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The real estate investment in which you earn up to three times more than with a traditional rental - La Nacion Propiedades
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www.lanacion.com.ar
October 02, 2024
The business model in which it is possible to shelter capital with rents that can triple those of a traditional rental; what are the new projects in Iguazú, Bariloche and Rosario like?
By Maria Josefina Lanzi
There are investment opportunities that leave an income that can triple that of traditional rentals
In Argentina, a country full of political and economic ups and downs, brick and mortar has traditionally been a refuge of value. The possibility of renting out a property and earning extra income through this business is attractive to many, which currently leaves a rent in neighborhoods such as Palermo or Belgrano of 3.7% and 3.8%, respectively, and reaches 7.6% and 5.8% in Lugano and La Boca, which are established as the most profitable areas, according to the latest survey by Zonaprop. But there is a sector within real estate where these figures climb and can even triple the numbers : investment in condo hotels or in what some prefer to call "tourist brick", which opens the doors to owning a hotel for "small" investments, similar to the value of a studio apartment in CABA.
Condo-hotels are a business model in which you can buy an entire bedroom in a hotel - although in some cases you can own a fraction or half of a room - and receive income for the use you make of the accommodation . The interesting thing about the business is that the rent is not conditioned by whether the room is occupied or not, but rather it is based on the total occupancy of the hotel and the income is divided proportionally to the investment that each one made. In addition, the money earned by those who bet on this market includes the use of the rooms, but also all the services of the hotel, such as consumption in the spa , the restaurant, the parking , among others.
Owning a hotel bedroom is possible, either in full or in percentage.
“It is an investment product that allows you to own a hotel, with rents ranging from 7% to 12% annually, that is, two to three times what traditional brick would be ,” shares Ramiro Alem, CEO and co-founder of Invertur Realty, a marketing company specialized in Tourist Real Estate , and highlights that “it allows democratizing access to this type of investment,” since, for a “low ticket,” it is possible to own a hotel.
It should be noted that the rent may vary, as it is subject to the hotel activity achieved by the service at that time. This was the case of some condo hotels during the pandemic, which “suffered losses due to confinement and the cessation of activity,” explains Lisandro Cristiá, CEO-founder of Argenway, developer and manager of real estate hotel projects.
In this business model, the investor does not need to deal with administration , or to be responsible for handing over the key to the tenant or maintaining the apartment in good condition, but “simply receives a transfer.” The hotel is operated by an administrative group and has a national or international hotel brand behind it that supports the activity. “ The owner does not have to think about maintenance , since, in our case, a monthly reserve is planned that is used from time to time to renew furniture, paint or carpets,” says Alem.
There are investment opportunities that leave an income that can triple that of traditional rentals Argenway
On the other hand, he highlights that it has the benefit of being an income that is constantly updated , since, unlike a traditional rental that is adjusted when the contract stipulates it, in this case the hotel rates respond to increases in inflation. In addition, when investing in a hotel through the condo hotel as an investment product, the owner is responsible for the income tax and the property tax, but not for the operating taxes generated by a traditional rental: in other words, VAT, gross income or stamps, are taxes that are the responsibility of the trust, "taxes that represent between 10% and up to 20% of the value of the asset," says Alem.
Hampton by Hilton in Bariloche is a hotel that was completed in 2019 and that brought in 125 investors Argenway
Regarding the time it takes to recover the initial investment, Cristiá speaks of an average of 12 years , which represents almost half of what it takes for a traditional brick investment, since, according to Zonaprop figures from September, in CABA it takes 21.8 years of renting to recover the initial investment.
It is also a business model that allows small and medium-sized investors to enter the hotel world and earn income with an entry ticket that sometimes starts at US$35,000. If compared to an apartment in the City of Buenos Aires, the average 40 m² studio apartment was priced at US$101,909 in September, according to Zonaprop figures. “In the world, it is normal that the big players who benefit from these rents are the big investment funds. However, the condo hotel democratises access to a hotel business ”, explains the CEO of Invertur Realty.
Among other advantages of the business is the possibility, in some cases, that investors can use them in the low season at no cost or offer discounts to family members or acquaintances.
In this particular model, a trust is established for the construction. Once the work is finished, each of the functional units is registered and another trust is established for the administration, where the owner assigns his unit to the operation of the hotel. 60% of the investor's income comes from the purchase of the rooms he acquires and the rest from the common areas of the hotel.
These same investors also have a project in Paraguay, called Ramada by Wyndham Asunción Airport. The entry fee is US$75,500, although it drops to US$65,000 if the payment is made in cash. In the first case, a 35% down payment is required and monthly payments of US$1,000 until delivery. It is expected to open in the first quarter of 2025 and to yield an annual rent in dollars of 7 to 12%.
Four Points by Sheraton will have an investment of US$20 millionInvertur Realty
In the south of Argentina there are also similar ventures, such as the Hampton by Hilton in Bariloche, a hotel promoted by the developer Argenway that was completed in 2019 and brought in 125 investors. Also, nearby, they have the Tru by Hilton project, a 120-bedroom hotel, which has already attracted 50 investors and plans to start building at the end of the year. They aim to open it in 2027 at Moreno 200, in the heart of the city, on a 1,250 m² plot of land. The estimated investment is US$15 million , a figure that includes expenses in the gastronomic businesses that will be on the ground floor. The ticket to enter starts at US$35,788 for those who want to buy 1/4 of a bedroom, goes up to US$69,550 for half a room and reaches US$135,048 for a full one. There is the possibility of paying it in 36 installments, paying a 30% advance payment.
Investments: “Tru by Hilton” will be a 120-bedroom hotel
Towards the center of the country, in the city of Rosario, another Hampton by Hilton is being built, which currently has 105 investors. Construction began a year ago and it is planned to have 117 rooms and be finished in approximately a year and a half. It will be part of a mixed-use complex, which will have underground parking, a pedestrian walkway and a tower for offices and apartments for housing, which will total an investment of US$30 million and will be built on a 2000 m² plot . The initial ticket for 25% of a room is $44,414,531, rising to $86,315,032 for 50% and reaching $167,602,004 for 100% of the property. It can be accessed with a 30% advance payment and the remainder paid in 24 installments adjusted by CAC.
“We believe that the possibility of owning 25% or 50% of a bedroom was the key to our model, since 2/3 of the owners entered the business this way , something that has been a magnet for small and medium investors,” shares Cristiá and details that the expected rent for their projects is between 7% and 9% annually , depending on the time of purchase: for those who invested in the pit, the rent is 9%, but when they buy once it is finished, the ticket increases and the rent decreases slightly.
www.buysellba.com
Source:
La inversión inmobiliaria en la que se gana hasta tres veces más que con un alquiler tradicional
El modelo de negocio en el que es posible refugiar el capital con rentas que pueden triplicar las de un alquiler tradicional; cómo son los nuevos proyectos en Iguazú, Bariloche y Rosario
www.lanacion.com.ar
October 02, 2024
The business model in which it is possible to shelter capital with rents that can triple those of a traditional rental; what are the new projects in Iguazú, Bariloche and Rosario like?
By Maria Josefina Lanzi
There are investment opportunities that leave an income that can triple that of traditional rentals
In Argentina, a country full of political and economic ups and downs, brick and mortar has traditionally been a refuge of value. The possibility of renting out a property and earning extra income through this business is attractive to many, which currently leaves a rent in neighborhoods such as Palermo or Belgrano of 3.7% and 3.8%, respectively, and reaches 7.6% and 5.8% in Lugano and La Boca, which are established as the most profitable areas, according to the latest survey by Zonaprop. But there is a sector within real estate where these figures climb and can even triple the numbers : investment in condo hotels or in what some prefer to call "tourist brick", which opens the doors to owning a hotel for "small" investments, similar to the value of a studio apartment in CABA.
Condo-hotels are a business model in which you can buy an entire bedroom in a hotel - although in some cases you can own a fraction or half of a room - and receive income for the use you make of the accommodation . The interesting thing about the business is that the rent is not conditioned by whether the room is occupied or not, but rather it is based on the total occupancy of the hotel and the income is divided proportionally to the investment that each one made. In addition, the money earned by those who bet on this market includes the use of the rooms, but also all the services of the hotel, such as consumption in the spa , the restaurant, the parking , among others.
Owning a hotel bedroom is possible, either in full or in percentage.
“It is an investment product that allows you to own a hotel, with rents ranging from 7% to 12% annually, that is, two to three times what traditional brick would be ,” shares Ramiro Alem, CEO and co-founder of Invertur Realty, a marketing company specialized in Tourist Real Estate , and highlights that “it allows democratizing access to this type of investment,” since, for a “low ticket,” it is possible to own a hotel.
It should be noted that the rent may vary, as it is subject to the hotel activity achieved by the service at that time. This was the case of some condo hotels during the pandemic, which “suffered losses due to confinement and the cessation of activity,” explains Lisandro Cristiá, CEO-founder of Argenway, developer and manager of real estate hotel projects.
In this business model, the investor does not need to deal with administration , or to be responsible for handing over the key to the tenant or maintaining the apartment in good condition, but “simply receives a transfer.” The hotel is operated by an administrative group and has a national or international hotel brand behind it that supports the activity. “ The owner does not have to think about maintenance , since, in our case, a monthly reserve is planned that is used from time to time to renew furniture, paint or carpets,” says Alem.
There are investment opportunities that leave an income that can triple that of traditional rentals Argenway
On the other hand, he highlights that it has the benefit of being an income that is constantly updated , since, unlike a traditional rental that is adjusted when the contract stipulates it, in this case the hotel rates respond to increases in inflation. In addition, when investing in a hotel through the condo hotel as an investment product, the owner is responsible for the income tax and the property tax, but not for the operating taxes generated by a traditional rental: in other words, VAT, gross income or stamps, are taxes that are the responsibility of the trust, "taxes that represent between 10% and up to 20% of the value of the asset," says Alem.
“A window of opportunity”
According to data from the World Travel and Tourism Council (WTTC), travel demand is expected to grow twice as fast as the economy, with an annual average of 5.8% for the next 10 years; numbers that will require a growing response from the supply. “The necessary investments in the tourism and hotel industry have not been made in recent times to be able to satisfy this demand, so I consider this business to be a very strong window of opportunity to enter the hotel sector ,” Alem shares.
Hampton by Hilton in Bariloche is a hotel that was completed in 2019 and that brought in 125 investors Argenway
Regarding the time it takes to recover the initial investment, Cristiá speaks of an average of 12 years , which represents almost half of what it takes for a traditional brick investment, since, according to Zonaprop figures from September, in CABA it takes 21.8 years of renting to recover the initial investment.
It is also a business model that allows small and medium-sized investors to enter the hotel world and earn income with an entry ticket that sometimes starts at US$35,000. If compared to an apartment in the City of Buenos Aires, the average 40 m² studio apartment was priced at US$101,909 in September, according to Zonaprop figures. “In the world, it is normal that the big players who benefit from these rents are the big investment funds. However, the condo hotel democratises access to a hotel business ”, explains the CEO of Invertur Realty.
Among other advantages of the business is the possibility, in some cases, that investors can use them in the low season at no cost or offer discounts to family members or acquaintances.
Projects in Bariloche, Rosario and Iguazu Falls
Among the investment options, the Four Points by Sheraton , a four-star condo hotel from the Marriott International chain, will be built in Iguazú . It will have 120 bedrooms and is expected to be ready by January 2027. The project will require a total investment of US$20 million to build the project. The entrance ticket starts at US$145,200, which is paid with a 30% advance payment and 26 monthly installments adjusted by the CAC index. This is an investment suitable for money laundering with an estimated annual return of 7 to 12% in dollars.In this particular model, a trust is established for the construction. Once the work is finished, each of the functional units is registered and another trust is established for the administration, where the owner assigns his unit to the operation of the hotel. 60% of the investor's income comes from the purchase of the rooms he acquires and the rest from the common areas of the hotel.
These same investors also have a project in Paraguay, called Ramada by Wyndham Asunción Airport. The entry fee is US$75,500, although it drops to US$65,000 if the payment is made in cash. In the first case, a 35% down payment is required and monthly payments of US$1,000 until delivery. It is expected to open in the first quarter of 2025 and to yield an annual rent in dollars of 7 to 12%.
Four Points by Sheraton will have an investment of US$20 millionInvertur Realty
In the south of Argentina there are also similar ventures, such as the Hampton by Hilton in Bariloche, a hotel promoted by the developer Argenway that was completed in 2019 and brought in 125 investors. Also, nearby, they have the Tru by Hilton project, a 120-bedroom hotel, which has already attracted 50 investors and plans to start building at the end of the year. They aim to open it in 2027 at Moreno 200, in the heart of the city, on a 1,250 m² plot of land. The estimated investment is US$15 million , a figure that includes expenses in the gastronomic businesses that will be on the ground floor. The ticket to enter starts at US$35,788 for those who want to buy 1/4 of a bedroom, goes up to US$69,550 for half a room and reaches US$135,048 for a full one. There is the possibility of paying it in 36 installments, paying a 30% advance payment.
Investments: “Tru by Hilton” will be a 120-bedroom hotel
Towards the center of the country, in the city of Rosario, another Hampton by Hilton is being built, which currently has 105 investors. Construction began a year ago and it is planned to have 117 rooms and be finished in approximately a year and a half. It will be part of a mixed-use complex, which will have underground parking, a pedestrian walkway and a tower for offices and apartments for housing, which will total an investment of US$30 million and will be built on a 2000 m² plot . The initial ticket for 25% of a room is $44,414,531, rising to $86,315,032 for 50% and reaching $167,602,004 for 100% of the property. It can be accessed with a 30% advance payment and the remainder paid in 24 installments adjusted by CAC.
“We believe that the possibility of owning 25% or 50% of a bedroom was the key to our model, since 2/3 of the owners entered the business this way , something that has been a magnet for small and medium investors,” shares Cristiá and details that the expected rent for their projects is between 7% and 9% annually , depending on the time of purchase: for those who invested in the pit, the rent is 9%, but when they buy once it is finished, the ticket increases and the rent decreases slightly.
www.buysellba.com
