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Expenses reach 50% of the rental value and complicate matters for tenants - Infobae
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www.infobae.com
July 19, 2024
A few years ago, they did not exceed 20% of the monthly rent. Experts analyze the sharp increase and offer advice to reduce these monthly costs.
By Jose Luis Cieri
(Illustrative Image Infobae)
Until the end of last year, there was almost no rental offer in Buenos Aires. After the DNU that repealed the Rental Law, the situation improved, but now another housing access crisis is emerging. Expenses rose in record time during 2024, with an increase of 87.53% and there are apartments where this cost already reaches up to 50% of the value of a monthly rent, which leads many tenants to look for options that avoid paying monthly maintenance.
Real estate agents report that tenants first ask about the cost of expenses, which are increasing more than inflation, before asking about the rent. Jorge C. Resqui Pizarro , a lawyer specializing in horizontal property and real estate law and president of the Center for Studies of Horizontal Property and Society (CePHyS), confirmed to Infobae that “some time ago the incidence of expenses in relation to prices did not exceed 20% of the value of rents. Today, that implication can reach up to 50% of what is paid for the rental of properties.”
According to estimates from private sources, the average cost of expenses rose by 10.4% across the country in June. The overall average was almost 148,000 pesos.
Tenants have very few options in this situation. In some cases, they can move to apartments in consortiums with lower expenses (probably without central services or many common spaces or amenities) or change neighborhoods or towns.
Renting a PH, with few units and low expenses, is difficult due to the limited supply and high prices (generally exceeding $350,000).
“The tenant community in CABA, which is close to 40% of the population, faces a quagmire when trying to cover rent and expenses. According to the National Federation of Tenants, in June 2024, 34.4% of household income is allocated to paying rent and expenses. For rents after the DNU, the incidence rises to 38.6%,” said Resqui Pizarro.
When looking for a property to rent, tenants not only consider the cost of rent, but also the cost of utilities. The increase in the latter is a cause for concern (Illustrative Image Infobae)
For almost two years now, the first question a tenant asks when responding to a notice, whether by phone or online, is precisely about the amount of the expenses. This initial question determines whether the tenant continues or rejects the property.
Alejandro Braña , a real estate expert and member of the Buenos Aires Real Estate Association, pointed out that a decrease in demand for rentals in buildings with high expenses was observed compared to those with lower costs. “Tenants tend to avoid properties with high expenses. Unfortunately, more than 95% of the rental offer in CABA is apartments in buildings, while the offer of houses and house-type PHs is minimal and is rented immediately, even though the published amounts may seem high.”
Resqui Pizarro indicated that the expenses of consortia are inelastic. Greater budgetary control is required since expenses are 40% more expensive than those of individuals. Saving strategies: reduction of overtime and security services.
To reduce costs, the consortia are adopting technological and energy-saving measures such as LED lamps, motion sensors and solar panels. They have also reduced central heating hours to lower the cost of gas.
In the new contracts, the difference between who pays ordinary and extraordinary expenses has disappeared, and the owners impose stricter conditions in several cases.
“Building maintenance was affected, prioritizing the most urgent and reducing non-essential expenses. In buildings with owners with greater purchasing power, the situation is better, but the impact on expenses is still being considered,” added Resqui Pizarro.
Tech companies provide technological solutions to optimize maintenance costs and reduce the impact of expenses. They work with Business Intelligence reports that allow for better negotiation with suppliers and more efficient cost control.
“In addition, a preventive maintenance panel based on artificial intelligence was developed, which predicts the most convenient time to perform maintenance on crucial facilities such as elevators and pumps, considerably optimizing building operations,” Baccigalupo said.
The recent regulation that requires administrators to upload receipts and have a QR code allows any resident to verify expenses, promoting transparency. In addition, virtual voting facilitates decision-making and the hiring of suppliers, improving efficiency.
A new regulation in CABA requires administrators to upload receipts with QR, allowing residents to verify expenses
New systems that allow bills to be paid with a QR code reduce errors and ensure immediate availability of money. “This tool is a great innovation and improves transparency,” said Baccigalupo.
Braña pointed out that the consortium members have no say in the collective bargaining negotiations of the union that represents the supervisors, where salary increases are set without consultation.
Transparency, efficiency and the use of technology are key to mitigating high costs and attracting tenants. “These measures are essential for a more accessible rental market,” Braña concluded.
www.buysllba.com
Source:
Las expensas alcanzan el 50% del valor del alquiler y complican a los inquilinos
Hace algunos años no superaban el 20% del valor mensual de los alquileres. Expertos analizan el fuerte incremento y ofrecen consejos para reducir estos costos mensuales
www.infobae.com
July 19, 2024
A few years ago, they did not exceed 20% of the monthly rent. Experts analyze the sharp increase and offer advice to reduce these monthly costs.
By Jose Luis Cieri
(Illustrative Image Infobae)
Until the end of last year, there was almost no rental offer in Buenos Aires. After the DNU that repealed the Rental Law, the situation improved, but now another housing access crisis is emerging. Expenses rose in record time during 2024, with an increase of 87.53% and there are apartments where this cost already reaches up to 50% of the value of a monthly rent, which leads many tenants to look for options that avoid paying monthly maintenance.
Real estate agents report that tenants first ask about the cost of expenses, which are increasing more than inflation, before asking about the rent. Jorge C. Resqui Pizarro , a lawyer specializing in horizontal property and real estate law and president of the Center for Studies of Horizontal Property and Society (CePHyS), confirmed to Infobae that “some time ago the incidence of expenses in relation to prices did not exceed 20% of the value of rents. Today, that implication can reach up to 50% of what is paid for the rental of properties.”
According to estimates from private sources, the average cost of expenses rose by 10.4% across the country in June. The overall average was almost 148,000 pesos.
Tenants have very few options in this situation. In some cases, they can move to apartments in consortiums with lower expenses (probably without central services or many common spaces or amenities) or change neighborhoods or towns.
Renting a PH, with few units and low expenses, is difficult due to the limited supply and high prices (generally exceeding $350,000).
“The tenant community in CABA, which is close to 40% of the population, faces a quagmire when trying to cover rent and expenses. According to the National Federation of Tenants, in June 2024, 34.4% of household income is allocated to paying rent and expenses. For rents after the DNU, the incidence rises to 38.6%,” said Resqui Pizarro.
Relevant
The cost of expenses has always been a relevant issue for tenants, but in recent times it has gained greater importance due to excessive values. Studio apartments that pay $100,000 or more in expenses are a clear example of this problem.
When looking for a property to rent, tenants not only consider the cost of rent, but also the cost of utilities. The increase in the latter is a cause for concern (Illustrative Image Infobae)
For almost two years now, the first question a tenant asks when responding to a notice, whether by phone or online, is precisely about the amount of the expenses. This initial question determines whether the tenant continues or rejects the property.
Alejandro Braña , a real estate expert and member of the Buenos Aires Real Estate Association, pointed out that a decrease in demand for rentals in buildings with high expenses was observed compared to those with lower costs. “Tenants tend to avoid properties with high expenses. Unfortunately, more than 95% of the rental offer in CABA is apartments in buildings, while the offer of houses and house-type PHs is minimal and is rented immediately, even though the published amounts may seem high.”
Supply grows but extraordinary costs must be paid
Increases in expenses significantly impact tenants. Although the DNU increased the housing supply, many must pay extraordinary expenses (regulation that was modified after the Rental Law ceased to apply), increasing their financial burden.Resqui Pizarro indicated that the expenses of consortia are inelastic. Greater budgetary control is required since expenses are 40% more expensive than those of individuals. Saving strategies: reduction of overtime and security services.
To reduce costs, the consortia are adopting technological and energy-saving measures such as LED lamps, motion sensors and solar panels. They have also reduced central heating hours to lower the cost of gas.
In the new contracts, the difference between who pays ordinary and extraordinary expenses has disappeared, and the owners impose stricter conditions in several cases.
“Building maintenance was affected, prioritizing the most urgent and reducing non-essential expenses. In buildings with owners with greater purchasing power, the situation is better, but the impact on expenses is still being considered,” added Resqui Pizarro.
Tech Panorama
Tenants consider expenses as a determining factor when evaluating a property. Nicolás Baccigalupo , CEO of Octopus Proptech, said: “This concern is heightened by the excessive values of some expenses, which in some cases exceed $100,000 per month, complicating tenants’ budgets.”Tech companies provide technological solutions to optimize maintenance costs and reduce the impact of expenses. They work with Business Intelligence reports that allow for better negotiation with suppliers and more efficient cost control.
“In addition, a preventive maintenance panel based on artificial intelligence was developed, which predicts the most convenient time to perform maintenance on crucial facilities such as elevators and pumps, considerably optimizing building operations,” Baccigalupo said.
The recent regulation that requires administrators to upload receipts and have a QR code allows any resident to verify expenses, promoting transparency. In addition, virtual voting facilitates decision-making and the hiring of suppliers, improving efficiency.
A new regulation in CABA requires administrators to upload receipts with QR, allowing residents to verify expenses
New systems that allow bills to be paid with a QR code reduce errors and ensure immediate availability of money. “This tool is a great innovation and improves transparency,” said Baccigalupo.
Real estate dynamics
Expenses have been rising for several reasons, such as the salaries of cleaning and security staff, the cost of cleaning products, elevator maintenance (which rose 260% year-on-year) and the withdrawal of subsidies for services such as energy and gas, among others.Braña pointed out that the consortium members have no say in the collective bargaining negotiations of the union that represents the supervisors, where salary increases are set without consultation.
Transparency, efficiency and the use of technology are key to mitigating high costs and attracting tenants. “These measures are essential for a more accessible rental market,” Braña concluded.
www.buysllba.com
