Viña Del Mar, Chile. II

Viña del Mar

We continue our investigation of Viña del Mar. Today we are going to focus a little more on financial matters, though we just might have a little fun along with it.

Currently a U.S. dollar will bring you 687.64 Chilean Pesos. We will convert costs in pesos to dollars to give you expenses.

First, the consensus of opinions is that Chile has a fairly high level of safety. And between Valparaiso and Viña del Mar, Viña is considered slightly better than Valparaiso. Valparaiso is a little lower economic level. Therefore, costs to rent are a little  higher in Viña. We are told that burglaries do happen when families are not at home but normally not much else.

We looked at some places for rent and for sale. In most of the areas of South America with which we are familiar, people bank in real estate–meaning they do not trust the banks. They save their money and buy rentals or other real estate. Chile’s economy is quite good right now so while we found rentals to be very reasonable, the rent that landlords receive from rentals does not justify the purchase prices that they pay for the property. The only explanation is that real estate is their bank. They may get 3% to 6% return on rentals. In the U. S. the rule of thumb for expected income for a rental is 10%.

This is not saying a person could not find a distressed property. But this is the overall view of real estate. In our opinion, renting makes more sense than buying. However, in our years in South America we have seen these countries go through financial crises where the bargains were incredible. So it’s like any other market, it can pay to be willing to wait.

We looked at a rental that included one bedroom and something that we like but often is not included, there was a place for a washing machine. This apartment rents for the equivalent of $450.00 US. The apartment has a monthly condo fee of $44.00. This building has an area at the entrance that is similar to a hotel lobby with large desk and a “portero” there 24 hours a day which, of course, makes the building quite secure.

This apartment is on the ninth floor, has no balcony but has a lot of light. The people obviously were not prepared for a visit but we still thought it a very good example of what is available for this price so we decided to include it anyway. It is a cute and livable apartment in “real life.”

Bathroom

Bedroom

Looking at living room from the entry. Small kitchen to the left

We looked at a larger and newer apartment for rent in Valparaiso for $100 less per month rent. Other expenses remain pretty much the same.

Here are costs of living in this area and neighborhood, in addition to the rent for one person. One advantage of this apartment is that it is about two blocks from the marketplace where farmers bring their produce, and no doubt many buy from the farmers and sell there. The market, called the feria in Spanish, is a very large area on the order of other open markets that we have shown you in the past. We like these markets better than the supermarkets, which are here as well. We feel that we buy from a local person instead of from a corporation, thus keeping our economy close to home. You pay the vendor for each item as you buy it, thus avoiding standing in a long line in the store and–well–we just like it. So renting close to a market could be an advantage. Also being close to a subway or a bus station. This apartment is two blocks from the bus station where you get the bus for Santiago–or elsewhere. Living expenses are as follows, expressed in dollars:

$44.00  condo fee

$18.00  gas

$18.00  electricity. (does not include A/C or heat)

$21.00 for Internet

$200.00 Food

Here is something we wanted to show you. You don’t see this in Argentina–at least we never have. This is an on-demand hot water heater. Gas is considered very expensive in Chile. Every Chile home or apartment we’ve ever seen had one of these on the wall. They light it when they need hot water–which is as easy as lighting a burner on a gas stove, and the water is instantly hot.

Well we still have another apartment to see in this building. It is vacant, smaller, no room in the bathroom for laundry equipment. It is for sale for $75,000 on the third floor. We are not impressed but if you want more information on that one, let us know. The apartment we are showing you here would be about $110,000 if it were for sale. By U.S. standards, either this apartment should be worth around $45,000 or the rent should be in the $1,000 per month neighborhood. This is what we meant that, unless you just want to live there, the amount of rental income does not justify the price of the real estate. We find this a lot here

We checked on the stock market for those who are interested. For an American they would open an account for $500,000. We are told that if you gave someone $1,000 U.S. along  with a recommendation from someone who is trusted, they probably would open it for less and we can almost surely put you in touch with a key person who could arrange that. It almost sounds like a bribe, but banks and brokerages that are willing to serve a U. S. client must comply with the reporting requirements of the U.S. government, and that makes them expensive clients. So perhaps paying upfront makes it worthwhile for the broker. If you are a stock investor and intend to invest in Chile, we suggest that you ask your current broker for a letter of recommendation saying how long you have done business with them and that you have handled your account responsibly. This is a good idea to do with your bank as well, when you move down our way, no matter which country is your destination. If you are not a U.S. citizen or resident, you will not face the same challenges as U.S. citizens but it would still be a good idea to bring letters of reference from financial institutions. Letters of reference put these people a lot more at ease about you.

Believe it or not, we actually have people ask us if there is a WalMart here. For you WalMartians, there is a WalMart in Viña only it is not called WalMart. It is Lider. WalMart owns 58% of the chain. Home Depot was here. It is called Sodimac but Home Depot has sold their interest.  And what’s THIS? That looks familiar!

Well all this real estate investigation has made us hungry. We think we’ll head off to the restaurant we showed you at the start of the article. We’re a little early for dinner but that means we’ll miss the crowds. We hope that you’ll join us next time.

Also we invite you to write us and let us know what you think, what you are interested in in the way of lifestyle, prices, types of places you would like to live–whatever is on your mind.  Next time we’ll take a little foray into one of Chile’s few interesting diving and spear fishing areas. It isn’t far from here.