Apartment Rental Airbnb Rental Yields in Palermo: Comparison with Traditional Rentals

[joshuaN]

How did the repeal of the rental law impact Airbnb apartments?

https://twitter.com/x/status/1803493159235670506

 

[ranchero]

Just a few days ago, I read an article about this topic. It explained that falling prices and rising maintenance costs have eroded the profitability of the business. In fact, many owners who rented their apartments short-term decided to switch to traditional rentals, which directly impacted the supply: since December 2023, it has decreased by almost 20%. In some ways, the repeal of the law was positive, but not for this area.

Advierten que no se detiene la caída de la rentabilidad de los alquileres temporarios

La disminución de los precios y el incremento del mantenimiento erosionó la rentabilidad del negocio. Los barrios que más sufrieron el impacto

www.iprofesional.com

 

[lovelyM]

Yes, that's right! Here, I found a chart that shows the decline in short-term rentals after the DNU.

 

[VINO]

Yes, that's right! Here, I found a chart that shows the decline in short-term rentals after the DNU.

View attachment 6516

I think this has more to do with less tourists coming to BA. BA has become much more expensive since the elections.

 

[Uncle Wong]

There are way too many Airbnbs in CABA. In my building Airbnbs are not allowed but all over this neighborhood you can see many empty apartments (their persianas are down most of the time). An acquaintance, who manages several Airbnbs in CABA and zona norte, says that business is really bad now, but because sales have picked up, he's making good money on commissions.

There do seem to be a lot of Airbnbs there. I rented a unit in a building that wasn't supposed to allow Airbnb's but the owner just told us to say we were friends of his and not renting which we didn't have a problem doing but I felt bad for the owners in the building if it wasn't allowed. Me and my friend were very quiet and didn't have parties but I can see where it would be a nightmare under the wrong conditions. Can they really control it @Sunny?

 

[earlyretirement]

There are way too many Airbnbs in CABA. In my building Airbnbs are not allowed but all over this neighborhood you can see many empty apartments (their persianas are down most of the time). An acquaintance, who manages several Airbnbs in CABA and zona norte, says that business is really bad now, but because sales have picked up, he's making good money on commissions.

There is definitely a glut of Airbnb's in Buenos Aires but you have to keep in mind that about 80% of them are smaller studios or 1 bedroom units. 2 bedroom units are still renting well. I have several clients that own 2 bedrooms or larger and they are very full. I also own some apartments in Recoleta and I have a loft unit in the heart of Palermo Hollywood and it's always full each month with high occupancy. Much depends on the size, layout, amenities in the building, and especially location.

The cheaply furnished nothing special properties on the smaller side are struggling as there is so much competition. On those, it's probably better to go to long-term rentals. But a super-hosted apartment that is nicely furnished with super-fast Internet in the best parts of the city will still do ok. My apartment in Recoleta is on a longer-term lease but I constantly get people that ask me if it's available.

There do seem to be a lot of Airbnbs there. I rented a unit in a building that wasn't supposed to allow Airbnb's but the owner just told us to say we were friends of his and not renting which we didn't have a problem doing but I felt bad for the owners in the building if it wasn't allowed. Me and my friend were very quiet and didn't have parties but I can see where it would be a nightmare under the wrong conditions. Can they really control it @Sunny?

Yes, many owners still rent the units out saying it's friends/family but some buildings are getting super strict with this. But they are building new constructions where the entire building is geared towards short-term Airbnb rentals.

 

[Johnny]

The biggest problem, aside from noisy partying, is that many foreigners, especially those accustomed to suburban living, treat city apartments as if they were houses so noise is a huge problem. Hotels generally have wall-to-wall carpeting, but here, most apartments have parquet or ceramic flooring.

The last Airbnb we rented had ceramic flooring. We are quiet people who wear soft slippers indoors and put felt pads under furniture to minimize noise from chairs and tables on the hard floors. One afternoon, someone rang our doorbell. It was the downstairs neighbor. He wanted to know if we had signed a long-term contract because if we had, he would renew his contract. He explained that it had been hell for him and his wife since the apartment we were renting was turned into an Airbnb. They would hear people walking and moving furniture all the time, even very late at night, dropping things on the floor, jumping up and down, etc. He said the person who stayed in the Airbnb before us was the absolute worst. I told him to consider renting apartments in buildings with radiant floors, that type of construction helps prevent noise from traveling between units; unfortunately, though, newer buildings are not built that way nowadays.



In my building it is possible because it's just one apartment per floor and has 24 hr security. When we stayed in Recoleta, also one apartment per floor but the consorcio allowed it. Even buildings with many apartments can control it if they have 24 hr security.

I just think many of these buildings are not too well constructed in the past several years. I am not a partyer and I don't even drink any alcohol. But I went out to dinner very late and we came back very late. I rented an Airbnb in Belgrano and we would often times come back very late from the night. Sometimes 3 AM. But we were not making noise and just walking in the living room. But the neighbor told the owner of our Airbnb that we were up all hours of the night and making noise. This wasn't true.

When we came up from the elevator her dog would start barking. It got really terrible during the trip. I was there about 9 days. About the 5th day in, someone started ringing our doorbell very early like at 6 AM and keep ringing it. It was probably this neighbor. We complained to the Airbnb owner and he said this lady was crazy. We were on the penthouse floor so there was no one above us. But I think that the construction of the building wasn't good as we could hear the lady watching TV sometimes through the wall.

Thinking back, maybe this lady is the one that had a homeless person sleeping there at night. Maybe she was trying to do that to get the Airbnb to stop. I just bought a new apartment and fortunately I'm on the Penthouse level and I only have one neighbor that will be living there and not an Airbnb.

 

[Johnny]

Given that you were on the penthouse, it’s difficult to determine how loud your steps sounded to those below. This is a genuine issue. In Mexico City, we rented a fabulous place in a building that, from the outside, looked like a bunker, super solid. Our apartment was directly beneath a duplex penthouse owned by an older couple. We were informed that their three daughters were studying in the US and wouldn't be returning to live with them. For the first month, everything was great, very enjoyable, but then all three daughters returned from the US. For the remaining two months, we had to call the concierge very often to remind the girls to take their shoes off.

What the landlord "forgot" to tell us was that the duplex had all its bedrooms on the second floor, and the areas directly above our apartment were their living room, music room, kitchen and service wing, breakfast nook, and a couple of bathrooms. Their living room was right above our three bedrooms, and their music room was above our living room. Our apartment was 270 m², while theirs was double that size. Whenever they were in their living areas, we had to either wear earplugs or leave the apartment. The concierge told us that the landlord used to live in the apartment we were renting but decided to move out because of the noise.

The building was constructed in the early 90s, a time when soundproofing materials and methods were available, even in Mexico, but the builder obviously decided to cut costs.

Everyone has the right to peaceful enjoyment of their home. Every time we had to call the concierge, I felt terrible because I knew the people upstairs had no idea how much noise from their apartment permeated ours. Even if they did have some idea, it was their home, and they weren't doing anything wrong. What is truly wrong is that builders can get away with constructing buildings, even luxury ones, with no soundproofing.

Hello Sunny. That sounds like the exact scenario that we faced. I'm sure that others in the Airbnb might have been loud or had parties but we did not at all. I do admit we were coming home very late but people should be able to walk around in their own apartments no matter how late it is. The building wasn't a new one. It was probably around 30 years old but you are right we couldn't hear anyone so maybe it was loud but I'm not sure what else we could have done. We did take our shoes off when we entered.

It sounds like the same situation as you. I'm sure those 3 girls weren't partying at all but just living normal life. I just wish the neighbor below could know that just everyday living. It's a shame buildings are build so poorly.

 

[Betsy Ross]

Hello Sunny. That sounds like the exact scenario that we faced. I'm sure that others in the Airbnb might have been loud or had parties but we did not at all. I do admit we were coming home very late but people should be able to walk around in their own apartments no matter how late it is. The building wasn't a new one. It was probably around 30 years old but you are right we couldn't hear anyone so maybe it was loud but I'm not sure what else we could have done. We did take our shoes off when we entered.

It sounds like the same situation as you. I'm sure those 3 girls weren't partying at all but just living normal life. I just wish the neighbor below could know that just everyday living. It's a shame buildings are build so poorly.

The older buildings here are built much better quality of construction and insulation. Many of the newer buildings aren't as well insulated. I have some friends where I will go to their apartments and I can hear everything above. That would be very annoying. I live in an older building and I can't hear any of my neighbors.

 

[Larry]

There's also this other issue that makes Airbnb problematic in residential buildings, the transient nature of guests. In buildings where all apartments have similar layouts and no duplex penthouses, even when the construction is not that great, residents can typically become accustomed to the regular noises from their permanent neighbors. Consorcio meetings also play a role in fostering awareness and tolerance.

Large Airbnbs that advertise multiple beds attract large groups who are going to be louder than usual during their vacation stays. The woman who complained, who knows what she's been putting up with from other Airbnb guests. Also, between bookings, Airbnbs might stay empty for several days or even weeks. When new guests arrive, neighbors suddenly go from hearing nothing to what feels like a lot of noise, even if the guests aren’t really that loud.

The owner of that penthouse should install wall-to-wall carpet in the lower level or stop renting it as an Airbnb. If I lived below such a penthouse and faced constant disturbances, I would consider legal action against the owner.

I think Airbnbs should only be allowed in buildings specifically built for commercial use.

Good point about it being empty for some time and loud guests but if someone is just walking in the living room with no shoes on there isn't really any complaint an owner can make. Maybe they were bothered that their dog woke up barking but I don't think I would do anything at all if a neighbor was complaining and I was just walking around late at night.

If someone is having a party or making a nuisance but I believe @Johnny if he said he wasn't loud. Many people here in BA are totally unreasonable and out of touch with reality.

 

[earlyretirement]

There's also this other issue that makes Airbnb problematic in residential buildings, the transient nature of guests. In buildings where all apartments have similar layouts and no duplex penthouses, even when the construction is not that great, residents can typically become accustomed to the regular noises from their permanent neighbors. Consorcio meetings also play a role in fostering awareness and tolerance.

Large Airbnbs that advertise multiple beds attract large groups who are going to be louder than usual during their vacation stays. The woman who complained, who knows what she's been putting up with from other Airbnb guests. Also, between bookings, Airbnbs might stay empty for several days or even weeks. When new guests arrive, neighbors suddenly go from hearing nothing to what feels like a lot of noise, even if the guests aren’t really that loud.

The owner of that penthouse should install wall-to-wall carpet in the lower level or stop renting it as an Airbnb. If I lived below such a penthouse and faced constant disturbances, I would consider legal action against the owner.

I think Airbnbs should only be allowed in buildings specifically built for commercial use.

I've fought many HOA's and administrations when they tried to ban short-term rentals. Unless it is forbidden in the HOA rules when you buy a property, I don't think a building should be able to restrict it. And if so, they should have documented cases. When I owned a large property management company in Buenos Aires, we never had issues because we had very strict rules for guests which included NO parties, no loud noise and clear terms of eviction if they broke these rules. We didn't have problems. When we found someone violating the rules, we would act swiftly. We communicated well with neighbors and the administration and they really appreciated it.

The problems arise when Airbnb owners don't have any oversight and set no expectations with guests on the front end. I own several properties and don't have issues with my guests because I make it very clear on the front end before they book and after that we are strict with this and give them the option to cancel if they are going to break this rule.

I successfully fought several administrations in Buenos Aires over the years. However, one that we did not win was in a building where there were tons of owners in rental properties. Most of which did not control their guest. One set a fire on the roof. Another urinated in the elevator. Although all our guests were excellent, these other owners didn't control their guests. This was pre-Airbnb so owners were just booking direct or through property managers.

In Mexico, I had buildings that tried to ban short-term rentals and I was successful to fight them on it. I put in place clear rules that the building should follow and helped them structure short-term rentals and the buildings haven't had any issues. But definitely I would get angry if I was living in a building and there were noise or party issues. But the thing you have to do is set expectations on the front end.

Fortunately I've found construction to be very good on new construction in Mexico. I bought my first apartment there 6 years ago and all have been totally new construction and build quality is great. You can't hear any noise at all.

In Buenos Aires, on new construction mostly it isn't that great. And I don't buy in any buildings now that aren't zoned for short-term rentals. There is nothing worse than buying an apartment to be used for a short-term rental and then have the building ban them. Typcially a building to change the by-laws has to vote to change the by-laws but can be changed with majority vote. Several buildings now are successful in changing the by-laws to ban them.

 

[earlyretirement]

We booked a 2-bedroom Airbnb in Miyana (Polanco, CDMX), on the 17 floor, I think, it was a 30-story, about a year old building. Our apartment was right next to the elevators - there were four elevators, and we heard no noise at all. The apartment layout was great too; the TV room was close to the door, I was afraid that we'd hear the elevators or the neighbors but no, not at all. A few times I heard a very faint noise coming from the apartment above, but I have very sensitive hearing (it's a curse, really). I think that, of all the new buildings we stayed at since we started using Airbnb, I guess 14 years ago, Miyana was the very best. The only bad thing: the dog park on the second level, it was hell early in the morning when a few regulars would let their dogs bark nonstop.

That's a great area @Sunny. I really love Polanco. The area around Parque Lincoln is my favorite. I usually always stay in that area. I've found the newer buildings are built to code to withstand possible Earthquakes and quality of construction is really great. I've purchased a few apartments in Guadalajara and one In Puebla and just bought one in Cabo that they are building now.

I'm not sure I would like a dog park, however. My apartment in Puebla is on the 19th floor just under the Penthouse and the dog park below I never have heard any dogs at all. Like you @Sunny I have sensitive hearing and also have severe insomnia. Not a good combination.

 

[fool in love]

I went to see a few different apartments. Luckily I don't hear the person above me but in 2 of the units I went to I could hear the people on the same floor next to my apartment. The walls are so thin.

 

[earlyretirement]

Do you see lots of Korean and Chinese IT workers in Puebla? When we stayed at Myana, most of the apartments were rented by people of those nationalities, many of them had been living there for at least five years, and they all had dogs. Between 7:00 and 8:30 AM the barking was really bad. Sometimes the security people would intervene but it kept happening.

No, I haven't had any. I almost have all American tourists and Mexican corporations that are sending their employees to Puebla for business. Or Mexicans that are living in the USA that are going back to visit their families living there. I'd say stay is split 50%/ 50% corporate vs, tourists.