Inflation index on long-term rental apartment rental contracts in Buenos Aires?

[lark]

Long time lurker but first time poster. I have been renting an apartment from the same owner for the past several years. I initially got stuck here during Covid but have been playing the perma tourist game. So far so good. Argentina has to be the easiest country in the world to stay illegally long term. I have not had any issues leaving back to USA or going to Brazil or Chile on vacations.

My entire time living in Buenos Aires owners have never wanted pesos. Only US DOLLARS! I am getting ready to renew my lease and this is the first time the owner does not want to accept dollars. She wants to do a peso lease and said she wants to use the official inflation index. I am going to meet her for a coffee later today to discuss it but what are you all that have long term rentals not locked in dollars doing? Anyone else coming across this? I NEVER thought I would see locals preferring pesos to dollars. What index are you using to calculate the inflation?

I am still going to try to offer a bit more to lock it in US DOLLARS as I don't want to take the chance of not knowing what the rent price will cost me a year from now.

 

[Faith]

Long time lurker but first time poster. I have been renting an apartment from the same owner for the past several years. I initially got stuck here during Covid but have been playing the perma tourist game. So far so good. Argentina has to be the easiest country in the world to stay illegally long term. I have not had any issues leaving back to USA or going to Brazil or Chile on vacations.

My entire time living in Buenos Aires owners have never wanted pesos. Only US DOLLARS! I am getting ready to renew my lease and this is the first time the owner does not want to accept dollars. She wants to do a peso lease and said she wants to use the official inflation index. I am going to meet her for a coffee later today to discuss it but what are you all that have long term rentals not locked in dollars doing? Anyone else coming across this? I NEVER thought I would see locals preferring pesos to dollars. What index are you using to calculate the inflation?

I am still going to try to offer a bit more to lock it in US DOLLARS as I don't want to take the chance of not knowing what the rent price will cost me a year from now.

My friend living here is going through the same thing. I told her that she must be wrong or didn't understand correctly as she doesn't speak Spanish. I told her she must be mistaken but it seems like from reading your post locals now don't know what the dollar will do and prefer pesos. I've seen it all now!

 

[Betsy Ross]

My friend living here is going through the same thing. I told her that she must be wrong or didn't understand correctly as she doesn't speak Spanish. I told her she must be mistaken but it seems like from reading your post locals now don't know what the dollar will do and prefer pesos. I've seen it all now!

The dollar has been losing value since it hit the peak a few months ago. Seems like the government is trying to keep the exchange rate around 1,000 pesos to $1 USD or at least that is how the blue is trading. MEP slightly ahead of that. No one knows what will happen with the dollar. The Dollar has been weak around much of the world lately. First time I have seen people wanting pesos but I am not sure I'd bet on the Peso against the dollar but I have heard of other owners that would prefer to do long term rental in pesos with inflation adjustment vs. USD. I heard some builders as well prefer peso with inflation vs. fixed dollar. Crazy.

On the rental inflation you can read about the inflation adjustment clause on new contracts.

Alquileres: los contratos que se actualicen en abril tendrán un aumento récord

Los contratos de locación que fueron firmados bajo la ley de alquileres -ya derogada- se actualizan una vez al año de acuerdo al Índice de Contratos de Locación (ICL) hasta que llegue su vencimiento

www.lanacion.com.ar

 

[Spend Thrift]

The dollar has been losing value since it hit the peak a few months ago. Seems like the government is trying to keep the exchange rate around 1,000 pesos to $1 USD or at least that is how the blue is trading. MEP slightly ahead of that. No one knows what will happen with the dollar. The Dollar has been weak around much of the world lately. First time I have seen people wanting pesos but I am not sure I'd bet on the Peso against the dollar but I have heard of other owners that would prefer to do long term rental in pesos with inflation adjustment vs. USD. I heard some builders as well prefer peso with inflation vs. fixed dollar. Crazy.

On the rental inflation you can read about the inflation adjustment clause on new contracts.

Alquileres: los contratos que se actualicen en abril tendrán un aumento récord

Los contratos de locación que fueron firmados bajo la ley de alquileres -ya derogada- se actualizan una vez al año de acuerdo al Índice de Contratos de Locación (ICL) hasta que llegue su vencimiento

www.lanacion.com.ar

I am glad I fixed my long term rental in Dollars. At the time I thought the owner was getting the better deal but with rapid inflation I am not sure now. I would much rather know how much my rental price will be each month. I have looked at some new construction projects and they also won't sell without inflation adjustment. Up until a few months ago the dollar kept rising so it was better but now no one is for sure.

 

[Finance Prof]

The dollar has been losing value since it hit the peak a few months ago. Seems like the government is trying to keep the exchange rate around 1,000 pesos to $1 USD or at least that is how the blue is trading. MEP slightly ahead of that. No one knows what will happen with the dollar. The Dollar has been weak around much of the world lately. First time I have seen people wanting pesos but I am not sure I'd bet on the Peso against the dollar but I have heard of other owners that would prefer to do long term rental in pesos with inflation adjustment vs. USD. I heard some builders as well prefer peso with inflation vs. fixed dollar. Crazy.

On the rental inflation you can read about the inflation adjustment clause on new contracts.

Alquileres: los contratos que se actualicen en abril tendrán un aumento récord

Los contratos de locación que fueron firmados bajo la ley de alquileres -ya derogada- se actualizan una vez al año de acuerdo al Índice de Contratos de Locación (ICL) hasta que llegue su vencimiento

www.lanacion.com.ar

My first time also that locals seem to want pesos. This has never been the case my entire stint in Argentina. Scary thing is I don't know what will happen in future. Are you all loading up on pesos? On the inflation adjustment in the rental contract, some property owners are using the IPC but most of my friends are agreeing to use the ICL which is the long-term rental contract index by the BCRA - The Central Bank of Argentina.

Calculadora Alquileres

calculadora.cmcpsi.org.ar

 

[lark]

My first time also that locals seem to want pesos. This has never been the case my entire stint in Argentina. Scary thing is I don't know what will happen in future. Are you all loading up on pesos? On the inflation adjustment in the rental contract, some property owners are using the IPC but most of my friends are agreeing to use the ICL which is the long-term rental contract index by the BCRA - The Central Bank of Argentina.

Calculadora Alquileres

calculadora.cmcpsi.org.ar

Thank you all for answering. Very helpful. The property owner said they would go through this with me today and said there was an index but I was mistaking it for consumer price index for food. I did not know there was one for rentals. @Finance Prof so can you explain a bit how they calculate it? Would you all advice I push to pay more in US DOLLARS and just fix it. I would prefer to know what my rental price will be for the next 1-2 years. Thanks.

 

[Finance Prof]

Thank you all for answering. Very helpful. The property owner said they would go through this with me today and said there was an index but I was mistaking it for consumer price index for food. I did not know there was one for rentals. @Finance Prof so can you explain a bit how they calculate it? Would you all advice I push to pay more in US DOLLARS and just fix it. I would prefer to know what my rental price will be for the next 1-2 years. Thanks.

You just enter the data on that link. Peso contracts are typically adjusted quarterly. For example for April the index is compounded for January-February/March. Me personally I would much rather know what my rent will cost me over the long term. There is great uncertainty of what will happen in Argentina over the long term. Anyone that says they know is lying.

 

[Stan]

My first time also that locals seem to want pesos. This has never been the case my entire stint in Argentina.

Same. I was laughing the other day as I loaded up at pesos at 1,200 pesos a few months ago. That stash just ran out but had I known, I would have purchased several more thousands of dollars in pesos. I wish I knew which way it would go.

 

[lark]

You just enter the data on that link. Peso contracts are typically adjusted quarterly. For example for April the index is compounded for January-February/March. Me personally I would much rather know what my rent will cost me over the long term. There is great uncertainty of what will happen in Argentina over the long term. Anyone that says they know is lying.

Thank you! I didn't see the link before but saw it. Ok this is much appreciated. I think I will offer a bit more in DOLLARS and just try for that. Do you all really think the dollar will continue to fall in value???