Investing in Real Estate in Lima: Benefits, Risks, and Key Considerations
Buying an apartment or house in Lima is often seen as a safe and profitable investment. With a constantly growing market and strong demand—especially in districts like Miraflores, San Isidro, and Barranco—real estate has shown consistent appreciation over time. However, like any investment, it is not without risks.
Is Real Estate Really the Safest Investment?
To get a clearer perspective, we consulted three industry experts.
Silvana Huanqui, an Economics professor and researcher at USIL, explains that while real estate investment is generally stable, external factors can influence the market. “The real estate sector is always exposed to political and economic conditions, which can lead to price fluctuations,” she notes.
Andrés Uribe, Director of Finance, Investments, and Treasury at Mapfre, emphasizes that real estate tends to hold its value during periods of inflation. “Unlike other financial instruments that may lose value, properties traditionally serve as a means of preserving capital while generating passive income. Insurance companies have historically used real estate investments for capital protection,” he explains.
However, Uribe warns that real estate markets go through cycles of growth and decline, and external events like natural disasters can impact property values. “If you don’t have proper insurance, you could lose a significant portion of your investment,” he cautions. Additionally, he argues that while real estate is a relatively secure investment, it is not as safe as government bonds from developed countries or deposits in top-tier banks.
On the other hand, Luciano Barredo from Urbania believes that real estate is the safest investment due to its tangible nature. “A property is a physical asset—you can see it, use it, and control it. Unlike stock market investments, which depend on market fluctuations, real estate offers a sense of security. Moreover, properties almost always appreciate in value over the long term,” he says.
Profitability: The Key Lies in Renting
One of the most common mistakes in real estate investing is leaving a property vacant, expecting its value to increase on its own. Professor Huanqui highlights that the best way to recover an investment is through rental income. “If you buy a property and leave it empty, waiting for its price to rise, you might actually be losing money. Over the past 10 years, rental income has been the key to investment recovery,” she states.
Uribe adds another important factor: maintenance. “An unoccupied property deteriorates much faster than one that is lived in. If a home is abandoned and falls into disrepair, its value will drop,” he warns.
Conclusion: Is Investing in Lima’s Real Estate Market Worth It?
While Lima’s real estate sector offers advantages such as stability and protection against inflation, it is crucial to analyze the risks and make strategic decisions. Choosing properties in high-demand areas, considering rental opportunities, and securing proper insurance are essential to maximizing profitability and minimizing risks.
Investing in real estate can be a great opportunity, but like any investment, it requires careful planning, research, and a long-term vision.
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