Budi Lake is among the few lakes of the west coast of the Americas that have seasonal inflows of sea water. Another difference to many Chilean lakes is that Budi Lake is not of glacial origin and does not lie in the Andes mountain range. Budi Lake is above a coastal plain just south of Nahuelbuta Range and north of the Valdivian Coastal Range where the Chilean Coast Range is very low.
According to the census of 2002, the zone around the lake is one the poorest parts of La Araucanía Region, Chile's poorest region in turn. The 13,275 persons who live around the lake form 3,087 families with 30 years as average age. 40% of the population is under 18 years old and 73.2% declare to be Mapuches.