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How to buy a property: the three alternatives on the market, with their risks and benefits - Infobae
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www.infobae.com
August 20, 2024
What are the current options for accessing the acquisition of real estate and what do specialists recommend to keep in mind before completing a transaction?
By Jose Luis Cieri
There are three current forms of real estate financing in the country: mortgage loans, properties in short supply and the exchange of apartments (Illustrative Image Infobae)
Anyone interested in purchasing a used, brand new or sub-standard home must resort to different financing strategies and mechanisms to be successful in the operation. Firstly, mortgage loans , which recently returned to the market through proposals from more than 18 banks; secondly, units under construction, which allow the purchase of a sub-standard home at much more affordable prices; and the third alternative is real estate exchange, which is usually used by those people looking for a used property.
Knowing these mechanisms and following the recommendations of specialists can make the difference between a successful transaction and one that will entail an unsustainable financial burden.
After six years of a shortage of mortgage loans, the real estate situation in Argentina has begun to change and has once again offered hope to those who wish to purchase their own home.
Ezequiel Leibaschoff , commercial director of GCH, highlighted to Infobae that mortgage loans have begun to offer new opportunities. This reactivation promises to facilitate access to the purchase of a property, including renovations, improvements or extensions. These loans are available for employees, self-employed workers (registered or micro-entrepreneurs) and, in those offered by Banco Nación , also for retirees and pensioners who receive their salaries from that entity.
Most banks offer loans with no maximum limit, with terms of 20 to 30 years and interest rates between 3.5% and 8.5%. Requirements to qualify include ID, a good credit history, credit card statements and various proof of payment.
Self-employed workers must have one year of seniority in AFIP and submit three pay stubs. Employees in a dependent relationship must submit three pay stubs and a work certificate.
The real estate market went through two stages with mortgage loans: first, the lack of information and strict requirements prevented sales. Then, operations were reactivated, especially in used units, due to the 20% increase in construction costs for new units.
Agustín Walger , director of New Developments at Lepore Properties, explained that this led to a preference for brand new units, driven by private financing offered by developers and facilitating payment of the price difference.
The increase distanced the value of a “used” property from a “brand new” one. A used one-bedroom apartment remained in the range between USD 75,000 and 80,000, while a brand new one in a pit rose to USD 95,000 and 100,000. If it were finished, it would be around USD 130,000.
It is always advisable to be well advised before purchasing through any method (Illustrative Image Infobae) (Illustrative Image Infobae)
“This adjustment in values allowed the purchase of used units in the last 60 days. Those who had capital and could not access new units, used loans to renovate the properties they had acquired,” said Walger.
New mortgage loans in Argentina have the following characteristics:
Walger commented: “The relaxation of requirements and new promotions facilitate access, although it is crucial to carefully analyze each credit.”
“This option facilitates access to owning a home with less initial financial impact. There are developers who offer direct financing with a 25% advance payment and 60 installments adjusted by the Argentine Chamber of Construction (CAC) Index,” said Leibaschoff.
This method allows the cost to be distributed in stable installments, reflecting the inflation of the construction sector and ensuring financial predictability.
If the owner hands over land to a developer for construction and receives square meters in the new development or in another property
Buying off-plan is cheaper and allows access to better locations or larger homes. It offers customization and financing in installments, with an increase in value during the construction. “However, there are risks such as delays and additional costs; it is crucial to choose developers with a good reputation,” Leibaschoff recommended.
When buying in Pozo, the real estate and economic market situation must be carefully analyzed, since they can change during construction and affect the final value of the property.
Investing in properties in the greenfields offers low prices and easy payments, but also carries risks such as delays and economic changes. Projects may face delays due to weather or materials, especially in constructions of 1,500 to 3,000 m2, with delays of up to 180 days. In addition, financial problems of the developer can put the investment at risk.
Walger recommends: “Thoroughly analyze the project, the developer, and the market conditions. Request all necessary documentation and prepare for a long-term commitment. This approach ensures a successful investment, with the option to sell the unit and recover the capital at a profit.”
Source:
Cómo comprar una propiedad: las tres alternativas que hay en el mercado, con sus riesgos y beneficios
Cuáles son las opciones vigentes para acceder a la adquisición de inmuebles y qué recomiendan los especialistas para tener presente antes de concretar una operación
www.infobae.com
August 20, 2024
What are the current options for accessing the acquisition of real estate and what do specialists recommend to keep in mind before completing a transaction?
By Jose Luis Cieri
There are three current forms of real estate financing in the country: mortgage loans, properties in short supply and the exchange of apartments (Illustrative Image Infobae)
Anyone interested in purchasing a used, brand new or sub-standard home must resort to different financing strategies and mechanisms to be successful in the operation. Firstly, mortgage loans , which recently returned to the market through proposals from more than 18 banks; secondly, units under construction, which allow the purchase of a sub-standard home at much more affordable prices; and the third alternative is real estate exchange, which is usually used by those people looking for a used property.
Knowing these mechanisms and following the recommendations of specialists can make the difference between a successful transaction and one that will entail an unsustainable financial burden.
After six years of a shortage of mortgage loans, the real estate situation in Argentina has begun to change and has once again offered hope to those who wish to purchase their own home.
Ezequiel Leibaschoff , commercial director of GCH, highlighted to Infobae that mortgage loans have begun to offer new opportunities. This reactivation promises to facilitate access to the purchase of a property, including renovations, improvements or extensions. These loans are available for employees, self-employed workers (registered or micro-entrepreneurs) and, in those offered by Banco Nación , also for retirees and pensioners who receive their salaries from that entity.
Most banks offer loans with no maximum limit, with terms of 20 to 30 years and interest rates between 3.5% and 8.5%. Requirements to qualify include ID, a good credit history, credit card statements and various proof of payment.
Self-employed workers must have one year of seniority in AFIP and submit three pay stubs. Employees in a dependent relationship must submit three pay stubs and a work certificate.
The real estate market went through two stages with mortgage loans: first, the lack of information and strict requirements prevented sales. Then, operations were reactivated, especially in used units, due to the 20% increase in construction costs for new units.
Agustín Walger , director of New Developments at Lepore Properties, explained that this led to a preference for brand new units, driven by private financing offered by developers and facilitating payment of the price difference.
The increase distanced the value of a “used” property from a “brand new” one. A used one-bedroom apartment remained in the range between USD 75,000 and 80,000, while a brand new one in a pit rose to USD 95,000 and 100,000. If it were finished, it would be around USD 130,000.
It is always advisable to be well advised before purchasing through any method (Illustrative Image Infobae) (Illustrative Image Infobae)
“This adjustment in values allowed the purchase of used units in the last 60 days. Those who had capital and could not access new units, used loans to renovate the properties they had acquired,” said Walger.
New mortgage loans in Argentina have the following characteristics:
- · Interest Rate: Between 5% and 10% annually, fixed or variable.
- · Term: Between 15 and 30 years.
- · Amount: Up to 80% of the value of the property.
- · Initial savings: 20% to 30% of the property value.
- · Appraisal: An official appraisal is required.
- · Personal documentation: ID, marital status and spouse's documents.
- · Requirements: Pay stubs, tax returns, good credit history, 6 months to 2 years of work experience.
- · Adjustments: Some credits adjusted for inflation or CPI.
- · Share-to-income ratio: Share should not exceed 30% to 40% of net income.
- · Minimum income: Between $1,800,000 and $2,200,000 per month (depending on the bank).
- · Additional costs: Deeds, insurance and commissions.
Walger commented: “The relaxation of requirements and new promotions facilitate access, although it is crucial to carefully analyze each credit.”
New Construction
Buying a property in the middle of construction involves acquiring a home in the initial construction phase, taking 24 to 36 months to complete. This option allows you to acquire a property at a lower price, ideal for those looking for their first home or wishing to invest in rentals.“This option facilitates access to owning a home with less initial financial impact. There are developers who offer direct financing with a 25% advance payment and 60 installments adjusted by the Argentine Chamber of Construction (CAC) Index,” said Leibaschoff.
This method allows the cost to be distributed in stable installments, reflecting the inflation of the construction sector and ensuring financial predictability.
Barter
Apartment swapping allows homeowners to exchange properties without having to sell them first. Developers evaluate the property's location, demand and construction quality. Property swapping is similar to bartering, where money can be added if the values do not match.
If the owner hands over land to a developer for construction and receives square meters in the new development or in another property
Buying off-plan is cheaper and allows access to better locations or larger homes. It offers customization and financing in installments, with an increase in value during the construction. “However, there are risks such as delays and additional costs; it is crucial to choose developers with a good reputation,” Leibaschoff recommended.
Tips
Self-employed and micro-entrepreneurs have advantages and challenges when applying for mortgage loans. They may show higher earnings, but they face difficulties in proving income and are perceived as a higher risk, which results in higher rates or lower approved amounts.
When buying in Pozo, the real estate and economic market situation must be carefully analyzed, since they can change during construction and affect the final value of the property.
Investing in properties in the greenfields offers low prices and easy payments, but also carries risks such as delays and economic changes. Projects may face delays due to weather or materials, especially in constructions of 1,500 to 3,000 m2, with delays of up to 180 days. In addition, financial problems of the developer can put the investment at risk.
Walger recommends: “Thoroughly analyze the project, the developer, and the market conditions. Request all necessary documentation and prepare for a long-term commitment. This approach ensures a successful investment, with the option to sell the unit and recover the capital at a profit.”
