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Buenos Aires neighborhoods where can get more profits - La Nación Propiedades
Source:
www.lanacion.com.ar
September 25, 2023
In August, the average profitability of renting a used apartment in CABA exceeded 4%, despite significant increases in rents.
Candelaria Reinoso Taccone
Caballito, one of the areas that leaves the highest profit
Despite being in a pre-election context, the phenomenon of change of cycle is consolidated in the real estate market with prices that have reached their floor and are beginning to recover. Today, demand perceives a favorable environment for purchasing properties, with fewer aggressive negotiations on used units and sustained interest in projects under development.
In August, the average annual gross profitability resulting from a rental contract for a used 1 to 4 room apartment was 4.06% (in dollars), lower than that of July, when it averaged 4.76%.
When analyzing by typology, a rental contract for a two- room unit leaves a higher profitability: 4.44%, a single-room unit, 4.13%, and a three-room unit, 3.84%.
The largest units, three-bedroom apartments, have the lowest profitability, at 3.82%. These data are obtained by comparing the average values of the scarce 448 units available on Internet platforms for rental under the conditions established by the controversial law passed in 2020.
According to Real Estate Report data, the income of 4.06% represents a decrease of 0.7 percentage points compared to the previous month. The difference is explained by the strong devaluation of the peso after the result of the PASO.
Two-room apartments have the highest profitability, with 4.44%.
Germán Gómez Picasso, founder of Reporte Inmobiliario, clarifies that profitability depends largely on the fluctuation of the dollar and that “even a small variation in the price of that currency can have a significant impact on profitability.” So why does profitability depend on the value of the dollar? On the one hand, because it is calculated by “pesifying” the value of the property at the value of the blue. For example, if the apartment is worth US$100,000 and the blue one is worth $740, the value of the property in pesos is $74,000,000. This value is then compared to the annual income generated by the rental. If, for example, the rent is $300,000 per month, multiplied by 12 months, the annual income will be $3,600,000.
Taking into account the current explanation, profitability can be affected by two key factors. “On the one hand, if rents increase in pesos while the dollar remains stable, profitability improves because you are comparing a property value fixed in pesos (because the dollar did not change) with pesified rents that are constantly increasing,” explains Gómez Picasso.
The other scenario is that if rents increase but the dollar skyrockets, profitability is reduced, says the specialist.
However, the expert suggests that this profitability equation could become less relevant in the future due to the possible disappearance of rentals in pesos.
In any case, Gómez Picasso maintains that, in the current context,
“it is logical to expect an improvement in the profitability of real estate investments because an attempt will be made to keep the value of the dollar stable until the end of the year, but what happens after will largely depend on of the result of the presidential elections,” said the expert.
Gómez Picasso believes that all presidential candidates will seek to converge on a single dollar rate, and it is likely that it will not be a very high value. “I believe that the value of the official exchange rate will increase significantly, which will lead to a balance around the value of the “blue dollar” or even a little less,” he assured. This would be beneficial for the stability of the real estate market, since most transactions and calculations are carried out based on the price of the “blue dollar”.
However, he warns that there is another possibility. “If there is a more intense crisis accompanied by a strong devaluation and the value of the dollar skyrockets, the profitability of real estate investments would decrease, since the increase in the value of properties measured in pesos would have a more significant impact, despite of increases in rental prices,” explains the founder of Reporte Inmobiliario.
Despite this uncertainty, he believes that rents will continue to increase significantly, as they have done in recent quarters, each time exceeding previous increases. This trend contrasts with the uncertainty generated by the future behavior of the dollar. In fact, in August of last year the income was 3.11), 0.95 percentage points lower than the current level.
However, despite the strong increases in contracts, the expectation is that the trend of unbridled increases will continue because tenants “are desperate for an apartment for rent in pesos.” Therefore, it is anticipated that contracts will increase above 140 percent, the expected inflation for the year.”
Almagro is located as the most profitable within this typology.
A key fact is that a higher rent value does not always translate into higher profitability. For those looking to make a solid investment, it must be taken into account that, as stated above, the two environments are the typology that yields the best performance. But in this case, the area also influences.
Below are the five neighborhoods that leave the greatest profit in that typology.
Microcentro is the neighborhood where a two-room environment leaves the lowest profitability (2.95%).
On the other hand, these are the areas of the city in which purchasing a two-room apartment to use it for a contract cannot exceed 4% profitability:
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Source:
Inversiones: los barrios porteños en los que conviene comprar una propiedad para alquilar porque deja más ganancia
En agosto, la rentabilidad promedio que deja el alquiler de un departamento usado en CABA superó el 4%, a pesar de los aumentos significativos en los alquileres
www.lanacion.com.ar
September 25, 2023
In August, the average profitability of renting a used apartment in CABA exceeded 4%, despite significant increases in rents.
Investments: the Buenos Aires neighborhoods where it is advisable to buy a property to rent because it leaves more profit
Candelaria Reinoso Taccone
Caballito, one of the areas that leaves the highest profit
Despite being in a pre-election context, the phenomenon of change of cycle is consolidated in the real estate market with prices that have reached their floor and are beginning to recover. Today, demand perceives a favorable environment for purchasing properties, with fewer aggressive negotiations on used units and sustained interest in projects under development.
In August, the average annual gross profitability resulting from a rental contract for a used 1 to 4 room apartment was 4.06% (in dollars), lower than that of July, when it averaged 4.76%.
When analyzing by typology, a rental contract for a two- room unit leaves a higher profitability: 4.44%, a single-room unit, 4.13%, and a three-room unit, 3.84%.
The largest units, three-bedroom apartments, have the lowest profitability, at 3.82%. These data are obtained by comparing the average values of the scarce 448 units available on Internet platforms for rental under the conditions established by the controversial law passed in 2020.
According to Real Estate Report data, the income of 4.06% represents a decrease of 0.7 percentage points compared to the previous month. The difference is explained by the strong devaluation of the peso after the result of the PASO.
Two-room apartments have the highest profitability, with 4.44%.
Germán Gómez Picasso, founder of Reporte Inmobiliario, clarifies that profitability depends largely on the fluctuation of the dollar and that “even a small variation in the price of that currency can have a significant impact on profitability.” So why does profitability depend on the value of the dollar? On the one hand, because it is calculated by “pesifying” the value of the property at the value of the blue. For example, if the apartment is worth US$100,000 and the blue one is worth $740, the value of the property in pesos is $74,000,000. This value is then compared to the annual income generated by the rental. If, for example, the rent is $300,000 per month, multiplied by 12 months, the annual income will be $3,600,000.
Taking into account the current explanation, profitability can be affected by two key factors. “On the one hand, if rents increase in pesos while the dollar remains stable, profitability improves because you are comparing a property value fixed in pesos (because the dollar did not change) with pesified rents that are constantly increasing,” explains Gómez Picasso.
The other scenario is that if rents increase but the dollar skyrockets, profitability is reduced, says the specialist.
However, the expert suggests that this profitability equation could become less relevant in the future due to the possible disappearance of rentals in pesos.
In any case, Gómez Picasso maintains that, in the current context,
“it is logical to expect an improvement in the profitability of real estate investments because an attempt will be made to keep the value of the dollar stable until the end of the year, but what happens after will largely depend on of the result of the presidential elections,” said the expert.
Gómez Picasso believes that all presidential candidates will seek to converge on a single dollar rate, and it is likely that it will not be a very high value. “I believe that the value of the official exchange rate will increase significantly, which will lead to a balance around the value of the “blue dollar” or even a little less,” he assured. This would be beneficial for the stability of the real estate market, since most transactions and calculations are carried out based on the price of the “blue dollar”.
However, he warns that there is another possibility. “If there is a more intense crisis accompanied by a strong devaluation and the value of the dollar skyrockets, the profitability of real estate investments would decrease, since the increase in the value of properties measured in pesos would have a more significant impact, despite of increases in rental prices,” explains the founder of Reporte Inmobiliario.
Despite this uncertainty, he believes that rents will continue to increase significantly, as they have done in recent quarters, each time exceeding previous increases. This trend contrasts with the uncertainty generated by the future behavior of the dollar. In fact, in August of last year the income was 3.11), 0.95 percentage points lower than the current level.
However, despite the strong increases in contracts, the expectation is that the trend of unbridled increases will continue because tenants “are desperate for an apartment for rent in pesos.” Therefore, it is anticipated that contracts will increase above 140 percent, the expected inflation for the year.”
The best neighborhoods to invest
Almagro is located as the most profitable within this typology.
A key fact is that a higher rent value does not always translate into higher profitability. For those looking to make a solid investment, it must be taken into account that, as stated above, the two environments are the typology that yields the best performance. But in this case, the area also influences.
Below are the five neighborhoods that leave the greatest profit in that typology.
- Almagro: with a profitability of 6.11% and contracts that are around $250,000 per month, a two-bedroom in this neighborhood costs US$72,500 on average and is ranked as the most profitable within this typology.
- Caballito: with 5.34% profitability, it is positioned as the second most profitable neighborhood in the case of both environments, with an average rent of $250,000 and an apartment priced at US$83,000.
- Flores: in third place is this busy commercial area, where profitability reaches 5.03% with an average rental value of around $200,000 per month and sales for US$70,500.
- Barrio Norte: includes part of the Retiro and Recoleta neighborhoods and is tied with Flores, with a profitability of 5.03% and a monthly rent that is around $255,500, with the price of a two-room apartment at US$90,000.
- Nuñez: with a high average rent of $292,000, buying and renting a two-bedroom in this area has a profitability of 4.75% annually, with the average price of an apartment of this type at US$109,000.
Which neighborhoods leave a profitability below 4%
Microcentro is the neighborhood where a two-room environment leaves the lowest profitability (2.95%).
On the other hand, these are the areas of the city in which purchasing a two-room apartment to use it for a contract cannot exceed 4% profitability:
- Saavedra: despite being a neighborhood that attracts more and more people, buying a one-bedroom apartment in this area costs US$105,000, and with a monthly rent of $230,000, the profitability is 3.88%.
- Palermo: the most coveted area to live has a profitability of 3.80%, since the value of a two-room apartment is US$119,000, while the monthly rent is $255,250.
- Retirement: with a profitability of 3.65%, the average rent is $185,000 per month, one of the cheapest of the type, while buying a two-room apartment costs US$89,945.
- Microcentro: it is the neighborhood where a two-bedroom has the lowest profitability (2.95%), with the average monthly rent at $130,000 and the value of an apartment at US$78,000.
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