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Temporary rentals: What profitability does the owner receive and why the supply continues to grow - Infobae
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Alquileres temporarios: qué rentabilidad recibe el propietario y por qué sigue creciendo la oferta
Hay más de 21.000 propiedades en esa modalidad en distintos barrios. La demanda es motorizada en gran medida por el turismo internacional. Cómo debe estar preparada la vivienda para acuerdos de corto plazo
www.infobae.com
January 2, 2024
There are more than 21,000 properties in this modality in different neighborhoods. Demand is largely driven by international tourism. How housing should be prepared for short-term agreements
By Jose Luis Cieri
A two-room apartment with a balcony, the important thing is that they are equipped, furnished and if they have an outside exit even better (Photo Courtesy: at Buenos Aires)
The number of properties intended for temporary rental in the city of Buenos Aires continues to increase: throughout 2023 it experienced an increase of 43%, going from 14,889 to 21,367 units offered.
Several owners, dissatisfied with the Rental Law that imposed long-term agreements, equipped their properties to offer them for temporary rentals. Until October, these units were published in dollars, but after the reform that prohibited advertising in foreign currency, they began to be offered in pesos or with the indication “check price.”
“The growth in the supply of units in this modality is attributed to the flexibility that this type of contract provides, with short periods, allowing the owner to use the property for other purposes or sell it if they so decide. In addition, this option provides greater income compared to traditional rental,” explained Daniel Bryn, creator of Monitor Inmobiliario.
Experts agree that the main demanders are international tourists, and a significant movement is also observed in domestic tourism. Some look for units with amenities like a pool, coworking spaces, and a gym.
Despite the increase in the number of available properties, demand decreased compared to 2022. Federico Vinelli, of Vinelli Inmobiliaria, noted that “the most sought-after neighborhoods continue to be those strategically located from a tourist perspective, such as Palermo, Recoleta and San Telmo , among others".
Puerto Madero is also among the public's preferences. Above all it is sought after for its security and proximity to green spaces and water. Adriana Villanueva, from Adriana Villanueva Properties, pointed out that in the youngest neighborhood of CABA the demand is driven by foreigners, especially by Russians who prefer to live in Argentina until peace returns in their country and senior executives of companies who "prioritize residing in a home that looks like a 4 or 5 star hotel.”
On several occasions the apartments have an integrated kitchen, dining room, laundry and living room.
In numbers and prices
According to Real Estate Monitor, an average temporary rental apartment is occupied 60% of the month.– The average daily rate: is USD 56 or $55,500 (free quote).
– The profitability is 7.93% average in dollars compared to the 3.57% average offered by traditional rentals.
– The composition of the stock of units is distributed as follows:
– Two rooms: 75%.
– Three rooms: 19%.
– Four rooms or more: 6%.
And the neighborhoods that have the most units for temporary rental are the following:
1 - Palermo: 7,097.
2 - Recoleta: 3,018.
3 - San Nicolás: 1,344.
4 - Belgrano: 1,079.
5 - Withdrawal: 1,001.
The profitability of temporary rentals is double that of traditional ones. Suggests great investment potential in this sector
Bryn pointed out that the collection of temporary rent is linked to the payment method agreed upon between the tenant and the platform. Usually, it is credited to a dollar account of the owner, who decides whether to receive the payment in cash, transfer it, or convert it to pesos. Collection methods include transfer, debit cards and various platforms.
For example, a furnished 3-room apartment in Palermo, located in Armenia at 2100, is available for $1,400,000 per month. On Avenida del Libertador at 6900, Núñez, a 4-room apartment is offered for $4,000,000 per month. The lowest prices are currently around $500,000 (two rooms) in Monserrat or San Telmo, or in the historic center of Buenos Aires, where there are well-preserved but older properties.
Advantages and disadvantages
Tenants are advised to manage their rentals through registered real estate agencies, given the growing supply of units and the variability in the management of stays by some providers, who may not comply with legal requirements.Lucas Sosa, producer of temporary rentals, explained that “quarterly contracts offer tenants predictability in terms of cost and duration, while allowing owners to ensure constant occupancy of their properties, adapting to the evolution of supply and demand. in the market".
With bright bedrooms and the properties have white linen
Currently, foreign university students are promoting agreements with a view to February or March, coinciding with the beginning of the school year.
“Aware of the high demand in that period, they seek to ensure predictable conditions upon returning to the country. However, due to the economic uncertainty in Argentina, many agreements that are finalized in advance are established in dollars,” Sosa clarified.
The downside is that the owner must ensure that the apartment is fully equipped and furnished, which can be expensive.
Vinelli advised: “As for contracts, I highlight the importance of considering guarantees related to damage to the property by the tenant/user and non-compliance by the owner regarding the condition, characteristics, operation of the equipment, quality of furniture and cleaning.”
Temporary rentals may also require greater attention to detail and greater dedication to ensuring that the tourists who live there are satisfied. That the homes have TV, Internet and even linen, among other requirements.
“The optimal thing for both owners and tenants is to document all aspects in detail in the contract. Expenses, services and responsibility for cleaning must be recorded. To enter, at least one month of deposit is required as a guarantee, and if the tenant can pay two months, the owner guarantees timely compliance with the agreement, especially in three-month contracts,” Villanueva concluded.
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