Foreigners with property in BA

[danc]

We live in the USA, but we're in BA about 4 times a year. When its not rented its empty or we're in it, but in the year we've had it on the rental market its only been vacant for about 6 weeks. The management company we use is: http://www.livinginbaires.com/ing/sistemaListado.php

 

[soulskier]

Where else are you going to find a sweet little apartment in a high end part of a world class city for under a 100K? We have had our apartment on the short term rental market and had it rented about 85% of the time. So, yes opurtunites most certainly exist, just do your homework!
85% during in boom period. I would like to wait for 2008 and 2009 to make that call.

We purchased our apartment in January of 2005. Since then it has gone up about 20% in value and made a nice monthly profit after expenses. Why wait until 2008 or 2009 to reflect back when the track record of over 2 years has already shown it to be a wise investment? Please explain, I am not following you, thanks.

 

[Granadaiscool]

Because Argentina is due for another crisis in 2008 or 2009. It has been like that for 200 years and it will happen again. Even if that does not happen inflation will soon kill the influx of foreigners, and that leaves you almost without clients. If the USA economy crashes Argentina will be doomed as well.
Nice that your value has gone up with 20% but it does not say anything. It does say anything if you sell it and have the dollars on your US account. Before that it´s air.
Expensive appartements don´t sell easy, imagine if the economy is going bad as well.
If you indeed receive an offer of 120% I would sell it yesterday. You don´t live in Argentina and you can easily rent a really nice place for 1000 dollar a month for the times you are in Argentina.
But anyway I don´t think you really have bought your appartment to really make a profit and you will keep it either way

 

[soulskier]

Because Argentina is due for another crisis in 2008 or 2009. It has been like that for 200 years and it will happen again. Even if that does not happen inflation will soon kill the influx of foreigners, and that leaves you almost without clients. If the USA economy crashes Argentina will be doomed as well.
Nice that your value has gone up with 20% but it does not say anything. It does say anything if you sell it and have the dollars on your US account. Before that it´s air.
Expensive appartements don´t sell easy, imagine if the economy is going bad as well.
If you indeed receive an offer of 120% I would sell it yesterday. You don´t live in Argentina and you can easily rent a really nice place for 1000 dollar a month for the times you are in Argentina.
But anyway I don´t think you really have bought your appartment to really make a profit and you will keep it either way

So you believe another crisis is coming even though the peso isn't pegged to the dollar like in 2001? Even if inflation creeps up, don't you believe foreigners will still come to a city where things cost at worst, half of what the cost in their country?
Our apartment is not expensive, and remains under US$100,000 even with the 20% gain.
I do live in Bariloche, Argentina and of course we bought the apartment to make a profit, why else would one buy an apartment?

 

[Granadaiscool]

To live and/or stay there when you are in BA.
Argentina is not half as cheap as for example the USA. BA is about 20% cheaper now then Holland and I earn in Euro´s. I would think that you spend about the same if you earn in dollars.
And yes I think there will be a crisis, and i am not the only one who thinks that.

 

[perry]

Regarding property prices and further economic crashes due for Argentina . History does not always repeat itself . In the 1930s when the great depression devasted the United States Argentina did not suffer very much at all in actual fact it done like a bandit in those years.
Property prices in Buenos Aires while they have increased substantially since 2002 and are at record highs .
Does that mean they will not continue to grow . Its a question of supply and demand and if the current market is an indicator its very strong and this is in a traditionally bad selling period.
Lets wait and see

 

[bigbadwolf]

So you believe another crisis is coming even though the peso isn't pegged to the dollar like in 2001? Even if inflation creeps up, don't you believe foreigners will still come to a city where things cost at worst, half of what the cost in their country?

Argentina goes through periodic crises and the factors behind these systemic crises remain in place today. It therefore behoves every foreign investor or resident to factor this into his calculations. The last crisis had something to do with the peso being pegged to the dollar (but even more to do with more traditional causes such as deficit financing and a moribund economy that was getting artificial steroid shots), but previous crises have not had even this excuse. The present Kirchner administration, like previous ones, has its head firmly ensconced up its backside with regard to admittedly intractable economic problems.
I don't want to get into the debate about the viability of investing in Argentinian real estate, but any market has only so much upward momentum. The prime time to get into the Argentinian market was probably 2002, or even 2003. Other than the limited upside, it also appears the government is becoming increasingly strict with transfers of money and accounting for rental income. In my humble opinion countries such as Chile and Costa Rica are probably safer bets and they do have a more friendly business climate.

 

[Granadaiscool]

Regarding property prices and further economic crashes due for Argentina . History does not always repeat itself . In the 1930s when the great depression devasted the United States Argentina did not suffer very much at all in actual fact it done like a bandit in those years.
Property prices in Buenos Aires while they have increased substantially since 2002 and are at record highs .
Does that mean they will not continue to grow . Its a question of supply and demand and if the current market is an indicator its very strong and this is in a traditionally bad selling period.
Lets wait and see

So it´s a buyers market now instead of a sellersmarket?

 

[soulskier]

I think the fact you can still buy a nice little apartment for under 100k in great neighborhood a world class city is unheard of, virtually anywhere else in the world, and should not be overlooked. How much can it really fall versus the potential to grow? Chile and Costa Rica for example, which both don't compare to BA, are definelty a lot more for a similar property.
Granadaiscool, FYI, BA is about a third of the price as the US at the moment, restaurants, cab rides, events, etc. Some things like electronics are obviously more expensive.

 

[realba]

Regarding property prices and further economic crashes due for Argentina . History does not always repeat itself . In the 1930s when the great depression devasted the United States Argentina did not suffer very much at all in actual fact it done like a bandit in those years.[/quote] wow, that's quite some historical revisionism... from wikipedia: "These years of prosperity ended with the Crash of 1929 and the ensuing worldwide Great Depression. The Argentine military forced aged Hipólito Yrigoyen from power in 1930 and ushered in another decade of Conservative rule. The collapse of international trade led to an industrial growth focused on import substitution, leading to a stronger economic independence (relatively, because oil production in the country was dominated by foreign companies, mostly from the U.S., something that Yrigoyen wanted to stop and one of the reasons of the external support to the military coup). At the same time, a climate of increasing political conflict arose, with confrontation between right-wing fascists and leftist radicals, with military-oriented conservatives controlling the government. Thanks to fraudulent polls, Roberto Ortiz was elected president in 1937 and took office the next year, but due to his fragile health he was followed (de-facto in 1940; de-jure in 1942) by his vice-president Ramón Castillo. Argentina was officially neutral during most of the World War II; the public remained divided, however the military governments that ruled between the years 1943-1946 favoured the Axis Powers, although towards the end of the war Argentina entered on the Allied side." The Great Depression was the beginning of the end, unfortunately, of Argentina's wealth and prospects. Before the Depression, Argentina was heavily reliant on Britain for economic support and trade (the british influence in Argentina was huge-trains, schools, football clubs and more were built/introduced by the British, the only Harrod's outside of London was in BA and cars circulated on the left until Peron changed that- for just a few examples). After recovering from the depression, britain had more important matters on hand in 1930s Europe and then after WW2 the USA took over as the most powerful/important country. Britain never recovered its world economic role nor its importance and so effectively stopped investing so heavily in south america. Any money argentina made after the crash and during WW2 as the world's bread-basket was subsequently squandered by a series of incompetent governments. The Depression may have made argentina a little more economically independent, ("The collapse of international trade led to an industrial growth focused on import substitution, leading to a stronger economic independence"-sound familiar?) but it also ushered in the next 80 years of corrupt, incompetent governance-democratic and military- that still blights the country.