Rental real estate in Brazil: what strategies to adopt?

The Brazilian real estate market is attracting more and more foreign investors looking for attractive returns in a country undergoing urban transformation. But before starting, it is essential to define your rental strategy well. Should you prioritize short-term or long-term rentals? What are the most interesting regions? And what does the regulation say? Let’s take stock.

📅 Short-term or long-term rental: two visions of investment

Short-term rental (tourist or seasonal) is very popular in coastal areas like Rio de Janeiro, Florianópolis or Fortaleza. It can generate interesting gross returns, sometimes between 8% and 14%, provided that it is well managed on site and knows how to manage seasonality (high affluence during the holidays, low at other times).

Long-term leasing is more stable and better suited to large cities like São Paulo, Recife or Brasilia. It appeals to investors looking for a regular source of income, with less daily management efforts. Yields are a little more moderate, between 5% and 8% depending on the neighborhood, but the vacancy rate is often lower, which increases the predictability of rents.

📍 Which cities to target for each strategy?

In São Paulo, rental demand is supported in central and well-served neighborhoods. Long-term rental works very well with a low vacancy rate.

In Rio de Janeiro, especially near the beaches of Ipanema and Copacabana, short duration can be very profitable, especially during tourist periods.

Fortaleza and Florianópolis offer a good compromise: they are dynamic all year round, with strong tourist attractiveness, which allows alternating between short and medium durations.

In Recife, long-term leasing remains efficient, especially for small areas near the economic centers.

📜 Regulations to know before investing

Long-term rental in Brazil is governed by the Lei do Masturbating, which protects both parties. In general, leases last 30 months, with the possibility of annual rent review according to inflation. Guarantees are required (deposit, insurance, etc.), which limits the risks of unpaid bills.

Short-term rentals are allowed but may be restricted by the condominium regulations. Leases cannot exceed 90 days. It is therefore imperative to check that this type of rental is indeed authorized in the targeted building, especially if you are aiming for a residential apartment.

✅ In summary

Brazil offers many opportunities for rental investment, provided that its strategy is adapted to the city, the type of property and the targeted clientele. The short duration allows high yields but requires more follow-up. The long duration offers more tranquility but can be a bit less dynamic in terms of cash flow.

In any case, one thing is certain: well surrounded locally (manager, notary, lawyer) remains the key to secure one’s investment and optimize its profitability.