Investing in Real Estate

We've all seen the brochures promising "12% Guaranteed Yields." Let's strip away the marketing fluff and look at the actual math for 2025.

1. The "Long-Term" Play (Stability)

This is the standard 1-year contract, usually with a penalty for early exit.

• Gross Yield: 6.0% - 7.5% (Typical for Villa Morra/Carmelitas).
• The Math: After the minimal vacancy (demand is high for good units) and maintenance, you are looking at a NET yield of 5.5% - 6.5%.
• Why do it? Peace of mind. You often get paid months in advance, and you don't have to worry about changing sheets or managing reviews.

2. The "Airbnb" Hustle (Yield)

• Gross Revenue: Yes, you can hit 10-12%.
• The Catch: The market is flooded with generic studios. To compete, you need "wow" factors—designs, views, amenities. Plus, management fees in Asunción are standardizing around 20-25%.
• The Reality: Unless you manage it yourself, your NET yield often lands around 6.0% - 8.0%. Is the extra 1.5% worth the headache? That's up to you.

3. The Developer's Secret

Why do wealthy Paraguayans love real estate? Because they don't buy apartments—they build them. The "Developer Spread" in Paraguay is massive compared to the US or Europe.

The 2025 Cost Breakdown:

• Construction: To build a premium finish apartment or duplex, you're paying $550 - $750 USD per m².
• Land: Depending on the zone, land incidence adds $200-$400 per m².
• Total Cost: You're all-in for roughly $900 - $1,100 per m².
• Exit Price: That same unit sells on the market for $1,400 - $1,600 per m².

That represents a 30-40% gross margin. This is why we often advise clients with larger capital ($500k+) not to buy 5 units, but to buy a double lot and build a small boutique project.

4. The "Chaco" Frontier

Finally, a word on land. The Bioceanic Corridor is changing everything, turning the dusty Chaco region into a logistics hub connecting Brazil to the Pacific.

• The Opportunity: Land prices in strategic hubs (like Loma Plata) are doubling every few years.
• The Warning: This is an illiquid asset. You are buying dirt and waiting for the road / power / industry to arrive. It's a generational play, not a quick flip.

5. The Golden Rule: Title vs. Right

One final warning: Paraguay has a history of messy land titles. Never put a deposit down until a specialized Escribano has done a 20-year title search. If someone tries to sell you a "Derechera" (Right to Occupy) instead of a "Título" (Title), walk away. You're buying a lawsuit, not a property.