Puerto Varas is a small city on the southern shores of Lake Llanquihue about 20km north from Puerto Montt. The city was built by German immigrants who were invited to colonize southern Chile in the mid 19th century. The German architecture, culture, and traditions are still very noticeable here.
Puerto Varas is now a tourist venue mainly catering for outdoor and adventure activities. It is a great base for exploring the surrounding national parks.
The city itself is very easy to explore by foot. You can walk from one side of town to the other along the lakeshore in under 30 minutes.
If you want to see some of the wooden colonial homes built by German immigrants walk to the main downtown area and along Del Salvador (walking away from the lake) and then turn left up San Ignacio. Just past San Luis, you will see Casa Yung (built 1930). There are lots more examples of these houses dotted around the cityYou can go to Parque Phillippi from where you will have an excellent view (on a clear day) down to the city of Purto Varas and across to the snow-capped volcano.
The church of Iglesia del Sagrado Corazon de Jesus is perhaps the most emblematic building in Puerto Varas. It was built in 1915 and modeled on similar churches from the Black Forest area of southern Germany. It is made entirely of oak.
You can go to Lago Todos los Santos and Petrohue from Puerto Varas to the east.
Around Lago Llanquihue you can visit the waterfalls of Salto de Petrohue. (entrance 1,200 CPL).
The road has recently been built so a small section is still unpaved. It is recommended to not attempt this without a 4×4 and after heavy rain.
You can also enjoy the view of the Osorno Volcano and then continue to the shores of Lago Todos los Santos, described by locals as the most beautiful lake in the world. If you arrive here early enough, you will be able to take a boat trip onto the lake and to Puella, the eastern shore of the lake. This place can somewhat be touristy/busy but tune it out and enjoy the extraordinary views. You can check the boat times in your lodging.