Buying A Small Apartment To Be Used As Collateral

[steveinbsas]

'Tough' is a wrong word to use. But perhaps, lets say :

1. i would not want to commit a rent of 24 months in cash to someone. For example, a building has a problem or I want to shift base, I dont want to be committed to a pre-paid 24 month rent. However, if I paid month by month and decided to break the contract, I would just have to pay 1.5 months penalty and I would be out for good.

2. Handing someone 24 months rents in advance on day 1, defeats the whole purpose of using dollar fluctuations to my advantage in course of 2 years when paying month by month.

3. Few other practical issues in handing high volume of pesos on a single day.

I must say those are very good reasons!

 

[Ceviche]

On the OTHER hand perhaps for 150 K you can buy your Dream Place and forget about squatter Tenants and greedy Landlords, 2 BIG ISSUES...

will deal with tenants how my landlord deals with me! With a 'Iron fist"

I dont like properties worth 150K..I like very high end only. And I fear power, gas, water cuts ( which I have only heard about)..which I have personally never ever faced in Capital Federal in 7 years.

 

[Ceviche]

if you bring the funds to buy the "cheap" apartment into the country through the Banco Nacion at the official rate, they will lose about 30% of their purchasing power in dollars.

I don't know any expat who bought property here bought in money through banco nacion. Mostly through "other" ways.

 

[Ceviche]

revenue from a small apartment will not begin to cover the cost of renting a high end place

The only reason to buy the small apartment is to use it for "garantia".

Any rent obtained from it will be just some icing on the cake...

Some of my expat friends who are running "temporary fully furnished rental" business here , swear by the business and say its very profitable.

 

[Brunette36]

This is just an opinion, ok?

One of the main differences between a PH and an apartment is the maintenance fees. You will always have to pay ‘expensas’ if you are living in a flat. Having said that, I get the impression that it is rare to find a PH in Barrio Norte (Retiro/Recoleta). Now, if you are from another country, safety is one of the most important issues. A flat in a building is safer than a PH, I should think. You often have someone watching the building 24 hours a day.

There are plenty of PHs in Palermo. Very popular among young visitors and travellers. You need to ask yourself who your target tenant is?

I would go for a place in Barrio Norte that I can rent to people who can pay a bit more and look after the flat. There's a reason most hotels are located in Retiro/Recoleta.

I will get back to you in a bit and mention DOs and DONTs

 

[Ceviche]

I will get back to you in a bit and mention DOs and DONTs

In anticipation..

 

[Rich One]

will deal with tenants how my landlord deals with me! With a 'Iron fist"

I dont like properties worth 150K..I like very high end only. And I fear power, gas, water cuts ( which I have only heard about)..which I have personally never ever faced in Capital Federal in 7 years.

Renting a $500 K with a $100 K Garantia B) your chances go down to 1/4 Good Luck , you may charm the Landlord..!

 

[Ceviche]

Renting a $500 K with a $100 K Garantia B) your chances go down to 1/4

What is Garantia, guaranting? Rent for 2 years and perhaps (another 4 years rent + court fees) more till they are able to get you out for not paying the rent..

That would be my calculation.

Not the rent of one versus rent of the other. Rather the sale value of the small one is equally to how many years of rent on the big one. Plain and simple.

The other thing..its not that their are 100's of options for a high end apartment owner in his choice of possible tenants. The higher the rental..the tougher to rent it out.

==

The other thing is that even without garantia, so many landlords are ready to rent you a apartment if you pay rent for 12 months or 24 months in advance. If it was all about security for the landlord , what is the guarantee, I will peacefully vacate after 2 years despite paying 24 months rent in advance?

In my opinion, the garantia is just a stupid/ superficial guarantee for the landlord for recovering any unpaid rent and any court fees and waiting time to hoist you out eventually.

==

Their is a difference between a 'house squatter' who forcefully takes over a uninhabitated house versus a tenant who has done proper paper work and has pledged to pay rent. A house squatter will never pay rent and will not leave ever. A tenant has signed in front of a notary to pay rent and then suddenly he/she stops paying rent for some "sad" personal life hassles. So the owner needs to be guaranteed that till the time, the court gives a order to evict this tenant, at least the 'garantia' will help recover the unpaid rent/waiting time for eviction.

==

A tenant who has not paid rent can not just sell of the house and disappear in thin air! Its only about unpaid rent..so for 2 years of rent + 4 years of waiting time + legal fees. That would be my calculation in buying a cheaper small apartment to be be used as garantia.

 

[Brunette36]

Something most people ignore is that at least until 2013, if you bought a flat from a foreigner who had bought the property using a 'representante legal', not as a Sociedad Anonima, the buyer could pay for the property in Argentine pesos because the owner had the right to have the money transferred to a bank account abroad. Most inmobiliaria owners ignore this. I have no idea whether any changes have been implemented.

 

[Brunette36]

I wouldn't normally share this kind of info...