Investing Is Not Buying Cheap: A Critical Look at the Misunderstood Profitability in the Paraguayan Real Estate Market

A critique of the reductionist logic of "low price" as a synonym for opportunity, and a call to evaluate real estate investments based on real value, liquidity, and long-term sustainability.

In a market like Paraguay's that is still maturing, there remains a distorted—and deeply rooted—notion about what it means to invest in real estate. The word "opportunity" is often automatically associated with accessing a low-priced property or a low price per square meter, without a deeper analysis of its true performance as an investment asset. This interpretation, although tempting for those looking to multiply their capital without taking great risks, is often misleading. And in many cases, it ends up generating more losses than profits.

Real estate profitability cannot and should not be measured solely by the entry price. The difference between price and value, between initial cost and net return, is fundamental to understanding how to build a solid, sustainable, and financially strategic investment. And that difference, in Paraguay, clearly marks the line between an asset with potential and one that is simply cheap.

Price is the amount paid. Value is what is obtained in return. In the real estate sector, this difference is expressed in factors such as location, quality of design and construction, the prestige of the developer, the prestige of the construction company, the liquidity of the product, its performance in the secondary market, projected occupancy, rental demand, legal stability, and the asset's reputation as a safeguard.

An apartment selling for USD 45,000 on the outskirts of the city may seem like an attractive opportunity numerically. However, if that property lacks a consolidated urban network, if it's located in a project lacking technical or commercial support, if rental demand is unstable, or if resale is restricted by the product's low liquidity, the supposed initial "savings" quickly fade. In contrast, a USD 90,000 apartment in a dense, well-connected urban area with solid rental demand and institutional support may have a lower profitability in gross percentage terms, but offer a higher, sustained, and predictable net return.

Even within the same neighborhood, it's possible to find notable differences between projects that seemingly share a similar location. One apartment may be listed at USD 1,300 per square meter, while another, just a few meters away, is selling for USD 1,800 per square meter. At first glance, the cheaper option might seem more attractive, but the difference can be explained—and justified—by multiple factors: architectural design, quality of materials, common spaces, ceiling height, the developer's profile, the type of projected management, and even the specific street on which the property is located and its relationship to the urban fabric. This price difference is often, in reality, a difference in value. Evaluating a real estate investment involves understanding these subtleties and knowing that what is being paid more isn't always a premium, but rather a premium for liquidity, predictability, and lower risk exposure.

One of the most common mistakes is limiting profitability measurement to the ratio of monthly rent to purchase price. This formula, useful as a quick reference, doesn't consider critical factors such as vacancy, common expenses, administration, taxes, maintenance, insurance, depreciation, and—most importantly—asset disposal.

In Paraguay, where the secondary market is still opaque and underdeveloped, true profitability must also incorporate liquidity analysis. How long does it take to sell that property, if necessary? How many offers are actually received? Is there a public willing to pay for that product without having to auction it off? A "high-yield" asset with chronic vacancy or no resale market loses its attractiveness as an investment, even if it was acquired at a low price.

In mature markets, real estate investment analysis always considers three pillars: liquidity, projection, and backing. In Paraguay, these variables are often ignored or underweighted.

• Liquidity: This is the asset's ability to be converted into cash without losing value. A property may offer high returns on paper, but if it cannot be sold in the short or medium term, or if it must be auctioned off to generate liquidity, its usefulness as an investment is severely limited. This applies especially to apartments in poorly established projects, without professional management or market positioning.

• Projection: It's not just a matter of whether the area "will grow," but whether there is an urban logic to support that growth. Public infrastructure, amenities, connectivity, mixed-use development, proximity to economic hubs. Without these factors, the project remains tied to speculative narratives without any real foundation.

• Support: In Paraguay, informality and the lack of traceability among many developers remain a serious problem. Choosing a product developed by a player with proven experience, a track record of delivery, regulatory compliance, after-sales management, and technical expertise reduces risk and provides real value. The difference between similar projects with different developers can be measured in years of stability or months of litigation.

There is a growing trend in the local market to present low-ticket products as "democratizing investment," when in reality they are financially unviable schemes sustained by aggressive marketing and inflated promises. The absence of strict regulations and a lack of financial education favor the proliferation of these models.

Apartments in the pits sold below actual construction and marketing costs, peripheral areas without basic services where "high profitability" is promised, or projects without technical support that entice with affordable installments but without providing deeds or guaranteeing occupancy are examples of false opportunities that abound in the market.

In this context, the responsibility of the investor—and the real estate agent—is to raise the level of analysis. To ask questions beyond price. To question projections. To demand support.

In the Paraguayan real estate market, where supply is growing rapidly but qualified demand is still limited, investing wisely means understanding that a low price is not synonymous with opportunity. And that true profitability is built with time, strategy, and technical judgment.

A solid investment isn't based on the illusion of a quick return, but on building a stable, liquid, projected asset with real demand and concrete backing. The challenge is to stop looking only at price and start looking at value.

Because in this market—as in any other—the true investor is not the one who buys cheap, but the one who buys well.