IL Postcard

The Best Rental Returns in Uruguay

Date: 01/17/2008

Friday, Jan. 18, 2008
Punta del Este, Uruguay

Read more about real estate in Uruguay in International Living Postcards— your daily escape.

Punta del Este’s population grows to about 200,000 during the summer months (January to March). The good news for potential investors is that there are not enough hotels and short-term rentals to accommodate this seasonal invasion. In fact, you can charge up to $14,000 to rent your $200,000 home for the month of January, depending on its location.

The town of Punta del Este occupies a peninsula that separates the Rio de la Plata from the Atlantic Ocean. The two beachside areas that extend from the center are La Brava (most popular with surfers during the daytime) and La Mansa (this is the long stretch of coastline in the direction of Montevideo). The water is calmer at La Mansa, as it is actually the Rio de la Plata in its widest form. It’s where everyone goes to watch the sunset or take a romantic stroll along La Rambla.

Playa Brava seems to be the best area to buy for short-term rentals, as it is more popular with vacationers. One two-bedroom apartment with a garage overlooking the “fingers” beach monument can be bought for $120,000 and rented for $5,000 during the month of January. If you’re willing to invest $290,000 in a two-bedroom apartment (with maid’s room) in the same area, you could earn an average of $11,500 per month during the peak season.

If I were to purchase a property in Punta del Este, I’d buy in Rincón del Indio, just three miles from the center, on Playa Brava. It’s an ideal spot for a second home—quiet, beautiful, away from summertime crowds, and a short walk to the beach. It also has good short-term rental opportunities.

When I visited Punta del Este last month, I looked at two traditional thatched-roof houses on a leafy cul-de-sac of Rincón, where the smell of lavender and cut grass fills the air. The first home, “Septiembre,” has a beautifully landscaped garden and is in perfect condition. It has a spacious living room, a maid’s room downstairs, and two average-sized rooms upstairs—all set up for summertime rental. The best part of the house was a large flagstone balcony, perfect for soaking in the sunshine. This home was on sale for $160,000 and has a steady January rental income of $6,500. It rents for $4,000 in February and $3,000 in the last two weeks in December. It rents out occasionally throughout the rest of the year.

The second, “Provicencia,” is a much nicer choice if you are choosing to live there. Although the thatched roof needs some work (they usually need to be touched up every five years or else replaced after 10 years), the interior is bright and roomy. There are no rooms above the living room and the high ceiling is painted, giving the room an old-style feel. Upstairs has a cozy TV room overlooking the living room, two bedrooms, and a bathroom. Next to the huge living room is another bedroom, a bathroom, and a kitchen, and outside there's a large gardener's home. You could turn this into a dining area for barbecues in the cooler weather, but if I were to buy it, I’d turn it into a guesthouse or maybe install a huge bath so I could relax surrounded by the nature of Uruguay. The price for this one is $174,000 and you would get about the same as “Septiembre” for short-term rentals.

But please don’t buy it—I’m saving my pennies…

Elaine Cooney
For International Living

P.S. Lee Harrison just informed me that “Rincón de Gloria,” an even nicer home in Rincón del Indio just three blocks from the beach, has just been put up for sale. The asking price is $160,000. For more information on these properties, contact Eduaro Duarte.

Read related articles:

- Everybody Wants to Come to Uruguay

- A Two-bedroom Apartment for $6,000...and Other Bargains

- Pay a LOT Less for Property at the Uruguay Auction