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Booming property market: why buying to let is attractive again and which neighbourhoods offer the best returns - Infobae
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www.infobae.com
December 10, 2024
There are areas that grant up to 8% per year in dollars. What are the causes of the increase and what rental model is most convenient according to the type of property?
By Jose Luis Cieri
Buying a home to rent is a viable option within the Buenos Aires real estate market (Illustrative Image Infobae)
The repeal of the Rental Law marked a significant change in the real estate market in the city of Buenos Aires. The changes in the regulations created new possibilities for owners, who now find greater flexibility in their contracts.
This context allows for exploring options for both those who prioritize the stability of traditional rentals and those who seek to maximize income through temporary rentals. Thus, the key lies in determining whether investing in rental properties is profitable and which model is most appropriate according to the investor's goals.
This figure implies a payback period of nearly 19.6 years. In neighborhoods such as Lugano, Parque Avellaneda and La Boca, profitability can reach values of more than 8.4% annually in dollars, standing out among the most profitable areas.
The contractual flexibility favoured the owners by allowing periodic price adjustments. This change is essential in an economic context where inflation has fallen in the last five months, where keeping prices up to date ensures that incomes maintain purchasing power.
On the other hand, the increase in the supply of properties ( it grew by almost 200% since the DNU came into force in CABA ) for rent introduced competition into the market, which led owners to optimize the condition of the properties and improve the conditions of the contracts.
However, this scheme requires assuming higher initial costs, such as furniture and decoration, in addition to recurring expenses for cleaning and services.
Bryn stressed to Infobae that “owners must also consider the commissions from platforms such as Airbnb, which can represent up to 20% of the income per reservation.”
Despite these challenges, San Telmo is positioned as one of the best options due to its attractiveness for tourists and its proximity to downtown Buenos Aires.
Rentals in San Telmo offer a return of over 6% per year. “The neighborhood stands out for its strategic location, close to the river, Puerto Madero and La Boca, usual tourist attractions. Its rich history and unique corners, many of which are still little explored, gained recognition thanks to the rise of social media. San Telmo combines terraces ideal for snacks, open-air patios and other details that make it unmistakable,” said architect Inés Firpo , from Leticia Firpo Properties.
Bryn noted that “the increase in supply, accompanied by a more selective demand, pushes owners to improve conditions and adjust prices to attract quality tenants.”
In the short term, this situation benefits both parties, with more options for tenants and better income for owners. In the medium term, the market could consolidate as a more predictable environment, which would encourage new investors to enter the segment.
Two-room apartments, on the other hand, offer an ideal balance for temporary rentals, as they combine comfort and affordable prices for tourists and expatriates.
The DNU that repealed the Rental Law gave the real estate market another boost, now there are buyers who have invested again to rent the property in search of a good income (Illustrative Image Infobae)
“Units with two or more bedrooms tend to attract families, which ensures longer leases, although their profitability is lower compared to smaller properties,” Bryn added.
Temporary rentals, on the other hand, require a higher initial investment and ongoing costs for services and management. Bryn added: “The choice of model depends on the investor’s objectives. If the priority is to obtain stable income with little dedication, traditional rentals are the best alternative. On the other hand, for those seeking higher returns and who can manage the property, temporary rentals offer better results.”
While temporary rentals cost more than USD 500 per month, if the apartments are in the northern corridor of Buenos Aires they cost more than USD 650 per month.
The real estate market in CABA offers opportunities for those looking to diversify their investment through rental properties. Choosing the right model and a detailed analysis of the costs and characteristics of the property will be essential to ensure a profitable strategy.
Firpo concluded: “The combination of a more flexible environment and the attractiveness of high-demand neighbourhoods make this option an interesting alternative for investors in a market that is evolving towards greater stability.”
www.buysellba.com
Source:
Mercado inmobiliario en auge: por qué vuelve a ser atractivo comprar para alquilar y qué barrios ofrecen mayor rentabilidad
Hay zonas que otorgan hasta 8% anual en dólares. Cuáles son las causas del repunte y qué modelo de renta es más conveniente según el tipo de propiedad
www.infobae.com
December 10, 2024
There are areas that grant up to 8% per year in dollars. What are the causes of the increase and what rental model is most convenient according to the type of property?
By Jose Luis Cieri
Buying a home to rent is a viable option within the Buenos Aires real estate market (Illustrative Image Infobae)
The repeal of the Rental Law marked a significant change in the real estate market in the city of Buenos Aires. The changes in the regulations created new possibilities for owners, who now find greater flexibility in their contracts.
This context allows for exploring options for both those who prioritize the stability of traditional rentals and those who seek to maximize income through temporary rentals. Thus, the key lies in determining whether investing in rental properties is profitable and which model is most appropriate according to the investor's goals.
Traditional rental as a stable option
This option is presented as a solid alternative for those looking for predictable income. According to Zonaprop, the relationship between the purchase price of a property and the average annual rental income in CABA is 5.09%, when more than two years ago it barely exceeded the average of 2.2%.This figure implies a payback period of nearly 19.6 years. In neighborhoods such as Lugano, Parque Avellaneda and La Boca, profitability can reach values of more than 8.4% annually in dollars, standing out among the most profitable areas.
The contractual flexibility favoured the owners by allowing periodic price adjustments. This change is essential in an economic context where inflation has fallen in the last five months, where keeping prices up to date ensures that incomes maintain purchasing power.
On the other hand, the increase in the supply of properties ( it grew by almost 200% since the DNU came into force in CABA ) for rent introduced competition into the market, which led owners to optimize the condition of the properties and improve the conditions of the contracts.
Higher income but with more demands
Temporary rentals represent the most profitable option in terms of monthly income. According to Daniel Bryn , founder of Zipcode and author of Monitor Inmobiliario, this model can double or triple income compared to traditional rentals, especially in areas with high tourist demand such as Palermo, San Telmo and Recoleta.However, this scheme requires assuming higher initial costs, such as furniture and decoration, in addition to recurring expenses for cleaning and services.
Bryn stressed to Infobae that “owners must also consider the commissions from platforms such as Airbnb, which can represent up to 20% of the income per reservation.”
Despite these challenges, San Telmo is positioned as one of the best options due to its attractiveness for tourists and its proximity to downtown Buenos Aires.
Rentals in San Telmo offer a return of over 6% per year. “The neighborhood stands out for its strategic location, close to the river, Puerto Madero and La Boca, usual tourist attractions. Its rich history and unique corners, many of which are still little explored, gained recognition thanks to the rise of social media. San Telmo combines terraces ideal for snacks, open-air patios and other details that make it unmistakable,” said architect Inés Firpo , from Leticia Firpo Properties.
Market dynamics and prospects
The Buenos Aires market is showing signs of equilibrium following the elimination of restrictions imposed by the previous Rental Law.Bryn noted that “the increase in supply, accompanied by a more selective demand, pushes owners to improve conditions and adjust prices to attract quality tenants.”
In the short term, this situation benefits both parties, with more options for tenants and better income for owners. In the medium term, the market could consolidate as a more predictable environment, which would encourage new investors to enter the segment.
Which model is suitable?
The profitability of a property varies depending on its type and location. Studio apartments are usually the most suitable option for traditional rentals due to the high demand among students and young professionals.Two-room apartments, on the other hand, offer an ideal balance for temporary rentals, as they combine comfort and affordable prices for tourists and expatriates.
The DNU that repealed the Rental Law gave the real estate market another boost, now there are buyers who have invested again to rent the property in search of a good income (Illustrative Image Infobae)
“Units with two or more bedrooms tend to attract families, which ensures longer leases, although their profitability is lower compared to smaller properties,” Bryn added.
Key factors
Before investing, it is essential to analyze the costs associated with each rental model. The traditional scheme involves expenses such as property maintenance and extraordinary expenses.Temporary rentals, on the other hand, require a higher initial investment and ongoing costs for services and management. Bryn added: “The choice of model depends on the investor’s objectives. If the priority is to obtain stable income with little dedication, traditional rentals are the best alternative. On the other hand, for those seeking higher returns and who can manage the property, temporary rentals offer better results.”
Prices
Currently, the traditional rent for a one-bedroom and two-bedroom apartment in CABA ranges between $400,000 and $600,000 on average.While temporary rentals cost more than USD 500 per month, if the apartments are in the northern corridor of Buenos Aires they cost more than USD 650 per month.
The real estate market in CABA offers opportunities for those looking to diversify their investment through rental properties. Choosing the right model and a detailed analysis of the costs and characteristics of the property will be essential to ensure a profitable strategy.
Firpo concluded: “The combination of a more flexible environment and the attractiveness of high-demand neighbourhoods make this option an interesting alternative for investors in a market that is evolving towards greater stability.”
www.buysellba.com
