houses and homes
Cities expand, grow, new neighborhoods and shopping centers are formed. Leaving the center, a few minutes away, there are also areas with extensive land, where it is worth developing building projects that will be of interest to investors and also to end users. And we are thinking of any capital of the departments of our country.
Regarding housing, Uruguay today has two problems very difficult to solve: housing deficit and lack of capital.
He housing deficit in Uruguay it is 65,000 homes according to the Ministry of Housing. Building 31,000 homes took 11 years, so, to reach 65,000 it will take 20 years. And that means thousands of hands, of workers, working to promote a country. The construction industry is the industry that moves more personnel, more branches, and therefore moves the economy.
We know that the government is not going to build them, they will be built by private investors. The government, for several periods, regardless of the political party that was in charge, has made concessions and obviously made efforts to give pace to the Construction Industry.
Today you should start a new stage; deeper, broader and more important. It requires other efforts and other actors. It is time for a deeper look, to move forward, to think big: Open Mind, to act all together, all the actors, as a team.
Private builders, mainly Uruguayans, are the ones who have built 31,000 promoted homes in the last 11 years. They invested, in most cases, billions of dollars of their own capital. But to move the needle, it takes a lot more: three or four times that investment. And that investment is outside, abroad.
capital to invest
to solve the lack of capitalwe must attract the corporate investor, the pension and investment funds. They are attracted with benefits and being attractive. The benefits must be granted by the central and municipal governments.
They invest where they find it attractive, where they have a return, they do not do charity. But they are willing to take certain risks, because investing is already taking a risk. The true investor does not look for security, but a profitable relationship between risk and benefit.
Knowing the investor is important. Property investors invest in real estate as one of the simplest, most profitable and safest ways to earn residual income or income. Leases are a constant stream of income and do not require the investor’s time to generate. Leasing is faster and easier and offers regular income and increases equity.
Uruguay is a simple country, geographically easy, you can get from one end to the other in one day. This means that there are no complications to develop these homes throughout the country.
The now, for tomorrow
So, It’s time to go out and find those privates, to those pension and investment funds. We must not wait any longer. We have everything so that they can come, so that they decide very soon. You have to go where they are, holding meetings, presenting them with press articles.
You have to provide them with guarantees (although they already have it for the country) and grant them more benefits: although some already exist, you should think of others.
Build to Rent (BTR) It’s the perfect tool, it’s just right for the business model that corporate investors want. Another advantage is that it helps to lower the rental price.
Those 31,000 homes, built over 11 years, meant a investment of almost around 3,000 million dollars, between the cost of construction and land.
In the meantime, we must get at least 6 billion dollars to allocate to housing. Only then would we be, if it is achieved, eliminating the housing deficit. That’s why the title, let’s think about tomorrow, but starting today!
* Gonzalo Martínez Vargas is CEO of Moebius Real Estate Consultant.