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Bolivia is the highest and most isolated country in Latin America. It offers vast, snow-capped Andean peaks, spectacular canyons and huge expanses of high plains and lush, unexplored rainforest. It is the most Indian country in South America and its culture reflects a rich Inca heritage. Being little visited and pristine, Bolivia offers visitors a fascinating and genuine glimpse of South American life. La Paz is Bolivia’s principal city and, at 3,600m, is the world’s highest capital. The drive from the airport is unforgettable. You bump along poor roads passing slums and endless markets until, rounding a corner, the ground suddenly falls away dramatically on one side and the great bowl of La Paz unfolds before you. Illimani’s three peaks at 6,400m dominate the horizon majestically while all around, the Andes stand out in incredible clarity. If work or travels take you to Bolivia for longer than a few weeks, you may want to investigate the local property market to search for that dream house or apartment. But are market conditions currently favorable for residential property hunters, and is it better to rent or to buy? Norma Rios de Ibañez runs property agent Metropoli which has offices in La Paz and Cochabamba and also operates in Santa Cruz. According to her data, residential property prices in both the rented and owned sectors remained relatively stable throughout most of the 1990s. However, adverse economic conditions took a toll in the early part of 2000 when prices in both rented and owned sectors fell in La Paz by an estimated 30%, and in Cochabamba and Santa Cruz by an estimated 50%. The difference in price falls reflects a greater inelasticity of demand for La Paz property, due to greater employment opportunities in the city. According to Ibañez's estimates, the same house that rents for US$1,000 per month in La Paz costs only US$400 per month in Cochabamba. Ibañez expects prices to recover to their previous levels when the economy recovers, by which point the current market should have yielded some medium-term opportunities for the savvy speculator.

The dynamic cultures of Bolivia - Photo by Michel Livet This article is by Martin Li - Martin Li  worked in corporate finance (mergers and acquisitions, flotations,) for a number of years in London during which time he also wrote on financial subjects (capital markets, privatisation.) Nowadays, travel writing focusing mostly on Europe is his speciality, although he admits that he is starting to write about destinations further afield. He finds South America fascinating and intends to do much more travelling and exploring there in future.  He lives in London in the U.K. E-mail:  martinli@FreelanceTravelWriter.com -  Photographs of Bolivia by Michel Livet courtesy of  Fremen Tours Andes & Amazonia  Calle Pedro Salazar 537 (Plaza Avaroa), La Paz, Bolivia Tel. (591.2) 417062 - 416336 - 414069   Fax (591.2) 417327 To take the trip of a lifetime see what Fremen Tours Andes & Amazonia has to offer:  View:  www.andes-amazonia.com -

Live Rent-Free With The Anticrético

An unusual and potentially advantageous aspect of the Bolivian property market is the concept of the "anticrético", which applies to the rental sector. An anticrético is a contract to rent property whereby the renter pays the landlord a fixed sum at the start of the rental period in lieu of paying monthly rent. The interesting part is that at the end of the rental period, the tenant receives the sum back, in full, from the landlord, giving him in effect rent-free living.
 

Bolivia is land of dramatic panoramas and stark vistas

What's the catch? Well, there are two principal factors to consider to help determine whether an anticrético is right for your circumstances. First, the minimum period for an anticrético is generally one year - giving the landlord ample time to invest your payment. Compare that to rented properties that can be taken for periods as short as one month. Second, the sum you pay is not just the lump-sum equivalent of twelve months' rent, but a multiple of maybe three or four times that. For example, if a property is available to rent for US$1,000 per month - an equivalent annual rent of US$12,000 - an anticrético for the same property might cost in the region of US$40,000. From the owner's perspective, if you want to live rent-free, i.e. receive all your money back at the end of the rental term, you need to pay a principal that the landlord can invest meaningfully, making the deal worthwhile for both parties.

Agreements are legally binding, so you are guaranteed to receive your anticrético back, but tenants need to weigh up, in this example, the US$12,000 rent savings with investment returns they might otherwise achieve on the initial US$40,000.

Whether a property will be offered for rent or for an anticrético usually depends on the financial requirements of the landlord, although a choice is sometimes offered to tenants. The fee for setting up an anticrético is generally 2-3% of the anticrético payment.

The Housing Market in La Paz

Ibañez looks to three areas of central La Paz - Sopocachi, Miraflores and San Pedro - as representative of the capital's overall residential market. Many Europeans and other expatriates like to live in Sopocachi, an affluent area retaining many well-built, traditional homes. At the top end of the La Paz market, a 600m2, four-bedroom house in Sopocachi might rent for US$2,000 per month, command an anticrético of US$70,000 and have a selling price of US$230,000.

At the opposite end of the La Paz spectrum, San Pedro also boasts many old properties, although many of them are in quite poor condition. Ibañez regards the San Pedro area as the cheapest in La Paz, citing as an example a small garzonier (studio) in an apartment building that rents for US$100 per month, commands an anticrético of US$5,000 and sells for $17,000. And in between the Sopocachi and San Pedro extremes is Miraflores, an area favored by lower to middle-class Bolivians. Zona Sur is a wealthy suburb of La Paz. Zona Sur boasts newer, larger and more expensive houses than central La Paz, and is favored predominantly by families of expatriates and wealthier Bolivians. Four and five-bedroom houses in Zona Sur can rent for US$500-700 per month and a similar house can be bought for US$80,000. Anticréticos for houses start at US$20,000-30,000 for two or three-bedroom properties. Interestingly, because of the high rate of new construction in Zona Sur, and because working professionals often prefer to live in the city center rather than in the suburbs, flats can be cheaper in Zona Sur than central La Paz. Ibañez estimates that the cheapest anticrético available in Zona Sur, for a 30-40m2 garzonier, is US$6,000, whereas similar properties in central La Paz would start at US$10,000.

Bolivia is land of peaceful cities such as Santa Cruz, the popular Colonial expat haven

Prices Outside the Capital

Prices are significantly lower outside La Paz. For example, a one-bedroom apartment in Santa Cruz can rent for US$80 per month, while a two-bedroom apartment with gallery and large patio can go for US$130 per month and a three-bedroom apartment with two bathrooms and a garage for US$170 per month. A chalet in the California district, with three bedrooms, maid's quarters, garden and large garage, can be rented for US$350 per month.

You can buy a three-bedroom chalet in Santa Cruz, centrally located in the 2nd/3rd anillos (ring roads), with two bathrooms, garden and garage for two cars, for US$47,500. If you are prepared to move out slightly further, to the 4th/5th anillos, a similar investment will get you a four-bedroom, three-bathroom house with patio and garage. And if location close to the city center is not that important to you, a three-bedroom chalet in one of the outer anillos can cost as little as US$13,000.

As for anticréticos, US$5,500 can get you a two-bedroom apartment with a small patio right in the center in the 1st anillo. A little further out in the 4th anillo, a pretty, two-bedroom house with large rooms and garage can be found for US$9,000.

As these examples show, you can pick up a property bargain today in several of Bolivia's major cities, and if you're staying for a year and have some free capital, you can even live in your home rent-free.

High Dining

Cuisine is not often mentioned as one of Bolivia’s more noteworthy points but the food can be delicious and very inexpensive. One of the highlights of local dining is the almuerzo or fixed lunch, which generally consists of a starter or salad, large bowl of wholesome soup, main course, dessert and possibly coffee. Almuerzos generally cost US$1.5-2.0 although you can find them for as little as US$0.5. After eating such a full lunch, you may find yourself not needing to eat much in the evening and in fact lunch is the main meal for many Bolivians. Salteñas, mid-morning snacks of lightly spiced beef, chicken or vegetarian filling in a pastry ball, are also a delight. Anticuchos are a La Paz night-time specialty and consist of beef heart shish kebabs which non-vegetarians simply should not miss.

Getting Around

Transport inside Bolivian cities is cheap and surprisingly efficient. Taxi rides in central La Paz cost US$1.0. Shared taxis cost around US$0.5 and buses about half that. Minibuses add greatly to the city’s bustling atmosphere with young boys leaning out of the windows to shout the buses’ routes to non-readers.

Bolivia has only a limited railway system but travelling between cities by bus can be ludicrously cheap although fairly slow. Travel by lorry is even cheaper although much slower and less certain regarding timings. Internal flights are inexpensive and reliable. A single fare from La Paz to Cochabamba costs US$40, to Santa Cruz US$90 and to Rurrenabaque (Amazon rainforest area) US$49.

Getting There

American Airlines flies daily to La Paz from Miami. Return fares from Miami start from US$733 economy class and US$3,591 business class, including airport taxes. Reservations can be made in the USA on 1 800 433 7300 and at www.aa.com.

Metropolis Property Agent

La Paz office: Julio Patiño (junction with calle 21), San Miguel, La Paz, Bolivia. Telephone 591 2 772 568.

Cochabamba office: Av. Libertador 1493, Cochabamba, Bolivia. Telephone 591 42 403 334.
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