Why I Don’t Want a Beachfront Apartment in Uruguay

This ocean-view home in Punta del Este shows the variety of architecture that you can find just a few minutes from town.

Tuesday, Feb. 5, 2008
Punta del Este, Uruguay

Read more about property in Uruguay in International Living Postcards—your daily escape

When it came right down to it, I really didn’t want that apartment by the sea. Not this time, anyway. Let me explain.

Anyone who follows what’s going on in Uruguay has no doubt read plenty of information on the real estate market for apartments in Punta del Este. Apartments have been popular these last five years not only because of capital appreciation, but also for handsome rental returns. Also, many people simply come to enjoy a pleasant vacation in a beautiful seaside resort, and appreciate the convenience of apartment living. Apartments own the lion’s share of the real estate market, accounting for 77% of the 2,025 property closings last year.

But to me, there’s something special about owning a house that you just don’t get with an apartment.

I live in a wooded neighborhood on the outskirts of Punta del Este, about 2.5 miles from downtown. The area is quiet--even in the high season--and the houses sit on large green lots with plenty of trees. Architectural styles are diverse, and vary all the way from thatched-roof cottages to modern Mediterranean-style homes.

The beach is a couple of blocks away, and unlike the high-season crowds downtown, we have only a smattering of bathers in the summer. During the rest of the year, it’s usually deserted. Each morning, crews with rakes clean and maintain the public beaches (and dunes) for several miles in either direction.

We have no fences around our yards, yet the dog can play outside without traffic worries. The quiet gravel streets are great for bicycling or walking. It’s easy to forget that there are scores of restaurants, shows, casinos, and nonstop nightlife just a few minutes away. Due to the lack of crime in the area, we’ve left the house empty for up to six months without worrying about break-ins.

Because we live in Punta del Este for more than half the year, the apartment lifestyle—while great for a vacation—was just not what we were looking for.

In fact, an increasing number of buyers and investors are turning their attention to individual houses instead of apartments for a number of reasons (aside from the difference in lifestyle).

The price per square meter is often half that of a new apartment, so you not only get land, but also a lot more living space for your money. And the ongoing cost of ownership is comparable to an apartment as well. The cost of hiring a year-round groundskeeper, running the sprinkler system, and routine maintenance will often be less than the condo fees paid by apartment-dwellers.

What’s more, rental returns can be good. A nearby house (that just sold for $200,000) is earning 9.5% annually after expenses, renting to high-end, luxury-seeking clientele. In nearby prestigious Montoya, a house just came on the market that will earn its buyer almost 15%, based on the owner’s asking prices for buying or renting the property.

But to be honest, it’s not reasonable to routinely expect these kinds of returns. During the same research that produced these two homes, I found dozens of properties that will return around 5% to 6%. This would be a more reasonable expectation if you’re planning on managing a rental house.

But frankly, I’m not interested in renting mine out. Why? Because I want to be here when the weather, the city, and the ambience are at their best. International visitors are willing to pay these high rents because they feel it’s worth it…and I intend to enjoy it right along with them.

If you’re interested in buying here, you’ll find that the market is fluid, with plenty to choose from. A quick check this morning for houses within three blocks of the beach showed 184 on offer for less than $200,000…with 38 listed for less than $100,000.

Lee Harrison
Roving Latin America Editor, International Living

Editor’s note: There are many more reasons why Lee Harrison loves living in Uruguay, and he’ll share them with you at the Ultimate Event in Cancun, Mexico, May 28–31. If you are considering making the move to Uruguay or maybe investing there, Lee will be available to answer all your questions at the event.

Read related articles:

- Lee Harrison in The Wall Street Journal

- The Best Deals in Montevideo

- The Best Rental Returns in Uruguay

- Get Uruguay real estate for 20 cents on the dollar