To Sell Or Not To Sell?

[sergio]

An Argentine friend has several investment properties. This is all he has in the way of investment, future pension etc He is thinking about selling and getting the money out of the country because he is afraid that the situation could get worse and it will be absolutely impossible to sell and change to any hard currency. He has hopes of settling in another country some day if he can get a visa. Is selling a good idea? I am not sure what to advise.

 

[French jurist]

I would have expected to read "[background=rgb(252, 252, 252)]and it will be absolutely impossible to sell and change to any hard currency[/background]" a year ago.
As of now, maybe it's possible to get lucky and find a way to sell a property in USD, but many of them would be a challenge.

The real estate market is indeed weak right now, and will likely deteriorate further before it gets better, but if your friend bought those properties as an investment, it would be foolish to sell now, obviously. 2013/2014 will rather be the right time to buy, not to sell.

Since your friend is Argentinean, he/she knows even better that crisis are cyclical here, and also that real estate owned privately has always benefited from a certain kind of legal certainty (in the way that landlords never got expropriated or such... Of course remain the various restrictions, difficulties to get USD and other problems but that does not affect directly the ownership per se).

Also obviously, investing wisely is to buy low and eventually sell high (avoiding the emotional aspect), not the opposite. It all depends what motivates your friend to go to another country & also if the losses he would suffer of selling now could be compensated by potential profits buying abroad.

 

[nikad]

Not a great idea that he put all the eggs in one basket. If he sells property, what is he going to do with the money now? That is the question. If he cannot legally move somewhere else for now I would keep my property, rent it out and wait until the next government The K´s are not going to last forever.

If he can sell and get dollars, real estate prices have already touched their maximum about two years ago and are slowly adjusting, it is not a bad time to sell, as long as he has a plan B on what to do with the money.

 

[Rich One]

Sell Now in USD, and buy real estate in Florida and/or Southern Spain​

 

[French jurist]

Which country does your friend wants to move to?

 

[dennisr]

If it was I: sell now.
May sound foolish, sell now in pesos and with the proceeds purchase dollars at today's or tomorrow's blue rate? Though the transaction would seem a loss in the short term, in one year the deal would be a wash at the very least. One thing is certain and the government confirms, AR peso will be depreciated. If someone had accepted pesos one year ago for a real estate transaction and purchased blue US dollars at the June peak (~7.00) they would be money ahead today and have liquidity. Any thought that Humpty Dumpty's House ( AR economy) can instantly be put back together again with a new face in the Casa Rosada is delusional in my view. Sometimes you have to cut and run to limit your losses. Worry about getting the dollars out of the country when you have them.

Good luck

 

[Ashley]

Can you even sell now? As far as I was aware, no properties (especially those that aren't new builds) aren't shifting at all. I think that if he sells now, he might have to take a large cut or have to accept money in pesos

 

[Canick]

it is all a matter of the big picture. does this person need the cash to live? Can they let it sit and wait out the "slump"? My advice is if they are liquid enough, don't sell now, wait a few years and then see. my own time frame on selling would be 4-5 years from now, as i don't see the market reaching higher prices or that there will be lesser currency restrictions until then. But no one has a crystal ball, and at the end of the day...your guess is as good as mine. If they can't wait that long....sell and run with whatever cash as fast as you can!

 

[French jurist]

Two things occured since a few weeks, making it even harder to sell:
- The strong dollar hike
- The raise of the stamp duty


***

On a side note, I wonder if some expats making a "decent" income in USD and planning to stay here for the next +4 years have thought (or managed to) about trying to negotiate the purchase of some real estate, paying in monthly installments (in USD obviously), instead of paying a monthly rent.

 

[sergio]

To answer your questions, he wants to go to the US but he doesn't know how to get a visa. He's totally fed up with Argentina. Says the stress is too much. He can wait it out but to do that he has to cut back on his work load which means less money. He's thought of buying in Florida. He is not convinced that "bricks" are any longer secure as they used to be - says Cristina is doing her best to destroy the last refuge, property.