I love love love these. I sent you a DM
@earlyretirement. Not sure if you give any discounts to members but when I come to BA I would love to stay there. I just saw the location and it seems ideal. My friends stayed in a place in that area not far from Alto Palermo mall and told me it was the best area to stay in because it was so central. They said they got tired of Soho and tourist central!
Responded to your DM. Yes, I will give any ExpatsBA members a special "friends and family" discount so just ping me via DM and happy to hook you up with a great rental in this building or others. We have been on a buying spree the past year helping our clients buy apartments and homes. We just purchased about 5 PH units in Palermo that are being renovated and furnished now. We will continue adding on luxury properties to our portfolio and almost all of them are short-term rentals so feel free to ping me.
I love the area around Alto Palermo. I believe there will be tremendous growth over from Palermo Soho heading over to Recoleta. I actually prefer Recoleta for every day living vs. Palermo but most of the rental demand is in Palermo. I agree with your friends
@Jenn that is a fantastic area. Super central to everything.
I'm surprised that delinquency rates are so high. 30% to 40% is kind of shocking. What happens in buildings that consistently has people paying late? What if something major goes wrong? How will they pay for it? That is a scary statistic.
@FuturoBA what kind of ROI are you making? You can PM me if you don't want to answer. It sounds good that you're keeping it full but sad to hear ROI is so low. Maybe you are pricing too low? I guess since you are using it soon but I was curious as it is difficult to tell what kind of returns are expected for short term rentals. My friend there owns a few apartments and he said long term is a better deal now. He claims to be making 5% on long term rentals where guests pay all the bills. He had one of them as an Airbnb but he was complaining that the condo fees kept going up and utilities too so he switched to long term again on both.
Kudos on the apartments. They look great! You sure do have good timing. I read some of the articles on your website how you starting buying after the big crash. Selling at the top and then buying again at the bottom. Are there any more apartments in this building for sale?
Thanks
@Uncle Wong. Well it isn't all buildings but in buildings where the HOA fees keep going up, many local owners are struggling with them. The past 2 months the increases have stabilized. All of last year it was brutal as they kept going up at alarming rates. The problem is once they go up they typically don't go back down. You don't see deflation once they go up. It's the same thing for most things in Argentina.
Not all buildings have gone up at alarming rates. I own a 1 bedroom apartment in Recoleta. It was one of the first apartments that I purchased in Argentina back in 2002. It is very well managed and although we have a live in doorwoman, the expenses are very reasonable. You can see there are only 3 owners that are paying late and not huge amounts. What you will find is in buildings with a lot of amenities, the HOA went up significantly more as they have a lot of expenses like 24/7 security, pools, gyms, doormen, etc. Most buildings are trying to get away from that and go with video cameras to avoid salaries.
But you ask a great question
@Uncle Wong that in buildings that consistently have people paying late sometimes they can't pay their utility bills. There are some cases where buildings have a huge debt owned to the water company or electricity company. In others, when things break down like the elevator, or maintenance needs to be done they can't do it if there is a huge debt. Most buildings have a reserve fund that will cover emergencies but obviously these bulidings where everyone is paying late they struggle. That is why it's so vital to check the HOA bills before buying a place so you can see the general health of the building. The HOA bills is a sort of report card for the general financial health of the building.
I will avoid buying into a building where there are huge debts owed and no one is paying their bills on time. That is kind of a recipe for disaster.
As far as my good timing, I follow Warren Buffet's model of value investing albeit on a tiny scale. But I follow his general philosophy of buying assets at what can be considered value pricing. After the corralito I knew that property prices were dirt cheap. I even waiting several months waiting when I should have jumped in right away. People were panic selling. Prices got really low after the corralito. Buy when there is blood in the street so they say.
Buenos Aires is a world class city. Property prices I still think are cheap for how great of a city it is. I've been all over the world over the past 30 years to over 600 cities in 85 countries. I have been to every country in South America and most major cities in Latin America and no place compares to Buenos Aires. There are other desirable cities that I like but none comes close to Buenos Aires. So there is something to be said for buying real estate in two of the nicest neighborhoods in the entire continent (Recoleta and Palermo).
I have rode several cycles and decided to sell most of my personal properties (and most of investor properties) in 2017/2018 because prices were so high. I believe we will surpass those levels over the next several years. Most of my clients piggy back on what I do personally so when I exited out in 2017/2018 hundreds of clients followed along. Many did keep their properties as they love Buenos Aires and the carrying costs are low and they didn't have any mortgage on the properties.
I bought in San Diego in 2011 because like after the corralito in Argentina, I felt the real estate in the USA wouldn't go any lower and it was the bottom. The pendulum swung far the other way. Before banks were giving anyone with a heartbeat a mortgage but then in 2010 they were tough on friends that I know that had high FICO's, had tons of cash in the bank but might have had unusual circumstances like owning their own business. I knew it was the bottom then because property prices were lower than even replacement cost building a new property to replace it. That turned out to be correct.
Had nothing to really do with luck. I just consider myself a value investor. And I also believe in compound interest just taking rental income and buying more properties with it. Nothing is more powerful than compound interest. Typically when I feel like the market has topped, I will exit out if that area and move to another but ONLY if I feel that I can make a higher ROI in another area. And I like to buy in desirable cities. And then within those cities buying in desirable neighborhoods. That is a winning formula I have found over the past 3 decades. Both in terms of rental income in STR or Long-term rentals and also capital appreciation.
Case in point, my primary residence since I purchased it in 2011 has more than tripled in value. If you are buying in desirable locations, there will always be someone that will be interested in buying it in the future. In almost every property that I have purchased over the past 30 years, I have gotten unsolicited offers. That is how I ended up selling my house in Punta del Este, Uruguay even though it wasn't for sale.
Sorry for the long winded answer but in case you couldn't tell, I happen to LOVE real estate. I always say investing in real estate in South America is NOT for most people. But something I'm very proud of is in all my years in Argentina buying and selling real estate not one of my real estate investors has ever lost any money. In fact, most of them made amazing returns in cash flow as well as capital appreciation. I also follow Warren Buffet's philosophy with clients. If you take good care of clients and treat them like family and provide healthy returns they will pretty much invest with you forever.
🙂
As far as ROI no one can promise you any specific ROI. So anyone that promises any specific return is lying. For long term rentals you can see on our website the typical long-term ROI.
Don't buy real estate in Buenos Aires without knowing all of the laws, ins and outs and all the possible pitfalls.
buysellba.com
Just click on the neighborhood and you will see the typical long-term ROI. In Palermo now it is about 4.2% and in Recoleta about 4.77%. Typically now it's between 4% to 5% on long term rentals. Short term rentals are all over the place. I have an apartment in Palermo Holllywood that I'm netting double digit returns each and every year. For some luxurious bigger properties the ROI is through the roof! Here you can see a custom house that I built for a client back in 2008 and it continues to be amongst the top rentals in the city.
Modern Luxury Home Perfect for Couples & Families
www.airbnb.com
Printing money to this day after all these years. Many of my clients have paid for their properties a few times over since buying in Buenos Aires.
Are there many business travelers to BA? I wouldn't think there were many companies sending employees here with the cepo. My girlfriend's father told me that many foreign companies pulled out of Buenos Aires over the past few years. Are they coming back? Congratulations
@earlyretirement on your apartments. They turned out great.
There aren't any more apartments for sale here. Last year I went to see the model unit but they only had a ground floor apartment and I wanted something higher up. What a difference a bright apartment makes. The one I visited on the ground floor was very dark. And the furniture wasn't that great. These look much better but I guess the view makes a big difference. The one I went to had no view. They showed me another apartment but it was dark because there was a tree branch in front of the window. Nothing like these.
There aren't a ton of corporate travel now but it's picking up again and it will pick up after the CEPO (currency controls) ends. Companies don't really want to do business in Argentina with the currency controls in place. There is an estimated $10 Billion trapped inside Argentina from companies that are already doing business here. But many companies have already announced they will be expanding into Argentina and hiring more employees. We have already seen a flurry of some companies sending executives here doing some due diligence. This should snowball once the CEPO ends.
But there are still several people that come to Argentina for work. One of our largest clients when I had my property management company was the USA Embassy. He did almost all their housing needs for any corporate travel they had. Most people preferred apartments/houses vs. hotel rooms. I believe one the currency controls end there will be a flood of corporate travel. It was also one of the decisions I made to jump back into the real estate market in Buenos Aires. Although there are a TON of Airbnb's, the vast majority of them are cheaply furnished. Almost no owners, even foreigners buy top of the line mattresses which is something important for business travelers.
I believe that property owners that are going higher end are going to be in a good position once corporate travel picks up.
You are right this building sold out a while ago. For a while they only had a few units on the lower floors but even those sold out. There were even a few resales already. I had a client that purchased and had a death in his family and flipped it. He made a great ROI in a short amount of time although I don't recommend flipping properties as the costs involved buying here are so high when you factor in realtor's fees, legal fees, stamp taxes, etc. But if you flip a pozo before the title deed you avoid legal fees and closing costs so some people continually flip pozos.
I like buying as high floor as possible for obvious reasons. Natural sunlight, noise, view, safety, etc. I've been buying properties with GyD for 23 years and never was disappointed.
