When Jacob remembers his search for an apartment in Rio in 2014, he still gets mad. “It was so annoying! We probably looked at more than 40 apartments in three and a half months.” The native German had moved to Rio de Janeiro in 2009. The lease of his apartment was about to expire and the owner gave him a three months’ notice that he needed the place for his mother and wouldn’t extend the lease.
It is hard in Brazil to evict non-paying tenants, Jacob explains. Therefore, landlords are very careful and leases are usually 30 months at the max, after which you renegotiate. He had extended his lease once and lived in the apartment for 60 months. Now, him and his wife Melanie had to find a new place – in the year of the Soccer World Cup in Rio. So prices went up and many apartment owners hoped to make the big money with visitors. In addition to that, “the real estate market in Rio is inefficient”, Jacob exclaims. “Prices don’t differentiate good from bad apartments. You can see a beautiful place and then one where cockroaches crawl up from under the floor, and both places cost 7,000 Brazilian reais (about $ 2,200) a month. Most real estate agents are just salesmen for the landlord, and terrible at what they do. It’s not like in Germany where you can call a real estate agent and they help you find the right place for you.”
He describes that in Rio, the renter often searches online for a place he likes, then calls the agent – or in some cases the owner – and then makes an appointment to look at the apartment. “It feels like many agents are just paid for opening the door. Sometimes it is even hard to get an appointment. And if you get one, it’s at really odd times like on a Wednesday at 1.30 pm.” In addition to that, demand used to be much higher than supply back in 2014.
The nice neighborhoods are nestled between the mountains and the sea. So room is limited and neighborhoods can’t grow. And something unique that he hadn’t seen before he moved to Rio are the favelas, or slums, many of which sit right within the nice neighborhoods, often on top of a hill. Some of the best views in the city are from the favelas.”
He said it took time getting used to living like that. “I was robbed once. That was a good lesson. Now, I stick to certain times and territories. You just get used to that lifestyle and don’t even think about it anymore.” Until a police helicopter races across your head or you hear shootings. Brazil has about 200 million inhabitants, the city of Rio 6.5 Million with a very high per capita murder rate.
Therefore, it is even more important to find a home in the right area. “It’s always been a landlord’s market”, Jacob says. “Of course, like in the United States, locals rather want to buy a home than rent. But many can’t afford that and are living with their parents until they are in their 30ies.” He says, a rational person rents rather than buys right now because purchasing prices relative to rent, as well as interest rates, are so high that it makes no economic sense to buy a home. “Unfortunately! But purchasing prices have started to drop during the ongoing economic crisis in Brazil, so hopefully at some point, we can consider buying.” If there is supply. According to Jacob, many places never hit the accessible market because the owners insist on renting out at fantasy prices and are too proud to lower their asking. Many owners who have had an apartment in their family for several generations see it as a source of income. They may rent a place themselves that is not so nice to be able to rent out the one they own, he says. “They rent out their own place for lots of money and live in a cheap place themselves.”
And before and during the Olympic Games, landlords tried to rent out their place in 6 week packages for prices up to BRL 80,000 /$ 25,000).
The real estate market went crazy, but calmed down quickly afterwards, Jacob remembers. Still, even though living in Rio is great, it is not fun to search for a place to call home in Rio.
The perks of living in Rio during the Olympic games:
Jacob’s wife Melanie did the search during the week and went to the oddly timed appointments. On the weekends, they would look at best offs from that week together.
“In the nice neighborhoods, you can find big and luxurious apartments. But even then: They may be renovated or not. Many places here were built between 1950 and 1990. And some of them are just shabby. What’s more, you find all kinds of evidence of questionable taste from back in the 70s or 80s, like pink bathroom tiles with a matching light grey sink.”
Something that was new to him: Almost every apartment has a maid’s quarter attached to the kitchen. It is a small and simple bedroom and a tiny bathroom with a shower and a sink. And if it doesn’t have a sink, the maids use the sink in the laundry room. The maid’s quarter is nothing luxurious, but it often does have the beautiful hardwood floors made from tropical wood that many places have, he said. Melanie and Jacob use their maid’s quarter as storage. They don’t have a live-in-maid in the home they found in one of their favorite neighborhoods. They are living on a “green” street above the trees and can even see a bit of the mountains from their apartment. “The only things that’s missing and that we would have really liked is a balcony. But such places are rare and usually much more expensive.” At least their apartment was newly renovated by an architect, they have plenty of room – even for visitors from overseas, and happily call it their home for now.
Jacob later found out that his former landlord never needed the apartment for his mother. He renovated it and wanted to rent it out during the Soccer World Cup. But apparently renovations weren’t done in time and he never made the big money during the championship. Jacob and Melanie didn’t take much pity on him.