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Apartments in Almagro rented at the price of Palermo - La Nación Propiedades
Source:
www.lanacion.com.ar
August 17, 2023
Candelaria Reinoso Taccone
Plaza Almagro, one of the few green places in this neighborhood
When buying a property, if one does not plan to make the investment to live, one must ask oneself about the profitability that can be obtained by renting it. What level of income can I expect? How long will it take to recover what I invested?
In the city of Buenos Aires, when the profit generated by rent is analyzed according to the area in which an apartment is located, a very clear conclusion is reached: the profitability panorama experienced a significant change.
Studio apartments lead in terms of profitability
Based on data collected through July 2023 by Real Estate Report, the comparison between data from July 2022 and July 2023 reveals a substantial increase in the average annual gross profitability of used one- to four-room apartments. In July 2022, this figure stood at 2.98%, while in July 2023 it reached 4.76%. This increase of almost two percentage points over the course of a year reflects an upward trend in the profitability of the real estate market in the city.
A more detailed analysis shows that studio apartments lead in terms of profitability at the beginning of rental contracts under the new three-year law for used units. These provide an average income of 5.48%, followed by the 1-bedrooms with 5.02% and the 2-bedrooms with 4.4%. The largest 3-bedroom units show lower profitability, standing at 4.19% in July 2023.
In Almagro, the average figure to rent a studio apartment is $192,500.
When analyzing profitability in CABA, an additional conclusion stands out: neighborhoods with more affordable prices per square meter to buy tend to offer more attractive annual returns compared to areas where the value per square meter is higher.
This inverse relationship between property price and profitability highlights how investment can be influenced by the intrinsic value of the property in each location. Neighborhoods such as Almagro, Chacarita and Villa Urquiza, which present more modest prices per square meter, exhibit higher profitability compared to premium areas such as Palermo or Barrio Norte, where the costs per square meter to buy are higher and, consequently, the profitability is affected.
Something extremely striking is the surprising disparity in the Almagro real estate market. This neighborhood allows you to purchase a one-bedroom apartment at a price comparable to that of considerably cheaper areas, such as Flores, where the value of a one-bedroom apartment is set at US$63,000 or San Telmo with US$65,000. However, what really stands out is that, despite this relative affordability in purchasing, Almagro manages to achieve rental levels almost comparable to those of the coveted Palermo neighborhood. While renting a studio apartment in Palermo is around $200,000, in Almagro the average figure is $192,500. It is even more surprising when considering that the sale price of this typology in Palermo is US$93,450 vs. the average US$63,000 in Almagro.
The current recovery is due to two factors: the increase in rents and the decrease in sales prices.
Currently, on average for the entire city of Buenos Aires, it takes approximately 19.1 years of rental to recover the investment, 26% less than what was required a year ago. Compared to 2020, a year of historic lows, profitability levels in Buenos Aires are recovering and are increasing in all areas of the Federal Capital.
The current recovery is due to two factors: the increase in rents, with a cumulative increase of 89.6% in 2023 and 152.9% compared to July of last year; and the decrease in sales prices, with a cumulative drop of 2.1% this year and 23.2% from the highs of 2019, where a square meter cost around US$2,800, now reduced to US$2,153. In short, purchase prices have decreased while rents have increased, generating a higher level of profitability. However, it is advisable to take precautions.
Firstly, the evaluation of profitability in real estate investments covers multiple factors in the current context. Rental prices, based on listings, do not always reflect actual transactions. The new rental law impacted prices and created an informal market. Additionally, long-term property value is crucial; Expensive areas tend to preserve their value better. Limited supply equals rental income, which can increase profitability in lower-cost areas. Demand and external factors such as fashion also influence. In summary, profitability is variable and depends on multiple conditions in an uneven market, so caution is advised in investments.
Candelaria Reinoso Taccone
Source:
Cuál es: el barrio donde un departamento cuesta como en Flores pero se alquila al valor de Palermo
Un análisis del mercado revela que Almagro desafía las expectativas al ofrecer rentabilidades equiparables a zonas premium de Buenos Aires.
www.lanacion.com.ar
August 17, 2023
The neighborhood where an apartment costs the same as in Flores but is rented at the price of Palermo
A market analysis reveals that Almagro defies expectations by offering returns comparable to premium areas of Buenos Aires.Candelaria Reinoso Taccone
Plaza Almagro, one of the few green places in this neighborhood
When buying a property, if one does not plan to make the investment to live, one must ask oneself about the profitability that can be obtained by renting it. What level of income can I expect? How long will it take to recover what I invested?
In the city of Buenos Aires, when the profit generated by rent is analyzed according to the area in which an apartment is located, a very clear conclusion is reached: the profitability panorama experienced a significant change.
Studio apartments lead in terms of profitability
Based on data collected through July 2023 by Real Estate Report, the comparison between data from July 2022 and July 2023 reveals a substantial increase in the average annual gross profitability of used one- to four-room apartments. In July 2022, this figure stood at 2.98%, while in July 2023 it reached 4.76%. This increase of almost two percentage points over the course of a year reflects an upward trend in the profitability of the real estate market in the city.
A more detailed analysis shows that studio apartments lead in terms of profitability at the beginning of rental contracts under the new three-year law for used units. These provide an average income of 5.48%, followed by the 1-bedrooms with 5.02% and the 2-bedrooms with 4.4%. The largest 3-bedroom units show lower profitability, standing at 4.19% in July 2023.
In Almagro, the average figure to rent a studio apartment is $192,500.
When analyzing profitability in CABA, an additional conclusion stands out: neighborhoods with more affordable prices per square meter to buy tend to offer more attractive annual returns compared to areas where the value per square meter is higher.
This inverse relationship between property price and profitability highlights how investment can be influenced by the intrinsic value of the property in each location. Neighborhoods such as Almagro, Chacarita and Villa Urquiza, which present more modest prices per square meter, exhibit higher profitability compared to premium areas such as Palermo or Barrio Norte, where the costs per square meter to buy are higher and, consequently, the profitability is affected.
Something extremely striking is the surprising disparity in the Almagro real estate market. This neighborhood allows you to purchase a one-bedroom apartment at a price comparable to that of considerably cheaper areas, such as Flores, where the value of a one-bedroom apartment is set at US$63,000 or San Telmo with US$65,000. However, what really stands out is that, despite this relative affordability in purchasing, Almagro manages to achieve rental levels almost comparable to those of the coveted Palermo neighborhood. While renting a studio apartment in Palermo is around $200,000, in Almagro the average figure is $192,500. It is even more surprising when considering that the sale price of this typology in Palermo is US$93,450 vs. the average US$63,000 in Almagro.
Is profitability recovered?
The current recovery is due to two factors: the increase in rents and the decrease in sales prices.
Currently, on average for the entire city of Buenos Aires, it takes approximately 19.1 years of rental to recover the investment, 26% less than what was required a year ago. Compared to 2020, a year of historic lows, profitability levels in Buenos Aires are recovering and are increasing in all areas of the Federal Capital.
The current recovery is due to two factors: the increase in rents, with a cumulative increase of 89.6% in 2023 and 152.9% compared to July of last year; and the decrease in sales prices, with a cumulative drop of 2.1% this year and 23.2% from the highs of 2019, where a square meter cost around US$2,800, now reduced to US$2,153. In short, purchase prices have decreased while rents have increased, generating a higher level of profitability. However, it is advisable to take precautions.
Firstly, the evaluation of profitability in real estate investments covers multiple factors in the current context. Rental prices, based on listings, do not always reflect actual transactions. The new rental law impacted prices and created an informal market. Additionally, long-term property value is crucial; Expensive areas tend to preserve their value better. Limited supply equals rental income, which can increase profitability in lower-cost areas. Demand and external factors such as fashion also influence. In summary, profitability is variable and depends on multiple conditions in an uneven market, so caution is advised in investments.
Candelaria Reinoso Taccone
