How Do You Bring $ To Buy Real Estate In 2016

[nikad]

Can you please share why you are convinced this is a good moment?

My feeling is that is inflation drops and mortgage loans gain momentum prices will go up as there will be more demand. I am not thinking that this is the best moment to buy as an investment, but if you were waiting for prices to drop even lower... I don't think it will happen is the short - mid term.

 

[rickulivi]

Nikad: You asked "Can you please share why you are convinced this is a good moment?

In answering your question, first a bit of disclosure. I am not a real estate agent nor broker, so I don't have a vested interest in the subject; I just happen to have experience buying and managing real estate, and have a very good track record over several decades. I have good intuition and also a good understanding of the economics of real estate.

Why will BA prices go up? My bet is based on intuition, of course, and several beliefs. Intuition, like love, is hard to explain but you know when you feel it.

For more rational reasons, there is going to actually be a "lluvia de dolares" into ARgentina. This will create jobs, and employment growth is a key predictor of real estate prices. The world is awash in money and low interest rates, and highly indebted countries. However, Argentina has low debt and a huge appetite for debt. Thus, money will flow in strongly as it has been doing lately. Provinces have been borrowing like crazy, and so has the federal govt. And interest rates in dollar terms for Argentine debt are dropping significantly and will continue to do so, opening even more investment opportunities. For example, the Bonar 24 was yielding over 9% one year ago, and you can only find it for 6% or less now. That's a huge drop in rates in dollar terms.

The Banco Nacion's mortgage plan is outstanding for a country with Argetina's history. I do not like the plan offered by the Central Bank. La Nacion's payments cannot go up by more than average salaries, so if you belong to a union, you are more or less guaranteed that your initial monthly payment will continue to be predictable for the life of the loan. That's a huge, huge plus. With the housing shortage, this plan should help housing take off.

The removal of the cepo and all the other unnecessary constraints to the free flow of money will be a boon too.

Finally, Macri and his team are the human element. In any investment opportunity, the quality of the management is a key issue to evaluate, and I think this team is a big plus.

In sum, I think it's a great time to buy in ARgentina but a terrible time to buy in the USA. Not part of this question, but I thought I would add that comment!

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[Ceviche]

Rickulivi

Loved your post.

Can you tell us, more basis your experiences

aa) Which barrios to buy for investment purposes?

bb) what should be a typical budget for investment purposes

cc) How does one qualify for banco nacion loan?

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A friend of mine, local Argentine..born and bred abroad but living in BA for 15 yrs..says that he would invest every penny he has in Argie real estate as everything will multiply. He owns 4 apartments in monserrat /san telmo area. Each costing 50k usd each and each he bought on mortgages.

 

[rickulivi]

Ceviche

Thank you for your compliment.

Which barrios to buy? Generally, the most expensive barrios will see the greatest percentage appreciation. However, the most expensive barrios tend to be out of reach for most people. For example, a few weeks ago we look at a 60 metros one bedroom unit located on Avda. Alvear and the asking price was $360,000. wow! So, buy where you can afford. When the tide rises, it rises everywhere, but more in some areas than others because of unique circumstances. We saw another 50 metros studio on Montevideo and the asking price was around $250,000. Crazy.

Why am i indicating that prices are crazy in some areas and yet suggesting you buy? It seems to me that sellers are anticipating higher prices, and therefore, they are asking for more. In a way, this might become a self-fulfilling story.

What should be a budget? I would not buy to rent; the economics are very difficult in BA. Prices can be 25 times, or more, than annual rents, so that's kind of ridiculous to pay that. You are better off buying a Bonar 24. But, if you are planning to live in BA, and buying with a long term hold in mind, buy the most expensive barrio you can afford, and don't go broke doing it. However, I would stay away from Puerto Madero; my personal view.

Banco Nacion. Go visit them for details or do a web search. It's the best mortgage plan I am familiar with in BA.

My wife and I own an apartment in BA and we don't want to buy another one, because as a rental, it does not make that much financial sense. But I did make an offer on a small hotel, which was not accepted. I see a good future on a well located hotel.

Nikad's initial comment was about buying for her own use, not as a rental, and that's where I would encourage you to do so too.

 

[Somewhereinba]

The important issue is that when you buy for your own use you obviously buy/sell into the same market... So - if you buy a $250,000 property now and sell it for $400,000 in 5 years you will be buying into that same market that appreciated in price meaning you can only afford a similar property to what you are selling. This is unless you plan to live in a tent or move to another country where your new found wealth is worth more than Argentina.

 

[nikad]

The important issue is that when you buy for your own use you obviously buy/sell into the same market... So - if you buy a $250,000 property now and sell it for $400,000 in 5 years you will be buying into that same market that appreciated in price meaning you can only afford a similar property to what you are selling. This is unless you plan to live in a tent or move to another country where your new found wealth is worth more than Argentina.

I want to buy something to live in for a few years here and then we will most likely be moving to the US, so if prices go up here, it will be good for me.

 

[nikad]

If you are bringing savings into the country ( US citizen / Arg perm resident ) anybody knows what you need to show to the bank here or the notary at the time of buying? I have heard about a letter from your foreign bank or so, but I am not quite sure.

 

[jbeas176]

10 years ago I showed a financial statement for my US accountant.

 

[D.B. Cooper]

Somebody started a similar thread about this subject earlier this year. Good luck.

http://baexpats.org/topic/35406-non-resident-american-buying-apartment-need-some-advice/page__hl__+casa%20+puente#entry329015

 

[gverd]

If you are bringing savings into the country ( US citizen / Arg perm resident ) anybody knows what you need to show to the bank here or the notary at the time of buying? I have heard about a letter from your foreign bank or so, but I am not quite sure.

I have been told by a notary that I basically have to "convince" them. The same notary asked be for a letter from a lawyer or accountant legalized by apostille and translated and legalized here too. But I too have read that a bank letter is enough ... so I'm now shopping around for another notary to see what they say.

The bank today told me I had to speak to Depto Comercio Exterior 0810 999 9090 for any transferral of funds INTO argentina and that they would indicate which forms to fill out and would probably ask for a bank statement. But, I think I'm going to wait until I find an escribano with some experience in these matters,