What the hell is anticrético?

What the hell is it?

Bolivians enjoy a unique property leasing option known as anticrético, a process where the owner of a property leases out the residence in exchange for an interest free loan for a period of at least one year.

The tenant will loan the landlord a sum of money, usually between US$5,000 and US$50,000 depending on the quality of the abode, in exchange for the right to live in their property without paying rent for the duration of the loan.

At the end of the year, the tenant can either demand their money back from the landlord or they can request an extension for another year. Anticrético usually increases 20% per year, so if you had an anticrético of US$15,000, for example, you could expect to pay another US$3,000 to increase the total loan to US$18,000.

Got it?

As far as I’m aware, there is no other country in the world that uses this system. It works here for two reasons:

1. In Bolivia it can be very difficult and expensive to borrow a large sum of money from the bank, even if you are a property owner.
2. The rental income of a property is typically very low.

Landlords love anticrético because with a little business know-how they can invest that money and make more than they could by renting. It’s also a life saver if they or a family member falls into serious financial trouble.

Tenants love it even more because they are essentially living rent free for an entire year, saving thousands of dollars.

What are the risks?

So what’s the catch?  Like any business venture that involves large sums of money, there are some risks involved.

• You have to deal in cash. In Bolivia bank transfers are not really a thing yet. Large purchases are normally made in cash, with both parties meeting at a public notary who witnesses and verifies the transaction for a small fee.
  • The danger here is traveling to and from your ATM or notary with so much money. If word reaches the wrong person that you’re carrying 20 grand in your pocket then you could be in trouble. Many years ago a friend of my suegro was robbed and stabbed to death in his home just hours before he planned to pay for an anticretico. His assailant, a former best friend, killed him just US$5,000. I’ve also heard stories of corrupt bank tellers who tip off armed robber associates whenever someone makes a large cash withdrawal. The risk is real.
• It might not be their house. A common scam is that “landlords” offer anticrético for houses that they don’t own, or they offer the same house in anticrético to two different people. But these scams can be avoided with proper care. Any anticrético transaction should be overseen be a trusted lawyer and include a visit to Derecho Reales, a home registration office that keeps records of who owns what property.
• The landlord doesn’t have the money to pay the tenant back. This happens all the time and is something to carefully consider. The tenant will eventually get their money back but there are often delays. In this situation, the tenant can either keep living in the property rent free until the money is returned or they can do what’s called a traspaso (tranfer), which is when the current tenant legally transfers the housing agreement to a new tenant in exchange for the original sum of cash. The problem with traspaso is that it’s up to the current tenant to find a new tenant which can take months or sometimes even years.
• The landlady dies and her children go AWOL. This happened to my suega who took an anticrético on a small shop near the city center about 10 years ago and during the contract her landlady died. The children inherited the building but have ignored any requests to return the money or organise a traspaso. My suegra still has the legal right to use that building and talks about opening a shop every so often. For the most part, it’s been sitting there empty for 10 years. This situation is very rare because the value of the shop is far higher than the anticrético so normally the owner would pay back the anticrético and sell the shop for a large profit. I read on a popular expat website that after a certain amount of time the tenant automatically gains ownership of the property, which is something my suegra needs to look into.

Despite these risks, anticrético is considered by most Bolivians to be a safe and sensible investment if all the right precautions are taken. If you have stable employment and don’t need to urgently access your savings, you can spend years living rent free, which is exactly what many people do. You can then “cash out” once you have enough money to buy your own property.

Finding an Anticretico

I spent several months looking at places for anticrético. There were some good ones in my first month here but I was reluctant to take them because I hadn’t received a visa yet. If my visa was denied, I could have been out of pocket a hefty sum of cash (in hindsight that never would have happened).

An interesting thing about anticrético is that price tends to vary depending on how much money the landlord thinks they needs, so there’s not much consistency like you find with renting or buying. For example, we saw an awesome place for $7,000 and some shockers for $15,000.

On the whole, however, most of the anticréticos within my price range (under $15,000) were pretty bad. Some resembled jail cells with cement floors and no natural light. Landlords who do have windows proudly tell you soleado (sunny), as if that tiny slither of sunlight were a crucial selling point.

One place we looked at was only accessible by climbing three stories up a ladder and instead of a front door you entered through a trapdoor in the roof, plus there were no railings anywhere which meant certain death if you lost your footing. We visited other places that smelt so rank you could hardly breathe. One bathroom we examined was literally overflowing with the current tenant’s turds. I think that one was US$10,000.

The higher up the hill you go the cheaper housing becomes

After much stuffing around I finally decided against anticrético. The only livable places I could find within my price range were traspaso which could be a problem because I don’t yet have a reliable source of income.

Having said all that, if you are living in Bolivia and earning a reliable income, anticrético is a great option. Just remember to do everything with a trusted lawyer and insist on Derecho Reales. In La Paz, nice apartments in Sopocachi start from 30K, whereas decent places in San Pedro or Miraflores can be found from 25k. Livable 1 bedroom flats can be found for 15K just outside the city center if you look hard enough.

Apartments in large buildings tend to be of a higher quality. source: gringoinbolivia