Tuesday, June 21, 2011

The Brazilians Are Coming (And Buying Miami Condos)

Long-term this is a nice play. Lock in the current low interest rates, buy low and wait for Bernanke to start bailing out the Treasury bond market with newly printed money. The inflation will lift the nominal value of the property and the debt can be paid off with cheap dollars. This works especially well for Brazilians.

WSJ reports that
Surging real estate prices in Brazil and the currency’s 45 percent gain against the U.S. dollar since 2008 are sending Brazilians to South Florida in search of bargain vacation homes and property investments. That’s helping bolster Miami’s condo market, with total sales increasing 92 percent in the first four months of 2011 from a year earlier, according to data from the Florida Association of Realtors.
The edge is to the Brazilians becasue of their currency advantage, but Americans who borrow at current cheap interest rates also will benefit from buying now.

Don't do this a quick flip, necessarily, but as a long-term hedge against inflation.

1 comment:

  1. Hey, we ain't mad with the Portuguese.
    We need the money down here in Miami Beach.