Rent options in BA

[sts7049]

good you will have a contract. the payment in pesos is certainly more in your favor i think, although i'm not sure i would want to sign a 2 year lease right now given the flux happening in the markets. prices could come down in a years time and you might find you are paying above market. just something to think about.

 

[Rich One]

Hi all. My rent is up in April. My landlord wants 850,000 pesos with an increase every 3 months based on the consumer price index here (IPC) vivienda.buenosaires.gob.ar/calculadora_alquiler
My other option is to pay upfront 6 months at $850 dollars a month ($5100) in cash.
I transfer money here via WU.
Any opinions on which option would be in my favor?

One must figure out that the monthly inflation for a 3 month period compounded may reach around 40%.
Say 850.000 x 1.4 = 1,190.000. How many dollars will this amount be? will the dollar go up 40 %..!

Some tenants have agreed to a fraction of the IPC , say 50 %. You can counteroffer.

 

[Macanudo]

Current WU rate 1,064.50
Blue dollar chart https://bluedollar.net/informal-rate/
If you pay in dollars, you're locked into a fixed rate. If you pay in pesos, you get a variable rate with adjustments every three months. Which are you more comfortable with? With the crazy recent rate volatility, it's almost impossible to predict accurately what will happen in the next two years.

 

[Shane]

Right, this is my concern. The last 3 months the IPC shows an increase of 36%, but the WU rate has not nearly increased that much in the last 3 months, so I would stand to pay a lot more in pesos if the same trend continues

 

[Rich One]

Right, this is my concern. The last 3 months the IPC shows an increase of 36%, but the WU rate has not nearly increased that much in the last 3 months, so I would stand to pay a lot more in pesos if the same trend continues

Good for you , some real state agents charge a commision of 20 % of the entire contact, it's illegal..!
This commision amounts to, on a 24 month contract, to 4. 8 months monthly rental..!

 

[Grasshopper]

Current WU rate 1,064.50
Blue dollar chart https://bluedollar.net/informal-rate/
If you pay in dollars, you're locked into a fixed rate. If you pay in pesos, you get a variable rate with adjustments every three months. Which are you more comfortable with? With the crazy recent rate volatility, it's almost impossible to predict accurately what will happen in the next two years.

Macanudo - I'll begin looking next month for my first (unfurnished) apartment in Buenos Aires,
and will want to pay rent in USD. What's your sense of getting agreement from an owner on a set USD price locked in (no crazy increases)?

 

[Rich One]

Macanudo - I'll begin looking next month for my first (unfurnished) apartment in Buenos Aires,
and will want to pay rent in USD. What's your sense of getting agreement from an owner on a set USD price locked in (no crazy increases)?

Earlier this year some owners asked for peso rent payment adjusted quarterly by the CPI Consumer Price Index. The dollar was then frozen.

 

[LuckyLuke]

Hi all. My rent is up in April. My landlord wants 850,000 pesos with an increase every 3 months based on the consumer price index here (IPC) vivienda.buenosaires.gob.ar/calculadora_alquiler
My other option is to pay upfront 6 months at $850 dollars a month ($5100) in cash.
I transfer money here via WU.
Any opinions on which option would be in my favor?

Howdy Shane,

The answer to your question is a complex calculation. The website you reference is the ICL, which is a combination of the IPC (average inflation) & Ripte (average salary). Knowing whether to pay in pesos or dollars require projecting out the ICL and the Dollar that western union uses (MEP/CCL minus fees).

Since nobody knows the future, these projections take some guestimation. We can take the most recent IPC % and project it out as the same each month to be safe (it may decelerate further). The existing ICL % for June is 9.46% or 113.52% annually.

The dollar of course is a mystery as well. But let's say that it follows the last six months of activity (5.28% growth monthly). You would get some numbers like this:

Date	WU Exchange Rate (afer fees)	Dollar % Increase	Base Rent	IPC Index (Monthly)
7/29/2024	1,204.00 ₽	5.3%	850,000.00 ₽	9.46%

Frequency	Initial period	First Adj Avg	Second Adj Avg	Third Adj Avg	Total Contract Avg
Monthly	$ 705.98	$ 733.98	$ 763.09	$ 793.35	$ 1,144.62
3 Months	$ 671.14	$ 738.27	$ 812.12	$ 893.35	$ 863.10
6 Months	$ 623.10	$ 717.14	$ 812.12	$ 949.95	$ 778.89
12 Months	$ 581.07	$ 621.86			$ 581.07

 

[LuckyLuke]

Keep in mind, there are 4 points of negotiation in the contract:

1) The currency
2) The base rent
3) The adjustment interval (which is very important because of the compound interest effect)
4) The total contract duration

You'll have to clarify more what the dollar option is. Is it $850 per month for 2 years? Why is 6 months needed upfront if you choose a dollarized contract?

 

[Ceviche]

easiest way is to pay in usd one amount for whole contract via bank transfer from abroad to abroad.