Buenos Aires Net Rental Income 1.5 % Per Year....!!

[Rich One]

Clarin Reports that according to the Real Estate Board and Reporte Inmobiliario, the net rental income is 1,5 % per annum....!


http://www.ieco.clarin.com/economia/alquileres-renta-retorno-precios-inmuebles-Muscatelli_0_1245475495.html

Google translation of pertinent paragraphs.​

The significant drop in the level of profitability that are experiencing rentals, is a source of frustration for both owners and potential investors.

It happens that the income level incessantly fell back and is now at a record low 3.3% per annum in gross income and 1.49% in net income, i.e. net of all the expenses that you pay to maintain a unit.

Statistics indicate that, looking at the statistical series since 1980, (except the year 2002) this is the worst moment of the past 34 years, since the date when data exists. "In 2001- 2002 revenues also fell much but it was something temporary (a few months) by the sudden devaluation and strong asymmetries between sales prices and rentals.

 

[Killarney]

Perfect time to be a renter. Take the money you would need to buy an apartment and invest in something that actually gives a return.

 

[GS_Dirtboy]

Thanks for posting this. I don't think those numbers include temporary rents in Dollars. Also, there is a huge difference on the return of a standard, 30 m2 studio apartment in Barrio Norte (that looks like every other studio apartment in BsAs) and a unique, multi-room apartment in Palermo Uno Tower or Soho Tower.

Like any other investment you need to know the nuances of the market for location, quality/rentability, and resell value, in order to maximize your investment.

 

[Rich One]

Thanks for posting this. I don't think those numbers include temporary rents in Dollars. Also, there is a huge difference on the return of a standard, 30 m2 studio apartment in Barrio Norte (that looks like every other studio apartment in BsAs) and a unique, multi-room apartment in Palermo Uno Tower or Soho Tower.

Like any other investment you need to know the nuances of the market for location, quality/rentability, and resell value, in order to maximize your investment.

GS.... The rentability of a Palermo Uno Tower , million dollar, apartment, would be the subject of another Specialized Study..
The Specialized site "Reporte Inmobiliario" Chose a smaller size apt to make it more representative.

 

[EdRooney]

Thanks Rich for the crystal clear reminder as to why reading Clarín is an exercise in utter futility.

As per always with Clarinete, the article in question starts off with a three paragraphs of alarmist claims: Rentier profits are down! Worst time for rent profits in history! Rapid declines!... without so much as bothering to give a hint of where they are getting these frightening numbers from. The reader has to dig to the fourth paragraph before we are given the only source for the figures-- an industry website that gives no methodology for the study. Instead it just flings inflation-based numbers around without any clue as to whether they're using numbers from the INDEC, from private consultancies or from Google Random Number Generator.

For example, note how it is worded. In paragraph 2 we read:

Sucede que el nivel de renta retrocede de manera incesante y hoy está en su mínimo histórico: 3,3% anual ​

A journalist would write: XX expert reports that the level of rent... instead "reports..." is replaced with "Sucede que...". It just happens to be the case (because Clarín does not want us to research, it just wants us to accept its a priori facts).

Furthermore, an actual journalist would have found an alternative source to at least provide the reader with some kind of debate. Instead we are just given another quote from the Real Estate Chamber of Commerce, which does nothing to address the statistics but rather just a general quote supporting the initial premise.

So in essence, the author read something on the internet, called the Chamber of Commerce for a quick quote and then called it a day. And this makes for a headline in the country's largest newspaper.



In fact, the conclusions drawn in the article may be perfectly correct, but as is inevitably the case with Clarin, I have no way to verify them; I just have to take their word for it.

Periodismo de cuarta.

 

[Rich One]

Thanks Rich for the crystal clear reminder as to why reading Clarín is an exercise in utter futility.

As per always with Clarinete, the article in question starts off with a three paragraphs of alarmist claims: Rentier profits are down! Worst time for rent profits in history! Rapid declines!... without so much as bothering to give a hint of where they are getting these frightening numbers from. The reader has to dig to the fourth paragraph before we are given the only source for the figures-- an industry website that gives no methodology for the study. Instead it just flings inflation-based numbers around without any clue as to whether they're using numbers from the INDEC, from private consultancies or from Google Random Number Generator.

For example, note how it is worded. In paragraph 2 we read:

Sucede que el nivel de renta retrocede de manera incesante y hoy está en su mínimo histórico: 3,3% anual ​

A journalist would write: XX expert reports that the level of rent... instead "reports..." is replaced with "Sucede que...". It just happens to be the case (because Clarín does not want us to research, it just wants us to accept its a priori facts).

Furthermore, an actual journalist would have found an alternative source to at least provide the reader with some kind of debate. Instead we are just given another quote from the Real Estate Chamber of Commerce, which does nothing to address the statistics but rather just a general quote supporting the initial premise.

So in essence, the author read something on the internet, called the Chamber of Commerce for a quick quote and then called it a day. And this makes for a headline in the country's largest newspaper.



In fact, the conclusions drawn in the article may be perfectly correct, but as is inevitably the case with Clarin, I have no way to verify them; I just have to take their word for it.

Periodismo de cuarta.

Please write your concerns to the Clarin Editor

The Clarin article mentions figures taken from a report from Reporte Inmobiliaria , sure you read it.
http://www.reportein.../nuke/index.ph

Copyright for 678?

 

[sleazemerchant]

These figures sound quite accurate based on what I am currently paying; for some background, I have a "long term" rental with garantia in a roughly 140 square meter apartment in an ultra exclusive area of the city in which 9500 pesos per month goes to the owner. Furthermore this price was agreed upon last month so it is not yet outdated by inflation, plummeting peso, etc. Assuming an asking price of $3k USD per meter, or $420k USD the owner is only getting a gross yield of 2% (he pays ABL, his bienes personales etc).

These figures vindicate on a daily basis my decision never to even consider buying real estate in Argentina. How a financially sound of mind person could ever justify buying an awful yielding property in an illiquid, all cash market denominated in a foreign currency (that the country lacks) is dumbfounding. Even an amateur could take that $420k USD put it in instantly liquid investment grade bonds yielding 5%+ use half the coupon payment to pay the year's rent and pocket $10,000 USD annually.

 

[sesamosinsal]

I pay long-term, Argentine rental prices. In dollars at the official rate, my landlord is currently earning 13 percent less than he did when I began renting the place 3 years ago. At the unofficial rate, it's 42 percent less.

With numbers like that, no wonder I can't get him to fix the persiana in my living room or replace the kitchen sink.

But Ed's analysis of the Clarin article is spot-on.

 

[rrptownley]

The government lacks dollars.
The people of Argentina have been shrewdly saving them under the mattress for many years.