Landlocked Bolivia seems to mainly attract the backpacker crowd. It isn’t on the radar of many high rolling tourists. There is just too much competition from nearby countries that offer a variety of attractions including well known beach destinations that boast top notch resorts. “Not a lot of people from the U.S. visit Bolivia unless they have relatives or friends there,” said Rick Jackson, owner of Jackson Rivero Bienes Raices, a real estate company that has offices both in Bolivia and the U.S. “There are some backpackers, who are mostly from Europe, but they spend very little money.”
Adventurous souls who are not attached to the idea of seaside vacations will find Bolivia of interest. It is unique, vibrant and is sure to provide an unforgettable experience. La Paz, the administrative capital of the country, stands at 12,000 feet above sea level and gets the majority of the tourists that come to Bolivia. It is located in the Andes, in a canyon made by Choqueyapu River, and is surrounded by breathtaking scenery. The Andes Mountains cut through Bolivia and are, among other things, home to Titicaca – one of the highest commercially utilized lakes around.
Every year thousands of thrill seekers take a chance on Yungas, otherwise affectionately nicknamed Death Road, and ride their bikes down to Corocio, Bolivia – where the Amazon basin begins. Those with a historical bent can explore the country’s scattered Inca ruins and along the way get to know the indigenous peoples that make up the majority of the Bolivian population. Charming colonial cities of Sucre, Bolivia’s constitutional capital and Potosi offer a glimpse into a more recent past.
Friendly locals and low cost of living are definitely part of the reason retirees and expatriates may find themselves attracted to Bolivia. Once you get involved in all aspects of life in Bolivia “you will get tired of everybody being nice to you,” said Jackson. “The food is great. They have wonderful domestic beers and wines.” To sweeten the deal, all this comes at attractively low prices. “Everything is about 70 percent less than the U.S.,” said Jackson. Good quality dental and medical care can be obtained at 90 percent of the cost.
Bolivia at a glance
Located in South America, Bolivia shares borders with Argentina, Brazil, Chile, Paraguay, and Peru and has an estimated population of 9.7 million people. The country covers 5,479 square miles of land, roughly the size of California and Texas combined. Long before Europeans set foot in the Americas, Bolivia was part of the Inca Empire, the largest state during the Pre-Columbian era. The Spanish invaded in 16th century and ruled the territory until 1809. Since then, Bolivia has seen its share of war, economic hardship, and political chaos. While Spanish is the lingua-franca for Bolivia’s diverse population, indigenous languages such as Aymara and Quechua are still widely spoken.
Culturally rich Bolivia is also well endowed with natural resources that include natural gas, petroleum, timber, silver, iron, gold, and hydro-power. The last decade has been marred by violent protests and the eruption of long simmering tension between the country’s indigenous population and the wealthy European descendants.
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Bolivia remains one of the poorest nations in Latin America. Recent laws require foreign companies operating in the hydrocarbon sector to pay higher royalties and leave the production side of things to the government. This has left many companies already invested in the country’s oil and natural gas sector in a lurch and has, no doubt, scared off other large investors. It also doesn’t help that America suspended Bolivia’s duty-free trade benefit for expelling U.S. agents from the Drug Enforcement Administration.
Bolivia’s GDP was estimated at around USD 16.6 billion and grew by 6.2 percent in 2008, according to CIA’s World Factbook. The service sector makes up a lions share of the GDP at 51.8 percent with industry and agriculture producing 36.9 and 11.3 percent respectively.
Currently 60.1 percent of the country’s exports go to Brazil while just over 8 percent ends up in the U.S. Its official unemployment rate for urban areas stands at 7.5 percent but this figure doesn’t take into account the widespread under employment problem that plagues the nation. A majority of Bolivians – 60 percent – fall under the country’s poverty line.
Real Estate in Bolivia
In 2005, 53.7 percent of Bolivians voted for Evo Morales, the country’s first indigenous President. Since coming to power, he has instituted a controversial land reform policy that involves breaking up large estates and redistributing the land among the impoverished native population. The reform set out to change a situation in which 90 percent of the land is owned by 10 percent of the population, according to Time Magazine. Perhaps the most famous case involved an American expat – Ronald Larsen – who made headlines for resisting the government’s new rules. Larson, who first arrived in Bolivia 1969, is said to have since acquired more than 104,000 acres of land, according to The New York Times.
“Large farms are almost impossible to buy and sell because of the new government restrictions,” said Heinz W. Zintzmeyer who is the owner of HWZ, Inc., a property company that specializes in Bolivia. Smaller properties fall outside of the new regulations. “The new regulations don’t generally affect properties below 5000 hectares [about 12,000 acres] and business buildings,” he said.
The market doesn’t seem to have been affected much by the global financial crisis. This may have a lot to do with the fact that banks don’t generally finance property purchases. “The real estate market is doing well in the lower price range of below USD 50,000 for a nice house or condominium,” said Jackson. “Since financing is not available to foreigners and most residents, cash is the normal way to make purchases.”
Very few foreigners venture to Bolivia to purchase property but those who do seem to be attracted to places like Cochabamba, Santa Cruz, and “the Beni, especially Magdalena,” said Zintzmeyer. Though there has been a growing interest from Europeans, mainly Swiss and Germans, the market in terms of foreigners remains very much an insiders’ one, according to HWZ Inc. which has offices in Switzerland.
In Santa Cruz “The property values rise as you get closer to the Central Plaza. This is true no matter how far you go out into the countryside.” said Jackson. “Due to the climate, most homes have very large covered patios. Interior rooms [can] become too warm during the day in order to enjoy life. Hammocks are standard patio furniture for the afternoon siesta. It is a low pressure way of life.” A normal U.S. style brick and concrete home with a 1,200 square feet interior, 3 bedrooms and 2 bathrooms on an 8,000 square feet lot 3 miles from the Central Plaza costs about $60,000, according to Jackson Rivero Bienes Raices.
Buying property in Bolivia
Foreigners are treated like locals when it comes to buying property in Bolivia. “Foreigners have no problem in owning real estate in their own name. There are no special rules,” said Jackson. “Permanent residence is easily established by owning property,” said Zintzmeyer. Buyers need to make sure that titles are clean. “There is no title insurance. You must do your research before you pay your money,” said Jackson.
Those purchasing property in the countryside should also beware of squatters. Living in the countryside can be appealing in many ways but may not be the best choice depending on individual circumstances. “If indigenous people occupy any part of your land and start to build a home, it is almost impossible to get them off of your land,” said Jackson.
As it stands Bolivia faces a lot of challenges. Its reputation abroad has been tattered by recent reforms implemented by the Morales government. “Bolivia has excellent potential but has a tendency of leaning too much to the left,” said Zintzmeyer. This makes potential investors weary of taking the country seriously but deals are everywhere for those willing to take a little risk. “For those who are in the housing and commercial development business, the future is bright,” said Jackson.