Buying appartements for temporary rental

[mini]

Thanks

I was thinking about buying in 2 appartmentsblocks because that way you are more protected for fast raising expenses. The places I have checked out all have different levels of expenses, there seems to be little or no common sense in that. If you buy in 2 blocks maybe only 1 raises it's expenses fast and that should help your rentability.

I have been thinking about buying everything in the same barrio because it's easier to manage if you live close. I don't know yet if you can promote different barrios different and maybe attract different kinds of crowds.

I also have been thinking about buying close(within 2-3 blocks) of some major university campus and to contact them but I have no experience with that

I am watching the prices now and they are dropping fast now, especially from expats who want to get out of the country. I think if you have cash it's probally not a bad time to buy in about 6 months. Tourism should rebound some day(once the global recession ends) and if you are already in the country it gives you an edge.

I would also like to hear opinions about what type of appartment you should buy and if you should buy different types of appartments

I don't know. I would avoid buildings with elevators &/or pools. These tend o be the most expensive things to maintain. Plus, if you buy a house, you can make 5 apartments in it of more or less varying size and you can live in the building. You are the care taker & don't have to hire someone to do this, which is the other very costly expense. I would go with apartments that are the same size, studios & one bedrooms, then you are marketing to the same audience. You don't have to market to families and singles and students and tango goers and etc.

Personally, I would stay away from universities.

 

[steveinbsas]

Thanks

I was thinking about buying in 2 appartmentsblocks because that way you are more protected for fast raising expenses. The places I have checked out all have different levels of expenses, there seems to be little or no common sense in that. If you buy in 2 blocks maybe only 1 raises it's expenses fast and that should help your rentability.

I have been thinking about buying everything in the same barrio because it's easier to manage if you live close. I don't know yet if you can promote different barrios different and maybe attract different kinds of crowds.

I also have been thinking about buying close(within 2-3 blocks) of some major university campus and to contact them but I have no experience with that

I am watching the prices now and they are dropping fast now, especially from expats who want to get out of the country. I think if you have cash it's probally not a bad time to buy in about 6 months. Tourism should rebound some day(once the global recession ends) and if you are already in the country it gives you an edge.

I would also like to hear opinions about what type of appartment you should buy and if you should buy different types of appartments

BlahBlah, you actually have posed some good questions, but they also give rise to others:

How do you know that expats who want to get out of the country are dropping their prices so fast?

Can you provide any links (craigslist, e.g.)? Perhaps those you refer to are finally asking realistic prices (that don't reflect a 20% per year increase for the last couple years).


If I had enough money to buy four or five BA apartments, but could get a 5-6% annual return from a secure investment with no additional effort, I certainly wouldn't seriously be considering buying apartments to rent to tourists in BA anytime soon....and, if the dollar falls significantly against other currencies in the next six months, it won't make investing in BA apartments more attractive, will it?

If and when Argentine people are once again "desperate for dollars" as they were briefly in early 2002, there may indeed be an additional (if not rapid) price drop in real estate, but the way the dollar is headed, I "seriously" doubt it.

As Frank Sinatra sang to Juliette Prowse in the movie CanCan: "It's the wrong time,and the wrong place."

Go ahead and buy, it's alright with me.

PS: I agree that being close to a subway line IS important, and Linea D is the ONLY one that matters if you are really concerned about renting to tourists.

 

[Joe]

If expats are selling because of problems back home it's probably only going to get worse since mortgage resets on Option ARMs won't peak for another year in the US. There was so much cheap credit pumped into the system that it will take years to bottom out, IMO.

Trying to guess the bottom is a fool's errand, just wait for the market to have several quarters of year on year advances and then you can get close to buying near the bottom.

Are there any statistics available that gives median sales prices for different neighborhoods in BA?

I've only been here for three months, but my favorite neighborhood is Palermo Soho. Seems like it has a lot of potential to become even more trendy. But I also noticed in that neighborhood there are a lot of small scale factories that will probably eventually be turned into residential, keeping the prices from appreciating quickly.

Also I've lived in two fancy modern buildings here and they both had minimal sound insulation. If I ever bought for my own place to live I would opt for a old, contrafrente apartment. The old buildings have so much more character.

 

[steveinbsas]

Are there any statistics available that gives median sales prices for different neighborhoods in BA?

Yes, weekly in the newspapers, but keep in mind that these are the prices that are stated on the escrituras and "may not" actually reflect reality.

I know from experience that the actual price paid can be stated on the escritura!

(If you insist.)

 

[Ries]

Well, I do own an apartment here, and rent it out.
And, in the course of buying and remodelling my apartment, I have rented, over 2 or 3 years, at least ten other apartments.

I am not in the business of renting, but I can tell you my opinions, which, of course, are worth what you pay.

Location:
San Telmo, Recoleta, or Palermo, if you want to rent to tourists.
I, personally, love, Villa Crespo, or Collegiales, or Boedo, or Once, or Cabillito- but I think you reduce you potential rent amount by 1/3, and you occupancy by half, if you choose to buy in those neighborhoods.
Tourists, especially first timers, want to be in one of the top 3. And really, if its a business, I would skip San Telmo, unless you have a special niche like gay tourism or decide to run a hostel. People who will drop the big bucks like to visit it on Sunday, but wouldnt want to stay there.

Size and shape:
Skip big, new buildings, and buy turn of the century charm. 1 or 2 flats per floor is the best, built around 1900. Tall ceilings, stained glass, plaster relief work, hardwood floors (well, actually pinoterra, but nobody outside of BA knows the difference) these are the features that will get you rented first, will stand out in a crowded market.
History sells.

Expect to HAVE to spend money upgrading kitchens and baths. If you want maximum occupancy, kitchens and baths sell your place. By US or Euro standards, its cheap to do- I would say new, granite countertops, new appliances (I recomend Franke) and new plumbing fixtures and grifferia are going to pay for themselves very quickly.

Dont buy cheapo furniture at EASY. Spend the same amount on antiques at the Pulgas, or the big antique stores up past Cabillito on Rividavia, and you will, again, attract more money, more repeat occupants. You can buy a particleboard with woodgrain plastic coating ropero for about $200 or $300US less than an inlaid, real wood, art noveau one, and the difference is visible even on grainy internet photos.
Cheap, tacky furniture, cheap plastic dishes and cups, bare bones appliances, it all makes a big difference when you are renting. The money you save is not, to my mind, worth it in the long run.

You are selling romance- even if you, personally, dont find the architecture, the cafes, the tango, the history, to be interesting, your potential renters do. And if you offer them the equivalent of a modern cheap apartment with Ikea furniture, while your competition is selling a romantic fantasy of turn of the century art noveau, you may get renters, but fewer, and at lower price points.

This is based on real experience. My place sells itself. I have stayed in several cheap rentals with tacky interiors, and, in each case, I did not return. Meanwhile, several other foreign owners I know, with nicely remodeled units in older buildings near Santa Fe, never have trouble renting, and at prices at the high end of comparables.

 

[BlahBlah]

Thanks Ries.

Shouldn't you be worried about 'hidden' cost if you buy an old building? And what are the chances of lets say having to pay some serious money for renovations or reparations?

 

[steveinbsas]

Thanks Ries.

Shouldn't you be worried about 'hidden' cost if you buy an old building? And what are the chances of lets say having to pay some serious money for renovations or reparations?

Wouldn't the need for most renovations be apparent when you view/inspect the property with the appropriate professionals (including an architect)?

"Hidden" problems might include electrical or plumbing repairs if you aren't careful enough in the first place. You might not discover a leaking roof until the first serious rainstorm.

 

[Ries]

Many of the newer apartments I have seen require renovation as well- if they just bought $100 peso toilets and bidets, and plastic grifferia, if they have stick on floor tiles- which is common here- the fact is, virtually every apartment for sale here needs some work- and, if you want to rent to tourists, it pays to do it right.

It is absolutely true that EVERY construction project, in every country on earth, has hidden costs, and unexpected problems. You have to figure on that going in, and budget for it.

If you dont have the cash to fix whats wrong with an apartment after you buy it, then you cant afford it. I would figure on spending a minimum of 10% of the purchase price, just on routine stuff. That is, replacing the sink, doing some wiring, buying new light fixtures, painting the place, and refinishing floors. Real renovations will cost more. Again, compared to construction costs in the USA, its quite cheap here- but you need to either know what you are doing, or find, and hire, someone who does. The exact same problems in renovation occur in NYC, Florence, Capetown, or Buenos Aires.

My point is that, if you want to rent the places out, you need to do them right, and that means learning about good local construction practices and materials, and then paying for it.
Then, of course, there will be ongoing expenses. Things will break, repairs will be needed.
Every business has expenses, and you need to be realistic about it.

 

[Recoleta Carolina]

Thanks Ries.

Shouldn't you be worried about 'hidden' cost if you buy an old building? And what are the chances of lets say having to pay some serious money for renovations or reparations?

BlahBlah,

I am confused. Here is a quote of yours from a different thread on June 15:


"It has never been easy to sell in Argentina and with rents of around .5% a month it´s never a good idea to buy if you want flexibility."

I think I had read another post of yours stating that you are happy to be renting or something similiar.

What happened?