| Author | Message | ||
     Roberto Board Administrator Username: Admin Post Number: 1010 Registered: 12-2004 |
Opening up a discussion for best locations for a second home in Argentina, rental business and /or discuss competitive advantages and macroeconomics of Argentina Vs. US/EU/World. Anyone welcome to contribute... | ||
| Arial Member Username: Arial Post Number: 53 Registered: 10-2006 |
I leave for Bariloche one week from today. I am not sure how long I will be able to stay so I want to go with a plan and make every day count! My goal is to buy a residence. All my eggs have been in one basket in the past--Bariloche--but as a foreigner I cannot buy so must look elsewhere for now. I have been as far north as Mendoza, as far south as Ushuaiah, east to BsAs. Never to the north. Things I LOVE about Bariloche: The sidewalks full of tourists. The tourist season is nonstop. When the ski group leaves the summer group arrives! I love the mountains and the lake. It isn't an agricultural area but I can buy all the frambuesas I can eat there for an incredibly low price! I would like an area where there is a lot to do to attract my children and grandkids. Skiing, rafting, hiking, fishing, spearfishing--that kind of thing. I would like lots of growth possibilities for appreciation. I well may buy more real estate later. I need good infrastructure (cable connection for my computer). Also would like being near an agricultural area because I love Argentina's produce and the nearer the source the better. (But not essential.) I met two Argentines yesterday at the Embassy who asked me if I was going to Argentina, when I said yes they said, be sure to look at Salta. IS this good advice? I would especially like to know the areas to stay away from. For example, I noted above what was written about Cordoba. I am ruling it out based on what you have written here. I don't want to travel all the way up to Salta either unless it meets quite a few of my criteria. Also wonder about Iguazu but it sounds as if the real estate is high priced there. I am interested also in low prices. I surely appreciate all of you who contribute to this forum. Arial | ||
| Apartmentsba.com Intermediate Member Username: Saint Post Number: 137 Registered: 5-2005  |
Arial, Definitely I can see why you want to buy in Bariloche. It's an incredibly beautiful area. I go down at least a few times a year. I love the skiing and in the summer it's also beautiful. As you mentioned, it experiences tourism all year round which is nice if you want to purchase a property for cash flow via luxury rentals. I have wanted to purchase here and even in the past placed offers on properties backing out. As much as I love it there, I simply can't buy in any city where the government restricts buying under my own name (individually with OUT setting up any kind of trust or corporation). I have residency in Argentina and could purchase there but I still don't believe in buying in an area where the government restricts individual investment. You should take everything that you read on message boards with a grain of salt. I always recommend seeing an area on your own. Salta is COMPLETELY different than Bariloche. Many people rave about it but I didn't like it and it certainly doesn't experience the tourism that Bariloche experiences. It's completely different. Certainly you shouldn't rule out any area based on what people say. You should go and see all the areas you might have an interest in. I have clients that have purchased land in Salta. Some very large multi-million dollar tracts of land there. They have a different interest than you. In your investment search, no matter where you are ultimately going to invest in. Ask yourself what your motivations for buying are? Is it capital appreciation? Is it cash flow via rentals? Both? What is your exit strategy? How long do you plan to hold? What happens if there is some emergency, you get sick, one of your kids gets sick? You MUST sell quickly? Those are the kinds of things you need to ask yourself before investing in Argentina (or any foreign country for that matter). Certainly I think there are amazing real estate investment opportunities in Argentina. I'm one of the largest purchasers of real estate in Argentina. Still, in every one of my consultations that I give potential investors, I always go over each person's motivations for buying. Many times, I've honestly told the potential purchasers that investing in Argentina is NOT for them. I'm certainly not saying this in your case as I don't know your individual situation but definitely don't place "all your eggs in one basket". Best of luck to you. Mike | ||
| Arial Member Username: Arial Post Number: 54 Registered: 10-2006 |
Mostly right now I am looking for a home. But in an area with potential. Mike, I have read enough of your posts to know this already, but are you also a seller of real estate? I don't have time to see all of Argentina. I have spent two years focusing on Bariloche, unfortunately, much of it living in Bariloche, and now must change direction. Trying to narrow the field a bit before I leave here. I have noticed Roberto recommending San Rafael to vacationers that want to just go and kick back and not travel. I have a little knowledge of San Rafael and plan to look there, but that's all the plan I have at this time and I am now six days from departure. Arial | ||
| Apartmentsba.com Intermediate Member Username: Saint Post Number: 138 Registered: 5-2005 |
Hi Arial. Definitely if primarily the purchase is a home then you definitely must visit the cities to see which ones you like. Also, keep in mind, renting may be a better option for you instead of buying. Keep in mind I own many properties in Buenos Aires and I don't live in any of them. Why? Because I took the money that it would take to purchase the property and I put it into rental properties instead. The same u$s 500,000 that it would take to purchase my apartment I live in, was used on various rental properties that spin off a lot more than the u$s 2,000 per month I pay in rental. In that way, I simply pay off my rent and I still have thousands of dollars left over. As I always mention, look at the true motivations for buying. You could always invest that money in another type of investment in the USA, Buenos Aires, Uruguay or other areas and simply use the money and lease something to live in. It sounds like you REALLY love Bariloche, so many that makes sense. Arial - I'm just getting geared up now to sell real estate. I've held off for so many years because I was a consultant but I will phase out of consulting probably the end of this year and go straight into buys/sells like a realtor. We typically are only handling sales for other clients that we purchased for in the last several years. Best of luck to you. | ||
| Simon Fawkes New member Username: Expatba Post Number: 10 Registered: 1-2007  |
Hi Arial. If you are going to be buying somewhere as a home then it is extremely important that the location is somewhere you like and feel comfortable in. I would recommend (if possible) that you visit all the areas you've suggested. Personal preference counts for a lot, and you might find that a place other people rave about does nothing for you, equally the converse may be true. Once you have identified the place with the best "vibe", I suggest you rent a place there for at least a couple of months and try living there on a trial basis. This will allow you to start to get to really know the place, and you may find that life under the surface is not what you expected, in which case you can easily move on - equally you might love it and know that buying a home there will be the right decision. Also, living in a place first will allow you to better understand and identify exactly which neighbourhoods (that's the British spelling!) and individual streets you might want to buy on so that you end up with your ideal home in the best place (for you) in that locality. Best of luck! Simon Fawkes Author, The Complete Guide To Real Estate Investment in Argentina, ISBN 1430303980, http://www.amazon.com/exec/obidos/ASIN/1430303980 | ||
| Arial Member Username: Arial Post Number: 55 Registered: 10-2006 |
Thanks, Saint, for the advice. I do have another reason for buying. In my country, Joe Six-Pack is mostly unaware of what is happening but those of us who study the markets know--the inflation rate here is much higher than the figures indicate. The M3 is no longer being reported. The official reason? Because it is too expensive to track it. Part of my own plan is to invest dollars in real estate rather than keep it in dollars. (That should sound familiar to you born-Argentines.) Also the dollar is falling, propped up by foreign investors who still believe in the dollar. My problem is always with timing. I usually think changes are much closer than they are. Therefore, I don't think we are facing an imminent crash. But I still think it is prudent to diversify. As you know, unless you want to pay tourist rents, you need a guarantor to guarantee the rent in Bariloche--someone who owns real estate. I have considered buying real estate in, perhaps, San Rafael (I do like the place) and using that real estate to guarantee rental in Bariloche. As far as I know, there are no limitations on business in Bariloche,only on real estate ownership. However, an apartment rental business like you have would be GRRRRREAT in Bariloche! But unless they change the law, that is out of the question for me. Thanks for your input. Arial | ||
| Apartmentsba.com Intermediate Member Username: Saint Post Number: 139 Registered: 5-2005 |
You're welcome Arial. I agree with you that there are sound reasons for investing in "bricks" here in Argentina. I know MANY wealthy families and upper middle class families. The one thing they ALL have in common is they own real estate. I also believe that there are true problems in the USA Economy ahead. Real estate has already softened in many areas. There is a glut of high priced homes now sitting on the market. Luxury builders like Toll Brothers are suffering write downs and losses. The government is spending money it doesn't have and so are many Americans leveraged to the hilt. Definitely I agree there are problems ahead. Yes, I'm well aware of the guarantor system for renting but there are ways around that. You can find local companies or even deal with the owner and pay 1-2 years ahead of time. There ARE ways around it. Buying real estate only to guarantee your rent isn't a wise decision. There are definitely ways around it and you will find that Argentines would rather deal with an American (or foreigner) vs a local citizen. I've been coming to Argentina since 2002 and did several rentals for myself all with NO guarantor. I did prepay 1 year or more but it was possible. Only on my current place I have been living the last 2 years did I use a guarantor. The system is so whacked here. Although I own many properties here, they wouldn't let me use one of my own properties. They required someone ELSE to put up their property so your rationale for buying a place simply to be your own guarantor might not work anyway. Also, when buying in ANY area, I repeat again, find out your motivations for buying. It sounds like you are buying for some asset allocation/asset protection and also to get your money out of the USA but there are plenty of ways to do that without being forced into buying something. You are spending your hard earned money here (all cash here in Argentina) so invest wisely. Again, look at things like capital appreciation potential, cash flow via rentals, what the laws are in that particular area. You mentioned Mendoza area which also restricts some foreign buying based on the location of the property. Really focus on your exit strategy as well which it sounds like you're not really thinking about right now. Remember that it's much easier to sell an apartment in Buenos Aires or other more "liquid" area than some land in Salta or some place in Mendoza that might not be as easy to sell. Even if you aren't planning to sell now. Ask yourself questions like, "what happens if I got sick or my family member got sick and I HAD to sell?" You don't want to be in some investment that will be very difficult to sell. Buying some piece of land in Salta might be a good investment and the value might go up....but you have to ask yourself if you can easily sell it in the future and how long it will take. As far as Bariloche. I already sold the franchise there last year and the new owner is just starting to get geared up now. www.apartmentsbariloche.com I think he should do well there considering his wife is Argentinean. Best of luck in your search. | ||
| Roberto Board Administrator Username: Admin Post Number: 1012 Registered: 12-2004 |
Arial, real estate in San Rafael can act both as an aid for your Bariloche plans as well as a good investment when it comes to renting it out to foreigners. There aren't too many areas where you can find all what you listed. Salta does offer many of these activities and has an excellent wine region in Cafayate. When it comes to tourism it is possibly underexploited which may indicate potential of appreciation as well as cheaper prices. But the agricultural activities (vineyards) are quite different than what you may see in Mendoza or all along the Cuyo region. It is impossible to determine which areas to stay away from as this depends a lot on your goals. If your *agricultural* desires are related to investing in biofuels may be even the state of Tucuman will do. If you want to buy a second home which you can profit from through tourism you can even consider Puerto Madryn... I have seen greatly inflated prices in my last week trip. I heard through some believable sources that local real estate gurus have stopped using their own money for developments -the traditional domestic way of financing them- which may tell you a bit about the inner state of the market. Michael probably is a lot more familiar with this. In all, it looks expensive to buy *anywhere* but if your goal is to secure rental in Bariloche you may have no alternatives. Please, investigate thoroughly if you can guarantee your own rent. Somehow, I believe it has to be a different person. I am more optimistic about the US. Judging by the currency markets it appears the dollar might be on the verge of a decade long appreciation with higher interest rates ahead and some cleansing of national accounts which will contribute to sustained increase in exports, helping in turn the recovery of manufacturing. Some macroevents seem to reinforce this: faster productivity gains in emerging markets will provide such countries with better growth and increased import power. All speculation, of course... I would also favor moving out of the US but not for a potential economic collapse or a financial crisis. Only because of a probable war with Iran. | ||
| Arial Member Username: Arial Post Number: 57 Registered: 10-2006 |
Roberto, what do you mean, "I heard through some believable sources that local real estate gurus have stopped using their own money for developments"? Are you saying that real estate people in the know in Argentina have stopped investing (risking) their own capital at this point? Meaning that they think the real estate market in Argentina is topping? Arial | ||
| Roberto Board Administrator Username: Admin Post Number: 1014 Registered: 12-2004 |
> Are you saying that real estate people in the know in Argentina have stopped investing (risking) their own capital at this point? That is what I heard. > "I heard through some believable sources.." In argentine lexicon, usually your uncle. Scratch that. Your cousin. (so to be taken with a grain of salt). | ||
| Apartmentsba.com Intermediate Member Username: Saint Post Number: 141 Registered: 5-2005 |
Roberto, Many of these "real estate gurus" never used their own money on these developments to begin with. Most of these projects are all speculation projects. As far as locals not investing in real estate here. The figures would say otherwise. There is still a LOT of buying here and most of it is still locals and NOT foreigners. I know lots of locals that are still purchasing here with their own money and starting new developments, buying land, building buildings, etc. I still see further room to go up. | ||
| Roberto Board Administrator Username: Admin Post Number: 1015 Registered: 12-2004 |
Good to know, then. What I've heard was in reference to gated communities' developments such as La Magdalena Tenis and others... | ||
| Apartmentsba.com Intermediate Member Username: Saint Post Number: 142 Registered: 5-2005 |
Ah...gated communities are an entirely different arena. Most locals that are investing as a real estate investment HAVE stopped buying in those types of real estate investments. Many have figured out that tourism is here to stay and they are buying apartments that can easily be rented to foreign tourists. Many of the gated communities are outside of the main touristic areas and are not a good investment for them compared to apartments for short-term rentals. Not even counting the foreign tourists, local rents are skyrocketing at a very quick pace. Not only rents for residential properties but also for commercial as well. My office lease has gone up 100% since 2 years ago. Real estate is still one of the only places for the locals to invest. I think you will see my predictions for more mainstream financing and mortgages coming into the picture in the near future. The banks are all itching to get into more mainstream mortgages provided that the government allow them to actually easily and swiftly foreclose on those people that are in default. My prediction is to look for sweeping changes in the law in the near future ;) |
