Brazilian police said Monday they were investigating after a Swedish-Iranian man who ran a hostel in a Rio slum was found dead.

"The circumstances of the death of Millad Mille Hosseini Ballai, a Swedish-Iranian, are the subject of an investigation," a police spokesman told AFP.

The spokesman said authorities were looking for witnesses following the death of Ballai, 34, adding police were awaiting the results of initial inquiries.

The body of Ballai, who ran the "Casa Alto Vidigal" hostel in the Vidigal slum near Rio's well-heeled coastal district of Leblon, was found late Saturday.

Police were sifting through closed circuit television footage of the hostel to determine if anybody saw the victim attacked.

"We have seized several items, including money which would appear to exclude the possibility of death following a burglary or an operation by an organized group," web portal G1 quoted police commissioner Rivaldo Barbosa as saying.

Barbosa said the cause of death appeared to be a neck injury.

G1 reported the police were working on the assumption the killing followed a dispute between people at the hostel who knew each other and who may have been involved in drug dealing.

Ballai had been living in Brazil for around 15 months.

Vidigal, which enjoys spectacular coastline views, was once a haven for drug trafficking and gang violence.

But it has increasingly become a tourist haunt after police moved in to "pacify" the area in 2011 as part of a wider operation begun in 2008 to crack down on crime in Rio.