The 3 Best Places to Own Real Estate in the "Portugal of South America"

Best Places to Own Real Estate in the "Portugal of South America"
Uruguay’s Punta del Este could easily host an episode of Lifestyles of the Rich and Famous…|©iStock/Frazao Studio Latino

It’s one of the best-kept secrets in international real estate. A stunning, modern destination lined with sweeping cream- and golden-sand beaches, upmarket bohemian coastal towns, and ultra-luxurious resort cities that are beloved by the super-rich.

This country is well-run, peaceful, and welcoming. And it has incredible weather spanning four seasons, with a mild winter, warm spring and fall, and glorious summer with daily highs in the 70s and low 80s F. Plus, these seasons fall at the opposite time of year to those in North America, making it a perfect place to escape the winter freeze up north.

The country I’m talking about is Uruguay, and it’s one of the most opportunity-filled destinations on the planet for real estate investors.

Nestled between Argentina to the west and Brazil to the northeast, tiny Uruguay rarely makes international headlines. But in a region known for its instability, that’s a very good thing. Uruguay is safe and prosperous. It’s the wealthiest country per capita in South America, according to the International Monetary Fund. And according to The Economist, the most democratic.

Uruguay’s stability and prosperity over many decades—along with its sensible business-oriented leadership, easy residency options, and favorable tax policies—have made it a renowned safe haven. This earned it the moniker "the Switzerland of South America." But today there’s another comparison I think is even more appropriate. That’s "the Portugal of South America."

Uruguay is not just stable, it’s beautiful, with a long pristine Atlantic coastline lined with stunning beaches. Inland it’s just as idyllic, with cool pine forests, fertile farmlands, and lush rolling hills. With its temperate climate, livable capital, and under-the-radar bohemian beach towns, it can be eerily reminiscent of Portugal a decade ago, before real estate prices there surged.

I have no doubt the world will discover Uruguay, as it did Portugal. In fact, that process is already underway, with growing numbers of folks moving there. With that in mind, I recently asked one of my scouts, Ciaran Madden, to visit Uruguay. In December, he spent weeks on the ground there talking to brokers, developers, expats, and other insiders.

Here’s a breakdown of the three best locations to own in Uruguay, along with opportunities he uncovered in each.

Montevideo: An Affordable First-World Capital

Montevideo blends European charm with vibrant Latin flair.
Montevideo blends European charm with vibrant Latin flair.|©iStock/Sergey Dolgikh

Anthony Bourdain was a big fan of Montevideo, describing it as "a capital that evokes old Havana or Buenos Aires—but without the crowds." That speaks to one side of Montevideo’s appeal. It has a Latin flair. The city is dotted with vibrant murals and lively markets. The streets hum to the rhythm of reggaeton, tango, and candombe drums.

But Montevideo also has a distinctly European flavor—partly that’s a function of its rich colonial architecture, partly a function of how well-run it is. A city of 1.4 million people, Uruguay’s capital is calm and safe… green and walkable… with a glistening coastline, stunning beaches along the heart of the city, and the kind of dining and shopping options you’d expect of an affluent capital. Consulting firm Mercer rates it as having the best quality of life of any city in Latin America and the Caribbean.

Montevideo is that rarest of things in the post-COVID, remote-working era—an appealing First World capital that remains overlooked and undervalued. The opportunities here can be incredible. Here’s an example…

Just to the southeast of Montevideo’s main commercial district, Centro, is a neighborhood called Cordón. Here, an area spanning several blocks is undergoing rapid gentrification. Students began moving in for the affordable rents and over time made it a trendy place to be. Today you’ll find gourmet coffee shops, craft beer bars, small art galleries, and quirky antique stores (this has earned it the nickname Cordón SoHo).

Developers are erecting stylish condo communities for Montevideo’s young professionals here. You’ll pay $150,000 or more for a 600-square-foot condo in one of these new buildings. That’s pricey by Montevideo’s highly affordable standards.

But in the heart of the Cordón SoHo area, Ciaran visited a traditional home on the market for $198,000. It was a three-bed, one-bath house spanning 1,500 square feet, with a flat roof that could host an additional floor. This property is ideal for converting into several short-term rentals or studios.

Short-term rental rates in the Cordón SoHo area average around $50 to $80 per night, depending on the season. And according to data from AirDNA, annual occupancy rates for short-term rentals in Cordón are about 55%.

Say you spent $150,000 on renovations and converted the home into four units— at $50 per night with 55% occupancy, you’re looking at a gross annual income of $40,150, or a gross annual yield of around 11.5%.

But that nightly rate is wildly low. I’d expect it to rise as Montevideo is discovered. And if the nightly rate were to double or triple in the years to come, then even without increasing projected occupancy in this opportunity in Cordón, you could gross a whopping 23% to 34.5%.

Punta Del Este: The Monaco Lifestyle Without the Million-Dollar Price Tag

Punta del Este offers a glitzy resort lifestyle —without the million-dollar price tag.
Punta del Este offers a glitzy resort lifestyle —without the million-dollar price tag.|©iStock/RicardoKuhl

Punta del Este is the premier resort destination in all of South America. For generations, the rich and famous have descended on Punta in summer (January to March) to see and be seen on its warm golden sands, to park their yachts in its glistening marina, and to party the night away at its high-end resorts and casinos.

At the top end, in the most sought-after areas of Punta, homes sell for $2 million, $4 million, and up. But there are ways you can enjoy the Monaco lifestyle here—without the million-dollar price tag.

Over the past decade or so, as Punta became busier and more built-up, the wealthy started buying summer homes in nearby beach towns like La Barra and José Ignacio. In these towns, you won’t see high-rise resorts or lively bars, shopping malls or glitzy marinas. The vibes are laid back and bohemian. But make no mistake, these are upmarket places. You’ll find fine dining restaurants, designer boutiques, jewelry stores, and cafés serving specialty imported coffees.

These towns were once seasonal. No longer. Since COVID, the facilities and infrastructure needed for year-round living are emerging at pace. The small village of José Ignacio is the more exclusive of the two. Set on a peninsula that juts into the Atlantic, it’s one of the wealthiest enclaves in Uruguay. Homes on the peninsula start in the $1.2 million range. In La Barra, though, you can find homes for far less. And you’re just 20 minutes by car from all that Punta offers.

There are two preferred ways to own in and around La Barra—either in a condo building overlooking the beach or a house a short drive inland in a pastoral gated community.

Ciaran visited a condo in a high-end gated community located just outside La Barra, on the coastal road leading to downtown Punta del Este. This was a stunning ultra-luxe four-bed, five-bath condo spanning 2,000 square feet. From its large terrace, you have exceptional views of the beach and ocean. Community amenities include a sauna, gym, golf practice area, swimming pool, and tennis court. The condo was listed for $765,000.

He also visited a master-planned gated housing community called El Quijote, just a 10-minute drive from the beach. El Quijote has its own lake, river, and nature reserve. It also has an attractive community center with a pool, gym, and restaurant.

El Quijote was originally sold as lots spanning around an acre, with a requirement to build. A few lots are currently available as resales starting at around $75,000. But most have been built on. Ciaran saw a 4,200-square-foot, four-bed, five-bath resale home set on a 1.2-acre lot with stunning views out to the community’s lake. It was on the market for $590,000.

These homes offer an utterly compelling lifestyle proposition… own near a stunning bohemian beach town with everything you need for everyday living. Then right on your doorstep is a world-renowned resort city. This is some of the best-value luxury real estate you’ll find anywhere. But if you want to double your money invested in five years or less on a beach home, you need to go farther east…

Rocha: The Up-and-Coming Region Where Uruguay’s President Owns

The Rocha region is Uruguay’s next big coastal hotspot—offering pristine beaches and investment upside.
The Rocha region is Uruguay’s next big coastal hotspot—offering pristine beaches and investment upside.|©Ronan McMahon

The Rocha region of Uruguay is about an hour’s drive east of José Ignacio and is at the forward edge of the "Path of Progress" in coastal Uruguay.

A Path of Progress is anything that makes a place easier to get to or more desirable—think new roads or bridges, or a 5-star resort where previously there were only cheap accommodations. In Uruguay, this Path of Progress first pushed east out of Punta del Este to La Barra and José Ignacio. Then, as those towns became busier, more folks started looking to others, like La Paloma and La Pedrera on the quieter, unspoiled coasts of Rocha.

La Paloma is Rocha’s most important resort town, boasting some of the nicest beaches in the region. It’s surrounded by serene countryside and is famous for its lighthouse, which dates back to 1874. A tranquil spot for much of the year, its beaches get busy with families and surfers who come for vacations. Uruguayan President Luis Lacalle Pou has a vacation home here.

La Pedrera has an equally spectacular coastline, though the town is quieter and smaller. It attracts more young couples than families. The vibe is hipster. Its main street is lined with bars and craft stores. Besides these businesses, it’s mostly residential.

Few people have done more to unlock the potential of La Paloma and La Pedrera than developer Daniel Oks. One of the best-connected developers in Uruguay and Argentina, he has long been a big believer in Rocha’s future. He first bought land here over 30 years ago, and he has projects right across the region.

His new project may be his most innovative yet. La Serena is a pristine beach in La Paloma. On a grassy hill here, he plans to build four 1,560-square-foot frontline beach homes with direct views of the ocean. Behind will be six 1,960-square-foot homes arranged into a small community. All 10 of these will be on stilts above the sand… literally on the beach.

This project is in the final stages of environmental permitting. Daniel is expecting to get the go-ahead soon. He’s still working out pricing, but he’s estimating $380,000 for the four frontline homes and low-$300,000s for the six others.

That pricing feels incredible, given that the opportunity to own true beachfront on a coastline this spectacular has become so rare anywhere in the world. If this project progresses, I’ll be sending full details to members of my Real Estate Trend Alert group. And RETA members can learn more about all the projects mentioned above in our full Uruguay scouting report here.

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