunities are so abundant and so necessary, given America’s fiscal and social trajectory.  If you’re interested in discovering for yourself why I think Uruguay is paradise beneath the Southern Cross, click here. You’ll be the first to be notified when I have more details.

Until next time, stay Sovereign …

Jeff D. Opdyke
Editor, Profit Seeker

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