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Roberto
Board Administrator
Username: Admin

Post Number: 30
Registered: 12-2004
Posted on Tuesday, June 28, 2005 - 8:12 pm:   Edit PostPrint Post

Post your real estate ideas or experiences here. Many lurkers read this forum and will benefit from your knowledge.
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Apartmentsba.com
New member
Username: Saint

Post Number: 8
Registered: 5-2005
Posted on Sunday, July 03, 2005 - 11:09 pm:   Edit PostPrint Post

Roberto,

I applaud you for starting this section. I got started in real estate here shortly after the crash. If I could have changed one thing in my life it would be to have gone with my desire to start purchasing real estate immediately following the crash. I waited over a year for things to stabilize and I'm glad I started buying properties.

Although property prices have gone up since the devaluation I believe there is a lot of room for growth if you are buying in the right areas and are not overpaying for the property.

I strongly believe that years down the road, those that purchased property here as an investment will feel fortunate to have purchased here.

Many investments are risky in Argentina but I feel real estate is one of the safest plays and I'm very happy that I decided to jump in. Time will tell who is right or wrong but these message boards will be around for a long time so we'll see who made the right call.

Good luck to all.
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Roberto
Unregistered guest
Posted on Monday, July 04, 2005 - 4:57 pm:   Edit PostPrint Post

> start purchasing real estate immediately following the crash.

hehe..
I thought it could be one of those rare opportunities too. Once in a lifetime, so to speak. But like it happened with the vast majority of argentines I got caught in the downfall and money was scarce. The average guy had to sell assets actually. Yeah, I know. That is the reason why prices were rock bottom. I agree with you. The recovery of real estate prices after the colossal debacle is a testimony of how good an investment this could be.
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Apartmentsba.com
New member
Username: Saint

Post Number: 9
Registered: 5-2005
Posted on Monday, July 04, 2005 - 5:04 pm:   Edit PostPrint Post

Exactly. Most people don't realize that property purchases are 100% in cash. When I say cash I mean it literally. No one trusts bank wire transfers or checks here. It's ALL cash. I just bought a house a few weeks ago for u$s 400,000 for a client. It was all in cash and they counted every single $100 bill. They won't even allow electronic money counters. They want to feel and inspect each and every bill. They will hand you back bills that have a mark or handwriting on them. It's comical.

I was here when all the banks closed and people couldn't withdraw their money. I felt horrible for these locals. Imagine if the same thing happened in the USA. These nuts would be blowing up banks. People here for the most part were very civil simply banging on pots and pans. Imagine if the banks in the USA wouldn't allow you to take out ANY money for months. It would be chaos.

That is exactly why many people were selling to sell at firesale prices. They simply needed cash. I still wish I bought during this time but part of me would have felt like I was preying on people in a bad situation.

I honestly feel that if you buy in the right areas here for the right kinds of property, your money will be as safe as cash sitting in the bank. I have properties I bought last year for $100,000 that I'm getting offers of $160,000 now. Simply amazing.

Good luck all.
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Roberto
Unregistered guest
Posted on Monday, July 04, 2005 - 5:37 pm:   Edit PostPrint Post

> It's comical.

Actually, it is not. This insignificant detail tells you a lot about us. Hidden behind a seemingly hilarious fact there are important lessons and alerts to pay attention to. I would not discard this valuable information. It may help you in the future.

Yes, it would be chaos here now. But back in the days when Roosevelt confiscated all public gold I don't think it was. Remember, the crisis of a few years ago was enormous. The country defaulted. Even with a more logical and reasonable President, default was just around the corner. At present, there are some indications that Kirchner is more astute than what anyone ever envisioned. And that is, he knows how to make money... and keep it here, in argentine hands. Even with the perennial shadow of corruption behind him I feel he has done well for the country, in general. This may have been conducive to gain in confidence and, in turn, price appreciation.

Those numbers that you are managing are quite good in terms of argentine values. I haven't heard of too many properties at close to half a mill. down there, whereas here in Miami a new apt 2 bedr. ocean front, 1700 sq feet (miami beach) would go for 1.5 mill And a 3 for 2.5 which leads me to believe bubbles may be popping everywhere. Are argentine prices escalating as fast as in some other regions (UK, pockets in the USA, etc) in your opinion?
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Apartmentsba.com
New member
Username: Saint

Post Number: 10
Registered: 5-2005
Posted on Monday, July 04, 2005 - 5:54 pm:   Edit PostPrint Post

Hi Roberto.

No, I don't discard it. I just find many ways of which business is done here primitive and I'm sure you will agree compared to the USA/UK.

There are things I hate about my new country but the number of things I love about it are more than the things I don't like about it. Still, doing business here can be challenging.

I agree with your thoughts of Kirchner. He is doing a great job IMHO. Actually, my partner's family was neighbors with him. He is from the South of Argentina.

You are exactly correct. There are few properties here at $500,000+ Many of them are in Recoleta. On a stretch of Avenida Alvear where I live I have been inside many apartments while I was looking to buy. Many million dollar plus apartments on this posh street. The number of people that can afford that size property is few and far between so they take longer to sell. Most of the properties people are buying are under u$s 120,000. What I'm doing with rentals is the reason why the capital appreciation is so great.

I compete against the hotels not other cheap apartments. People wanting to buy my apartments are buying them as a business, not just as real estate. The real estate alone on some of my apartments aren't worth what people are offering. However, as a business it is worth it. Look at http://www.apartmentsba.com/system/productos_detal le.php?id_prod=286 It doesn't take a rocket scientist to see what the potential rate of returns are like.

No, Argentina prices are no where rising as fast as some areas of the USA and UK. Prices ARE rising but they are steadily. The reason for my extremely high offers is because I have turned each apartment I own/manage into a business.

Hope that helps.
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Roberto
Unregistered guest
Posted on Tuesday, July 05, 2005 - 12:33 am:   Edit PostPrint Post

> I compete against the hotels not other cheap apartments.

I read it on the other thread. Way to go. Excellent idea. We do get requests for apartments as opposed to hotels, specially for stays longer than 2 weeks that may even include spanish lessons. Hotels can't compete with your offer.
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Apartmentsba.com
New member
Username: Saint

Post Number: 11
Registered: 5-2005
Posted on Thursday, July 07, 2005 - 10:50 pm:   Edit PostPrint Post

Hi Roberto,

Thanks. Even on stays as little as 2 nights we are getting many many bookings. The reason is the good reputation of being dependable. All my employees speak English and meet our clients at their apartments upon arrival. I use a company that brings them to our apartments. They get a business card from the person checking them in. That person works sort of as a concierge during their stay if they have problems. Most of the properties I am buying for myself and my clients are in Recoleta close to where most of the nicer hotels are.

Are properties are double or triple the size of hotel rooms, they have really high end furniture, high-speed Internet access, USA phone lines, free local cellphone included with the apartment, DVD, 30 inch flat screen TV, nice stereo. What's not to like? The hotels don't provide these things.

The prices of hotels are going up very quickly with the boom in tourism. Some hotels have raised their prices 50% - 80% in the past year and there are no indications that tourism will slow down. Argentina, IMHO is only beginning to be discovered by many Americans and Europeans.

People told me several years ago that my dream to build this kind of company was not doable. They told me there was no market. Instead of listening to them...I helped create the market. Build it and they will come so to speak.

I continue to believe that property prices will continue to go up over the next decade. I also believe that more financing will be available in the future. I'm sure it will NEVER be like in the USA where anyone can get a loan and pay off their house/apartment for 30 years. It's a house of cards in the USA. Interest rates go up 1% and many people can't afford their house payments.

I believe there are big problems about to take place in the USA. The stack of cards will fall and they will fall hard and fast. It will be a chain reaction.

Consider that even if 50% mortgages come into the picture or really any type of mortgage, it will spur local buying. Time will tell who was right or wrong. I've posted on several public message boards since 2002. I have been dead on target on tourism, real estate and the exchange rate. We will see if my predictions prove to be correct on the real estate market here over the next several years.

The great thing about public message boards is most are around for a long time so you can see if someone was on target or dead wrong.

Add to the fact that the local utility companies can't really increase the utility prices too much. It makes owning property here very attractive. You can still buy some property in Recoleta for $1,300 per sq. meter. If you avoid areas like Puerto Madero where property is as high as $3,000 per sq. meter... I truly believe you can make some excellent returns over the next several years. Add to the fact that there are 0% capital gains taxes and only a 1.5% transfer tax when you sell and it becomes even more attractive.

Good luck all.
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Michael O
Unregistered guest
Posted on Tuesday, August 23, 2005 - 12:20 am:   Edit PostPrint Post

Hello,
I just noticed this message board and coincidentally, I too am interested in purchasing a condo or house in Buenos Aires. I am especially looking at what the rental outlook would be for the tourism business. I am interested in learning more of course. I do like your position that your properties are attracting tourists because your rooms are much more accommadating. I can use your advise on this matter.
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Apartmentsba.com
New member
Username: Saint

Post Number: 22
Registered: 5-2005
Posted on Tuesday, August 23, 2005 - 12:34 am:   Edit PostPrint Post

Michael,

You can feel free to email me if you want. mike@apartmentsba.com I have taken the time to post very detailed information on buying real estate as an investment in Buenos Aires on my website. My pace for buying has stepped up for my clients. I was being hired on average 1 time per week. Last week I was retained by 5 people and I see no slowdown in sight.

The investment community is discovering what I did a few years ago. That real estate is a stable play here. When you couple it with the tourism industry the returns can be really amazing.

Tourism is skyrocketing in Argentina and I don't think there is any slowdown in the near future. I think the world is only starting to really discover Argentina as a tourist destination. Consider that 20% of our business is also corporations and we began to market to cosmetic surgery patients that are coming down in droves because of the high quality medical care and the excellent physicians.

Really my business plan isn't rocket science. I'm buying in the same areas as most of the 4 and 5 star hotels. It's no fluke they are all in the same area. Then my apartments are 2 to 4 times the size as the average small hotel room. We put in high quality furniture, lighting, bedding, mattresses, etc. Then the best part is that it's often 1/3 or 1/2 the price of an expensive hotel.

Consider that now I see some hotels like the MGM Grand Las Vegas following my lead. They are building the first ever condo/apartment-hotel on the Las Vegas Strip. They are starting to build these in Miami and other big cities.

The world is discovering that apartments are a viable alternative to a small hotel room. Granted some people will always go to a hotel but savoy travelers that demand free local lines, cellphones, USA phone lines, high-speed wireless networking, luxury furniture, etc. I think this is only the beginning.

This business can work anywhere there are expensive hotel rooms. I just sold my franchise to Rio de Janerio where I think it has just as good potential and I'm in the midst of finalizing the franchise for Costa Rica.

BA is a special place though and I think real estate here will be solid the next decade. My posting about mortgages coming into the picture was spot on. I am now starting to see 50% mortgages here. Once they are mainstream, property demand will skyrocket. Guess what it will do for property prices?
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londonmuppet
Unregistered guest
Posted on Saturday, September 10, 2005 - 9:19 pm:   Edit PostPrint Post

as a Brit and IMHO... Michael you have a sound business plan that obviously works and is sucessful.. you aim to provide equal or better accommodation for less money than staying in 4/5 star hotels.
Marketing must be a problem though when competing with hotels. How do you encourage them to use you as opposed to staying in a Hotel?
You must know your customers really well. Is this not a bit of a niche market?
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Apartmentsba.com
New member
Username: Saint

Post Number: 25
Registered: 5-2005
Posted on Sunday, September 11, 2005 - 2:46 am:   Edit PostPrint Post

Hi Londonmuppet,

Yes, the business plan is sound and has been going well since I started the company in 2002. I didn't get really serious about it until 2004 when I left my executive career and sold my house, cars, etc. to move to Buenos Aires full-time and started purchasing properties.

The business is solid and as you mentioned, we simply have a better product for the money than 4/5 star hotels. Granted there will always be a segment of the population that has to stay in hotels but people are becoming more independent around the world when traveling. My staff also makes it very easy meeting them at the apartment at the check-in/out and they ALL speak English.

Marketing is not too big of a problem. I advertise on vacation rental websites like VRBO.com and also on Google. Also, prominent books like Lonely Planet have listed us in their 2005 Buenos Aires Guide. Marketing like that is something u$s million couldn't buy. You can't "buy" your way into a travel book like that. Also, HGTV flew here a few weeks ago to do a special show on my company and also E! TV has contacted us about doing a special show.

This IS a niche market but when you think about it, tourism will explode even further here in the next several years. Argentina isn't the "secret" it was the past few years.

Our product sells itself with higher end amenities that the hotels don't offer. Free local phone calls, free local cell phones, Wi-Fi high speed Internet access, USA phone lines in the apartment, 2 to 3 times the space of a hotel room at a fraction of the price. Flat screen big TV's up to 36 inches, DVD players, high end luxury furniture and lighting.

We are starting to go higher and higher end on our apartments because I found that people are willing to pay more for a better product. Our most requested apartments are those that we spent more money on.

There is no secret to my business plan. In fact, I pretty much spelled it out on my website (www.apartmentsba.com) . The thing is that it takes a lot of money to do what I'm doing. Property purchases are ALL cash (literally) with no financing available for the most part. Renovations, high end furniture all costs money. We are averaging now u$s 25,000 - $30,000 in furniture/bedding/lighting/electronics alone on each property purchase. Hotels and other apartment owners simply refuse to do that.

I have apartments like AP1 on my website. I bought that apartment for $130,000 and we are spending a whopping $37,000 on renovations and another $20,000 on furniture. But it will be a penthouse apartment on the 8th and 9th floors with 3 bedrooms. We are charging $200 a night and it is already booked for next year with NO photos. Just the description and reputation of my company alone. $200 a night won't get you a really good suite at the Four Seasons or even the Loi Suites Recoleta these days. This apartment will sleep up to 6 people (1 King bed, 1 queen bed and 2 twin beds). 3 cellphones included with the apartment, wi-fi high speed internet access, high end furniture, everything new. If you have 6 people that is only $33 per night per person. If they tried booking 3 rooms at a high end hotel it would be at least $700 per night.

Everyone wins. My client will NET an estimated 13%-15% per year on his total investment, our clients get a first class property at a fraction of the cost of a high end hotel.

What I'm doing isn't rocket science. It just took a lot of guts to move down here and get organized and make a serious business out of it.

My idea about franchising was just sort of an idea but Rio de Janerio is sold and that owner is already making money (www.apartmentsrio.com) I just sold www.apartmentscostarica.com . I'm negotiating terms for apartmentscuba.com as well as the Amsterdam franchise.

The best thing that investors like is what I'm doing is not specultation. I have a working model that works.
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rcpiper
Unregistered guest
Posted on Monday, September 19, 2005 - 7:30 am:   Edit PostPrint Post

Saint -

Impressive plan and congratulations on making it work. We are looking for RE investment in South America but would like it to be in an area we would actually like to live for a while. Recommendations? Thanks!
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Apartmentsba.com
Junior Member
Username: Saint

Post Number: 30
Registered: 5-2005
Posted on Monday, September 19, 2005 - 10:32 am:   Edit PostPrint Post

Hi RCPiper,

Thanks for that nice post and for the congratulations. I'm really gratified that everything is working out. Many times the locals tell me that I have luck on my side. Then I laugh and tell them it really had nothing to do with luck. I left a wonderful life in the USA, sold my house and cars, cashed out most of my 401k to do what I'm doing. I work about 16 hours a day. Ha, ha. I guess a bit of luck as well but mostly hard work, long hours and a lot of investment capital.

The answer to your question really depends on many factors. Are you mainly buying as an investment or mainly to use as a residence. The biggest mistake many make is they buy with their heart instead of with their head. I posted a good bit about that on my website so you can read about it if you're interested. It's on my website under my consulting section.

I have traveled throughout South America to most countries. Honestly, I'm living in what I feel is the best city in South America. Buenos Aires is one of the most cosmopolitan cities with a high quality of life. There are few cities in South America that can offer all the amenities that BA can.

Again, ask yourself what things do you enjoy. The beach? What is your definition of "a while"? Many cities in South America the costs involved with buying are high when you factor in realtors, lawyers, money transfer firms, etc. it's not wise to try to "flip" a property unless you will be there for a while.

Where I would live is much different probably than where you would want to live so take some time and explain what it is you enjoy. If you enjoy the beach then of course you wouldn't like Buenos Aires. Places that come to mind would be places like Punta del Este, Uruguay. I flew there to look at real estate. They have some of the nicest properties of anywhere i have been in South America. I almost bought an apartment there.

The problem was that I looked at the market and it's a VERY seasonal town. It's really only utilized 2 months out of the year (end of December till end of February). Still, with rentals just those 2 months you can make 6% returns on your investment so still worthwhile but why do that when I can make almost 20% returns renting in Buenos Aires?? You really need to study the market of where you are buying. Don't rush into anything. Generally ask yourself if you would act this way in your home country. Never act in a way or do something that you wouldn't do in your home country. Take purchase price out of the equation. Would you do things like use a lawyer that spoke no English in the USA/UK that you communicate with? Would you do things like wire money into an account of a person you knew nothing about or had no references for? Exactly! So don't make the same mistake in South America. On ALL cash transactions there are NO room for mistakes.

Buying real estate in South America has many factors. Real estate is much much cheaper than the USA/UK/Europe so people somehow get mezmorized into thinking it would be "fun" to buy here. However, you really need to look at the numbers to see if it makes sense for you. In many countries around the world there is financing and mortgages. Here it's cash on the table so it's a different world than what most people are use to.

Good luck.
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franco francisco
New member
Username: Francisco

Post Number: 1
Registered: 9-2005
Posted on Monday, September 26, 2005 - 12:32 pm:   Edit PostPrint Post

Roberto,

Hello, i am new to this board and am going to be in argentina in a few months. I was wondering if there is anyone in particular that you use as far as real estate and legal advice is concerned?
I am propbably going to be investing in the country.
So any advice would be greatly appreciated.

Gracias
F_Francisco
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Roberto
Board Administrator
Username: Admin

Post Number: 142
Registered: 12-2004
Posted on Monday, September 26, 2005 - 12:57 pm:   Edit PostPrint Post

Welcome, Franco!

On a personal basis I have lifelong argentine friends who are involved in real estate and I usually consult with them. However, I am under the impression that you are looking for a more professional type of service in which case you should do some serious DD, specially when it comes to buying anything in Argentina. A good start is this same forum. Several of our members, such as "Saint/Apartmentsba.com", seem to have extensive experience in this field. You can read our threads and that will give you an indication of where some guys are standing. Every now and then they participate and you will have a chance to interact... There are links to their websites that you can explore as well.

Besides this, there are some reputable, large real estate offices in Buenos Aires that can provide you with useful advice too. Whatever you do you, I'd suggest that you explore two or three different venues.
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Langdon Doty
Unregistered guest
Posted on Wednesday, September 28, 2005 - 3:38 pm:   Edit PostPrint Post

Hi,

I want to buy a modest 40-50 acre vineyard in mendoza argentina. i've seen prices ranging from 100-250K. I have several friends who will join with me so coming up with at least 100K will not be a problem. we want a place that makes an income through grape, olive, fruit sales every year which would serve as a haven away from NY.
Are there any reputable real estate agents you could recommend in the mendoza region who could help us. i will be in that area around early december to check out properties.
thanks
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Apartmentsba.com
Junior Member
Username: Saint

Post Number: 31
Registered: 5-2005
Posted on Wednesday, September 28, 2005 - 4:20 pm:   Edit PostPrint Post

Thanks Roberto for the forum. I have helped several investors from around the world. I can honestly say none of them NETTED less than 12% last year on the rental income and capital appreciation was at least 20%. We don't promise any returns but I think you can look at the business model for real estate here and see it's one of the safest plays in investment here.

Anyone buying here just make sure you know and understand the laws, you use good realtors and excellent attorneys. This isn't the USA/UK and the industry is severely unregulated so you can get cheated easily.

Langdon Doty - Prices range all across the board on property. Just keep in mind that that type of investment has a lot of inherit risk. Also, if it's a new property and not existing crops you are at least at the very minimum 3-4 years from your first harvest. I know a lot of people that thought it would "be fun buying a vineyard" and they got burned. A lot of variables with weather, crops, etc.

Good luck.
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Langdon Doty
Unregistered guest
Posted on Wednesday, September 28, 2005 - 4:42 pm:   Edit PostPrint Post

Thanks for responding so quickly.

Our strategy is NOT to rely on rental income initially, but income from the farm, which these listings claim are from 40-80K per year selling the grapes, olives, fruits, etc, depending on the cultivation. This income stream can be improved by one of our investors, a lawyer/sommelier and wants to start his own label, rather than just selling the grapes to local producers. Eventually we would offer cabana rentals on the property as it is in a heavy tourist area, close to skiing, etc. I've checked your site (impressive) and wonder if you've had people approach you for these "vineyard ploys" incorporating rentals and having farm income as a viable income stream as well.
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Apartmentsba.com
Junior Member
Username: Saint

Post Number: 32
Registered: 5-2005
Posted on Wednesday, September 28, 2005 - 6:10 pm:   Edit PostPrint Post

Hi Langdon,

Great. As long as you have a realistic expectation. I have talked to several investors that had dreams of starting "their own labels". Keep in mind that there is a lot of competition and people that know the business inside and out so you are competing with that type of system. Also, the system of business here in Argentina is extremely corrupt. (http://www.transparency.org/cpi/2004/cpi2004.en.html#cpi2004) I can't emphasize this enough. Most Americans that move here or started businesses here can't adjust and pack up and go back to the USA.

I would take any "listings" with a big grain of salt. A big part of the equation should be "depending on the cultivation". The rentals could be a good option depending on the location and how you geared it. I have been approached for a Mendoza franchise by a local Porteno but I prefer to sell these franchises to Americans/Europeans that I think will build up the business. Luxury rental properties throughout Argentina would work well. I stayed in Mendoza and stayed at the Park Hyatt Hotel. I paid about $275 a night. It was great but they charged me u$s 13 a night or so for high speed Internet. Luxury property rentals around the world are becoming more popular. You might want to strongly consider the "Cabana rentals" option. The cost of labor is cheap and you can find dependable bilingual staff for not a lot of money.

I have had a lot of investors that flew to Mendoza to look at vineyard ploys but most have walked away when they looked closely at the numbers. I recommend you really dig deeply and look at the numbers or make a formal business plan before proceeding. The biggest problem with investors in Argentina is often times they look at the cheap price of property/land and it changes their common sense. Typically ask yourself if you would do the same thing in the USA or UK or wherever you are from. Would you use a lawyer that you couldn't speak English with?? Would you use a realtor you couldn't communicate with? Would you wire funds into a bank or person you don't know anything about? Remember deals here are all cash and there is no room for mistakes.

Email me if you want and I'll try to research reputable realtors and lawyers in Mendoza for you. Good luck.

mike@apartmentsba.com
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Vladimir
Unregistered guest
Posted on Thursday, September 29, 2005 - 11:23 am:   Edit PostPrint Post

Re: Foreign Exchange of Argentine Pesos

Hi everyone! I am thinking of buying a business in BA that has real estate. How do you convert Pesos to Dollars? Any suggestions would be great!
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Apartmentsba.com
Junior Member
Username: Saint

Post Number: 33
Registered: 5-2005
Posted on Thursday, September 29, 2005 - 11:54 am:   Edit PostPrint Post

There are several money exchange places that can accomodate a transfer. Just make sure you use a reputable company/bank as there are a lot of conterfeit bills floating out there. There are a ton of places on Corrientes near San Martin.

Traditional banks usually have bad exchange rates. Walk along Corrientes and San Martin and look for the one that offers the best exchange rate. Then if it's a big transaction they might give you an even better rate.

If you are buying a business or real estate, most likely it's in u$s. The majority of people buying go through a "Private bank" to avoid conversion fees. Most charge around 1%-1.5% of the total amount you are transferring. That usually is the cheapest method.

You should note there is NO free way to get u$s into Argentina other than carrying it on a plane and not declaring it which I do NOT recommend for obvious safety reasons. ALL u$s coming into Argentina is legally converted to pesos (at a horrible exchange rate) but since property is priced in u$S it's converted back to u$S at a bad rate.

There are a few banks that can do it for a decent rate but the amount of paperwork can be extreme. The easiest method although not totally "white" is to use a private bank or money exchange place that will simply charge a flat %.

Good luck.
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Roberto
Board Administrator
Username: Admin

Post Number: 150
Registered: 12-2004
Posted on Thursday, September 29, 2005 - 1:15 pm:   Edit PostPrint Post

Or have a connection, as it is always the case.

A few more points, adding to what Michael just said. On changing your money NEVER pay attention to the guys on the street whispering "cambio, cambio". This is high risk. Not because you will get your money stolen but possibly because you may get counterfeit bills or a poor rate of exchange. It won't be hard to find a reputable currency exchange office.

Many real estate transactions also ocurr abroad (the accounting, of course) as most argentines and institutions have accounts in foreign banks. This may mean as close as Montevideo, Uruguay. So even if you find it difficult to finance a real estate purchase in greenbacks, you can still 'exchange' your dollars abroad for an argentine asset. For daily rates of exchange you can always check our currency converter
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Apartmentsba.com
Junior Member
Username: Saint

Post Number: 34
Registered: 5-2005
Posted on Thursday, September 29, 2005 - 1:27 pm:   Edit PostPrint Post

Yep...connections are always great. I'm sure you can email Roberto and he or his family members have people they can recommend. I NEVER intended people to go to cambio cambio guys. There are legit banks/companies in the area I mentioned. Listen to Roberto. NEVER change money with people on the street. Never!

The number of transactions occuring aboad is VERY VERY low. I know. I'm buying about 1-2 per week now. Most Argentines, even if they have banks aboad want cash. It's getting more difficult for them to transfer funds back to Argentina as the government believe it or not makes it not so easy for them.

A tremendous amount of local money went to offshore banks in Uruguay, USA, Europe after the crash. Most locals don't pay taxes or cheat on their taxes so now the government wants to see all these people that are replenishing their accounts here from abroad. You will find most want CASH to close on property with no bank wires outside of Argentina. Cash is king.

Most people are surprised that literally cash is used at closings. It's quite a site to see.
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Roberto
Board Administrator
Username: Admin

Post Number: 151
Registered: 12-2004
Posted on Thursday, September 29, 2005 - 1:35 pm:   Edit PostPrint Post

Ha! When is Kirchner taking the lead and bringing back his Santa Cruz' USD 500 million he sent to a Swiss bank during the debacle? But that's OT, sorry.
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marcello
Unregistered guest
Posted on Sunday, October 09, 2005 - 6:55 am:   Edit PostPrint Post

Hello!

I happen to have in Tenerife (Canary Is.), since 2003, a similar business Saint has (www.exxostenerife.com).
I wanted to ask you all what do you think about investing in Cordoba city... I think it's mostly a student's city, but also some big multinational companies are doing business there, so what kind of investment would you advice, if any?
Thanks in advance.
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Apartmentsba.com
Junior Member
Username: Saint

Post Number: 35
Registered: 5-2005
Posted on Sunday, October 09, 2005 - 10:09 am:   Edit PostPrint Post

Hi Marcello,

Just my opinion but I would stick to other areas of Argentina that has more tourists. This is just my opinion. There are so many cities around Argentina that are experiencing huge amounts of tourism and Cordoba doesn't get so many compared to other cities. In fact, most of the people I know from Cordoba bought real estate in Buenos Aires. It's a safer play and easier to unload when they want to cash out.

I assume when you're talking about "investment" you are talking about real estate since this is the real estate section. Most of the major construction is geared towards the wealthy or foreigners. Here is an interesting article that came out yesterday on Reuters.

http://www.thedailyjournalonline.com/article.asp?C ategoryId=12394&ArticleId=199657

Still, if you are dead set on investing in Cordoba maybe a hostel or something like that could work. Good luck.
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marcello
Unregistered guest
Posted on Wednesday, October 12, 2005 - 6:24 am:   Edit PostPrint Post

Hello Saint!
Thanks for the very revealing article, which leads to another interesting source of information (www.reporteinmobiliario.com).
Your assumtion was correct, as "investment" I meant real estate... but not holiday/short term lets. Being in the tourism industry for almost 20 years, I tend to care very much about customer satisfaction, and since I don't intend to move there permanently, I would never have a business like yours if I'm not able to oversee it on a dayly basis.
Besides, I don't have THAT MUCH cash, so my idea was residential/students rental income, long term.
That's why I was asking about Cordoba, but if you think something like that is preferable and easier in Buenos Aires or somewhere else, I'd like to have you opinion...
Thanks again!
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Apartmentsba.com
Junior Member
Username: Saint

Post Number: 38
Registered: 5-2005
Posted on Wednesday, December 28, 2005 - 9:14 pm:   Edit PostPrint Post

Hi Marcello,

I don't just believe "real estate" is a wise investment for holiday/short-term rentals. I have many, many, many clients that are purchasing real estate here simply to buy and hold or buy and flip in a few years. So far, I haven't been wrong on the real estate market here and I have invested quite a substancial amount of my own money in the real estate market in Buenos Aires. I'll continue to purchase here.

Keep in mind that many people are buying real estate here not only for my business model but also because they realize that BA is a world class city and property here is undervalued. There is no other serious form of investment here in Argentina that is stable. Real estate is the safest play for most locals and foreigners.

I'm not saying real estate isn't a good investment in Cordoba. Honestly, I don't know the market in Cordoba. My point is that I met many people from Cordoba and they are very savoy individuals that have done well in their respective fields. They aren't buying real estate in Cordoba (and they live there). They are buying real estate in Buenos Aires.

As an investor I look at all possible trends and directions of the market. All my properties have appreciated substancially in value and I see that trend continuing over the next several years. Real estate prices just surpassed where they left off before the crash only in February 2005. I truly believe there is a lot more upside potential.

Property in Buenos Aires I believe will be much easier to unload when you are ready to sell vs. in Cordoba. There is always a time to buy and there will be a time to sell in the future. I see a lot more years of upward potential but there will be a time to sell and I'll be there selling hopefully dozens of personal properties.

Best of luck to you in your investments and your personal life.

Mike
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Billabongchick
Unregistered guest
Posted on Wednesday, January 04, 2006 - 7:18 pm:   Edit PostPrint Post

Hello, looking for some advice on buying a small farm/ranch style property about a max of 1 1/2 hr from BA. We want to buy some horses and tap into holidays doing trail riding/polo/tennis etc combined with day trips to BA. It would need to have at least 10 acres of land for horse pasture. We also want some kind of alternative income generated from fruit/cattle etc. From reading the postings on this site it looks as if the whole wine thing is a little precarious to get into so was wondering if anybody has any advice or good ideas? I have personally stayed out near Belgrano / Monte a few times and this was to me a great place for riding and a comfortable distance from the airport but I know little about farming income in this area.
Is around $300,000 realistic to get somewhere like this with a main house and chalets or farm buildings that could be converted into guest lodges? Ideally we would like to spend more like $200,000 to enable some money to update/renovate. How much would you expect to pay a caretaker family if you give them lodgings (ie, a groom or stockman and a wife who could cook/clean for guests?)
Also is it still not possible for non Nationals to get a mortgage or loan towards cost of property? What would you pay in taxes each year? And any other monthly/yearly costs that would need to be taken into account for a ranch property?
Any advice appreciated!!
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Apartmentsba.com
Junior Member
Username: Saint

Post Number: 41
Registered: 5-2005
Posted on Monday, January 09, 2006 - 9:42 pm:   Edit PostPrint Post

Hi Billabongchick,

I don't know too much about farms. I specialize in Buenos Aires but I do know that land outside of Buenos Aires is much much cheaper. 1.5 hours away you should be able to get something very affordable. I know someone that bought some land and an old house and they paid only u$s 50,000. She was using it for her polo horses. Many properties outside of the Capital are priced in pesos instead of u$s like all the properties in the Capital.

I don't know anything about income from farming, fruit farming, etc. $300,000 should buy something very very nice.

Salaries here are very low. That far out and it should be even lower. If you are letting them live there too that should make things even cheaper. An average maid here makes 6 pesos per hour or 700 pesos per month (u$s 233). I pay mine 900 pesos a month (u$s 300) and that is considered very good for BA maid standards. She cleans my house everyday, does my grocery shopping and takes clothes to the laundry, irons my clothes, etc. I also own many properties which she helps clean. She works Monday - Friday about 9 hours per day.

Needless to say, you should be able to get someone very affordable. The cook/maid probably about 700 pesos per month or less (u$s 233) and the main caretaker maybe around 1,000 pesos a month (u$s 333). Of course if you want someone educated or bilingual the salary will be more expensive.

It's almost impossible for foreigners to get mortgages here. 100% cash. I do have clients that got home equity lines of credit in the USA/UK at low % rates and then buy here. Mortgages here are new and the terms are 12% interest per year, 50% down over 10 year maximum. Also, you have to have a really good job to get a mortgage here.

Good luck!
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Billabongchick
Unregistered guest
Posted on Thursday, January 12, 2006 - 2:53 pm:   Edit PostPrint Post

Great- thanks for the advice- I didn't know that prices would drop so dramatically even only 1 1/2 hrs from BA. The roads seem fairly good in the area I would be interested in so it will be interesting to do some house hunting and pricing if we can get out there in November.
One other question; what sort of temperatures can you expect in the coldest winter months? Have only been out in summer months! Thanks!
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Donnie B
Unregistered guest
Posted on Friday, January 13, 2006 - 12:20 am:   Edit PostPrint Post

I am interested in real estate in Argentina and have some concerns.

From my preliminary research I understand the following is true:
- Argentine Peso used to be about 1 US dollar
- now the Peso is worth about a third remains weak
- real estate is transacted in US dollars and therefore the prices did not suffer (relatively)

When I started this research, I was hoping for this scenario:
- a big drop in real esate prices in Peso -> a big drop in valuation of Peso.
If this scenario was to happen then buying power for the dollar would have been enormous for the real estate and once real estate and peso rebounded to the pre-bankrupcy level, BINGO I've made a fortune. This is almost what happened to South Korea in 1997.

This leads to my question:
I hear optimism in Argentina's real estate market largely based on increased tourism putting some other insignificant things aside. Coming from a real estate background, I know that longterm real estate market has to be supported by the domestic demand but if people are still getting paid in pesos that have devalued substantially and houses are priced in US dollars that seem to be going up. Seems to me that it's matter of time the demands fall short because of affordability and pressure will come down on real estate.

I have done very well investing in other countries in post-bankrupcy situations; took an advantage. And I'm sure Argentina is a beautiful, nice weather, beautiful girls type of country. But the advantages that are usually available in post-bankrupcy country do not exist in Argentina, in my opinion. Furthermore, sometime in the future the gap between average income and housing affordability has to be reduced. Those are my two cents. Please let me know if I am wrong or if you have any opinions. Thank you.
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Roberto
Board Administrator
Username: Admin

Post Number: 272
Registered: 12-2004
Posted on Friday, January 13, 2006 - 10:00 pm:   Edit PostPrint Post

Donnie, you may be overlooking a few things in your analysis. Plenty of argentines have accumulated savings in dollars due to the country's instability. Thus, real estate price appreciation may not end up affecting demand as much as your scenario proposes... even if salaries remain low. Furthermore, many have kept their savings abroad and have these funds at their disposal should the right opportunity comes along.

As for post-bankruptcy situations it might be a good idea to consider that Argentina has grown an average of 8/9% per year in the last three years and is about to repeat this performance in 2006, so the days of bargains are long gone. Prices may still look *very* cheap when compared to pocket bubbles in the US (San Diego, San Fransisco, NY, etc) or the UK.

In my humble opinion the key to real estate investment in Argentina does not lie in a potential price differential as in post-bankruptcy situations but in finding a business model -real estate based- that will allow for long term profits. A perfect example is Michael's business model (apartmentsba.com) which is isolated from potential disruptions in the economy and targets a very particular segment. His model may also benefit from price appreciation but in my view that is just the icing on the cake.

In Argentina, what you really want is to find those niches that can provide you with a good degree of protection should things take a turn. Remember, starting on 2006 the government has moved further to the left by placing more of their 'montoneros' base in key positions of power. There are no immediate risks and Argentina still offers great potential in the mid-term. But you should always look further down the road here.
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Apartmentsba.com
Junior Member
Username: Saint

Post Number: 42
Registered: 5-2005
Posted on Friday, January 13, 2006 - 10:31 pm:   Edit PostPrint Post

Roberto is 100% correct (as usual). Things here aren't as black and white as they appear. You have to understand the reasons why real estate took such a dive after the devaluation. Properties have always been priced in dollars. But what would happen in the USA if the banks closed for months, wouldn't let you take money out of the banks and oh yeah...your savings were worth 30% of what you had in the bank. Exactly, buying would stop and people would be selling to raise cash.

The price decreases was artificial and they have only recently passed the pre-devaluation levels.
As Roberto correctly pointed out - many, many, many affluent locals got a call the night or two before the crash warning them to withdraw all their money. I know dozens and dozens of people in this situation. Consider that there are hundreds of millions of dollars and more on the sidelines still from locals with their cash stashed overseas.

I am one of the biggest buyers of residential real estate in Buenos Aires. I still see much upside potential as I correctly called in 2002. Every investment has a time to buy and a time to sell. I'm not saying real estate will always be a buy. There will come a time when real estate will be time to sell and those that bought at the right time will be rewarded many times over.

I believe that to be the case here as well. There WILL be a time to sell and when that comes I'll start unloading. I still see many more years of upward appreciation. There simply are no other investments in Argentina that are safe besides real estate.

Also remember that EVENTUALLY traditional mortgages will be offered here. I'm not saying it will happen overnight but once it does it will be like anywhere else in the world.....it will push up demand which will push up prices. It's been the same the world over.

Consider almost all property purchases in Argentina are 100% cash over the table. These values are very real unlike the speculation that is going on in the USA with no money down, interest only mortgages, etc. The real estate market here is very real with investors paying 100% cash instead of the 0%- 5% down in the USA with people with shaky credit that can get loans, people are over leveraged, etc.

Good luck all. Have a great 2006.
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Billabongchick
Unregistered guest
Posted on Tuesday, January 24, 2006 - 2:43 pm:   Edit PostPrint Post

Hi- any idea of winter month temperatures near BA? Guide books say about 5 degrees Centigrade but I have seen pictures of snow! Or is snow a rarity?

Thanks!
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Roberto
Board Administrator
Username: Admin

Post Number: 291
Registered: 12-2004
Posted on Tuesday, January 24, 2006 - 5:13 pm:   Edit PostPrint Post

Check here weather in Argentina. Historic figure as well as current weather conditions.
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jch
Unregistered guest
Posted on Sunday, January 29, 2006 - 1:56 pm:   Edit PostPrint Post

If you need info. check www.alphaprojectpatagonia.com chapter FAQ
chao
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Albert Lee Mitchell
Unregistered guest
Posted on Sunday, February 12, 2006 - 12:43 am:   Edit PostPrint Post

Uhm, marcello/ApartmentBA, I think there is some self-serving information being transmitted here. Cordoba is the educational center of Argentina with students from all over Latin America plus a bustling industrial town.

Las Sierras de Cordoba has a 100 year history of the resort center of the country. Granted that Cordoba itself is "just another big city" but so is BA, Santa Fe, and Mendoza. The trick in real estate is always to find niche markets or property that can be improved.

I specialize in property in the Sierras. At 3,000 feet and the latitude of San Diego it has what may be the most perfect climate on earth.

Being a traditional vacation spot (check highway 38 from Villa Carlos Paz to Cruz de Eje) there is a focus on hospitality. After the 2001 crunch many rich vacation Chalets, Casonas, and Fincas have gone into disrepair. I'm buying them up, refurbishing and selling to the foreign market.

Yes, Buenos Aires is a good market. Mendoza is a good market for prospective wine growers but beware the water supply. There is a lot of upstream development and if that water is ever diverted, or reduced, Mendoza (and San Rafael) will turn back into a desert.

Other regions don't have the water problem of Mendoza but water in general is an important aspect to verify before putting your $$$ on the line. There has been a major conflict between the Federal Government and the country's largest water treatment company which is currently French owned. Beware.

But the land in Mendoza is cheap. I've seen 40 hectacres of old, renewable, vineyard in a good location for $100k, that's $1k/acre. Good producing land, fully developed, might cost $3k per acre. Be sure to ask about the "zonda" which is a dry, hot, wind that dessicates vines from time to time and be prepared to protect all your vines with fabric against hail. Hail is a common danger that beats the vines near death unless protected.

Back to the original inquiry about Cordoba. Feel free to contact me for info on the city, or Las Sierras de Cordoba, at alm314159@yahoo.com there is enough opportunity for all!

--Albert
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Apartmentsba.com
Junior Member
Username: Saint

Post Number: 45
Registered: 5-2005
Posted on Sunday, February 12, 2006 - 12:53 am:   Edit PostPrint Post

Hi Albert,

Interesting information on Cordoba. I might be taking a trip out there to look at some opportunities. can you tell us what the average cost is there per sq. meter? What about these vacation Chalets that you talk about? How much can one be picked up for? Then afterwards, what are they used for? Just private residences? The key things to look at of course would be totaly investment after the land/property/renovations/furniture and then the ongoing monthly operating costs/taxes and then look at your net return per year. I still say the net returns on rental income will be higher than BA than most places. That isn't a self serving comment...just the plain truth. Also, capital appreciation has been very big as well and I see that trend continuing....

I know foreigners are buying up a lot of Argentina. Do you see any main trends or groups of people particulary buying. For example, here in Buenos Aires some big buyers are the Americans, Brits and Australians are now in the game. Also, the Canadians are taking a strong look at investments here in Buenos Aires. I'm always curious who is buying there. If you could share that with us that would be great. Thanks in advance.
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Apartmentsba.com
Junior Member
Username: Saint

Post Number: 50
Registered: 5-2005
Posted on Wednesday, March 01, 2006 - 8:20 pm:   Edit PostPrint Post

Oh well, I guess Albert never stopped by to answer those comments that I asked about Cordoba. I don't post on here for some self-serving purpose. I've never picked up a client from this site. We have plenty of investors including banks so there is no need for new clients. I have enough projects to last me a lifetime. We are probably one of the only companies in Argentina that has no problems raising capital or lack of connections and routiney turn away new money wanting to partner on projects. We have plenty of both.

As I mentioned before. It's easy to play "monday morning quarterback" but what I've done on various websites from many years ago is posted publicly on real estate trends here in BA. Like I said before, the great things about public message boards is you can chart over time who was right and who was wrong.

I post to help people understand the opportunities here. Those that know me well and have known me for many years will tell you that I have always tried to help people with advice. I've always been like that. The thing is, how many peole wish they bought real estate in California before the boom and property went up many times over?? Oh well, to each his own. Looks like I'm not the only one noticing anymore about what a great place BA is to invest. BA was mentioned in last Sunday's New York Times. The story is below:


February 19, 2006

A World of Affordable Choices

By STEPHANIE ROSENBLOOM

NEW YORK — sung about by Frank Sinatra, chronicled by Carrie Bradshaw and trampled by King Kong — has long had mythic status. Even the real estate is legendary.

Rents have always seemed exorbitant compared with those in other big cities, and now buying in Manhattan costs a record-setting $1,002 a square foot, on average. Still, there are plenty of properties for less than $500,000, and some dynamic neighborhoods in Brooklyn and Queens have rentals for below $1,000 a month.

New York, though, is not the only city capable of captivating the unencumbered and adventurous. The world is dappled with electric and storied cities — and real estate is staggeringly affordable in many of them.

"There is so much value in a lot of foreign countries," said Nigel Leck, an international property expert on the BBC program "Uncharted Territory." "The capital growth will be very, very good."

Entrepreneurial types should seize the moment in Eastern Europe, where cities like Budapest, Prague and Krakow, Poland, are in need of basic services and programs to propel them into the future. Those who want the privileges of home — a democratic government, a transparent market, the protection of property rights — but want more bang for their buck, should consider Toronto, Montreal and Quebec.

Sun-seekers looking to live and invest in a more tropical climate may want to migrate to one of the many flourishing cities in Latin America. Young executives who want to position themselves for the next decade can get deals in Shanghai, while romantics can embrace a piece of Paris for less than they may have thought.

Jeff Hornberger, manager of international market development for the National Association of Realtors, said that many European and Latin American countries welcome foreign buyers.
But that does not mean the process is devoid of red tape. Information about ownership laws in 24 countries can be found on WorldProperties.com. Click on "Country Info," then "Business Practices." Select a country from the drop-down menu. Where it reads "Select Business Practice," choose "Foreign Ownership." That will note any restrictions. In Mexico, for example, Article 27 of the Mexican Constitution of 1917 prohibits foreigners from owning residential real estate within 30 miles of any coastline or 60 miles of either border.

"As a rule of thumb, countries that were former British colonies have few, if any, restrictions, whereas many other countries restrict and require you to get a special permit to buy," David M. Michonski, chief executive of Coldwell Banker Hunt Kennedy and an international real estate specialist, wrote in an e-mail message. "But in resort markets, the countries often make exceptions."

Renting is a more informal process. "It is always easier to rent in a foreign country than to buy and I know of no restrictions on renting anywhere," Mr. Michonski wrote.
By and large renting is an agreement solely between the property owner and the renter. "If you're going to Italy and you're renting from a mother whose kids have left the home, she probably just wants a down payment," Mr. Hornberger said.

Some property experts say the most challenging part of relocating is finding a job. Yet it can sometimes be easier than buying property. "Many countries welcome American know-how and since Americans rarely compete for the low-paying local jobs, restrictions are often far more lax than to purchase," Mr. Michonski wrote.
At WorkAbroad.Monster.com there are job listings for nearly 200 countries. The site has tips about working papers, corporate relocation and private-sector jobs like teaching English. It also makes mention of risk-takers who, without any business connections, travel abroad to study, work freelance or start their own business and end up making valuable local contacts and securing work for themselves.
Of course, to learn about a country's visa and residency requirements, you will have to contact its embassy or visit its Web site.
Latin American cities are among the most exciting and affordable, especially Buenos Aires, the sultry, party-until-the-wee-hours city known as the Paris of South America. In 2002, the Argentine peso was devalued by the government, resulting in a currency crash. But four years later the city is getting back on its tango-dancing feet.

"This is a city that is getting more expensive because the economy is on the recovery," Mr. Hornberger said, "but it's still at a fraction of the cost."

Dinner for two with a good bottle of wine and dessert is $15 a person in a nice restaurant, said María Reynolds, who is an owner of Reynolds Propiedades & Relocation
(argentinahomes.com) in Buenos Aires. "If we ever go out and pay more than $18 a person it's like 'wow, that's expensive,' " she said. (In Manhattan it costs $16.95 for a fajita at Señor Swanky's, a Mexican chain.)

The enclave of the moment is San Telmo, a "young, hip urban scene with a thriving arts community and a strong ex-pat community," as Mr. Hornberger put it. The neighborhood is dotted with fine restaurants, bars, boutiques and colonial houses. Property costs between $56 and $93 a square foot, Ms. Reynolds said. Renting is also affordable. There are furnished studios with weekly maid service for $450 a month at http://www.buenosaireshousing.com.ar/. (That is less than the $497 it costs to keep a car in the garage near New York's Museum of Modern Art.)
Real estate is more costly though still reasonable in Recoleta, an elegant downtown tourist magnet. Prices are about $180 to $300 a square foot, Ms. Reynolds said.

Lief Simon, the editor of Global Real Estate Investor, a newsletter published by International Living, likes Panama City with its high-rise buildings, restaurants and some 80 banks. "It's a first-world city," he said, and yet two-bedroom apartments can be had for $60,000 to $80,000.

Mexico City, recommended by some property experts, makes others cringe with its crowded streets and polluted air. Still, "there are a lot of young Americans living down there and they're finding employment," said Mr. Hornberger, who suggested living in Condesa, a chic area that has been likened to New York's East Village. There are two- and three-bedroom apartments in Condesa for about $1,200 to $1,500 a month. Some one-bedrooms in downtown Mexico City are less than $700 a month.
Those who are partial to cooler temperatures but wish to remain on this side of the Atlantic could head north to Canada. "It's a great opportunity for kids today," Mr. Michonski said.
Toronto is the financial headquarters of the country and three of its trendiest neighborhoods are among the most affordable.
"It's a mini-Manhattan, but we're decades and decades behind in terms of where you are with your price points," said Michael Kalles, president of Harvey Kalles Real Estate (harveykalles.com) in Toronto.

The Beaches neighborhood has a lively beachfront boardwalk, volleyball courts and an outdoor swimming pool, yet is close to the city's downtown. Buying at the low end of the market in the Beaches is about $260 to $300 a square foot, said Michael Manley, a director of the Toronto Real Estate Board.

Rent is $690 to $1,210 a month, said Ryan Schwerdtner, managing director of a Canadian rental Web site, Viewit.ca. Rents vary significantly, he said, because properties range from beachfront homes to basement apartments.
Two of the trendiest downtown areas are West Queen West (known for its galleries, dance clubs and shopping) and King West Village (its myriad pubs make it ideal for night owls). New condos in Queen are going for $220 to $330 a square foot and are being snapped up by young people, Mr. Kalles said. Loft and one-bedroom rents in both areas are about $870 to $1,130, Mr. Schwerdtner said.

In Montreal, the "place to be and to be seen" is Plateau Mont-Royal, said Bertin Jacques, a spokesman for Tourisme Montréal. Property in this area — which is popular with young Canadians because of its cafes, restaurants and nightclubs — is about $220 to $240 a square foot and rentals are about $650 to $1,470 a month, he said.

The Gay Village enclave, which can be likened to New York's Chelsea neighborhood, also draws a number of straight people because of its dynamic night life and affordability, Mr. Jacques said. Real estate is about $190 a square foot and rentals are about $780 to $1,210, he said.
If Buenos Aires is the Paris of South America, Quebec City is the Paris of North America. It is divided into Haute-Ville (the upper town) and Basse-Ville (lower town). Haute-Ville is more expensive than Basse-Ville, which, like New York's South Street Seaport, is distinguished by a port (Old Port) along the St. Lawrence River. Warehouses converted into 750- to 2,000-square-foot apartments are about $170,000 to $390,000, said Richard Séguin, a spokesman for Quebec City Tourism.

Speaking of Paris, the city of Renoir and haute couture is far less expensive than New York and San Francisco, a fact that has escaped many would-be expatriates.
"There's a lot that is still way underpriced because it needs renovation and gentrification," said Adrian Leeds, who moved from Los Angeles to Paris in 1994 and is the editor of http://www.parlerparis.com/, a newsletter about Paris, as well as other Web sites about France, including French Property Insider (http://www.frenchpropertyinsider.com/).
Those looking for a deal should skip the Sixth and Seventh Arrondissements, home to the Luxembourg Gardens, Eiffel Tower and Musée D'Orsay. Instead, they might consider buying in developing arrondissements where the city's bohemians and "bobos" (bourgeois bohemians) flock: the 10th, 18th and 19th.

Just be wary of the 10th Arrondissement (one of the city's up-and-coming areas), advised Yolanda Robins, a property manager for French Property Insider who moved from Philadelphia to Paris two years ago. The areas along the tree-lined Canal St.-Martin are beautiful, she said, but those near the train station "can be horrible." The average price per square foot in the arrondissement is about $530 to $670, she said.
The artsy 18th Arrondissement, known as Montmartre, is perched on a hilltop, and the Eiffel Tower can be glimpsed from some of its apartments. Property costs about $670 a square foot on the west side of the arrondissement and about $440 a square foot on the east side, which is undergoing gentrification, Ms. Robins said. Property in the 19th is about $440 to $610 a square foot, she said.

Long-term furnished rentals in those arrondissements are about $320 to $430 a month, according to Ms. Leeds. "It doesn't even come close to London," she said.
As Mr. Hornberger put it: "London is out of reach unless you've got a really good trust fund."

Yet some Anglophiles and English majors remain undeterred. Ryan Benson, director of Dream Properties London, suggested renting in St. John's Wood. But even there, a 270-square-foot studio on the famous Abbey Road is on the market for about $1,470 a month (at http://www.foxtons.co.uk/). Other areas to search are Maida Vale, West Hampstead and Little Venice, though the pickings are slim. Suburbs like Stanwall and Radlett are less expensive but what is saved in rent is paid for in gasoline or commuting time.

Those doing business in China (Mr. Michonski calls it "the land of the future") may want to work and buy in Shanghai. Adrienne Farrelly, general manager of Shanghai Properties (shanghaiprops.com) suggested looking in People's Square, nestled among two of the city's major commercial and retail streets. Nearby is Top of the City, an apartment complex where property is about $350 a square foot and rentals start at around $700 for a 689-square-foot one-bedroom, Ms. Farrelly wrote in an e-mail message. "It's probably the best value in town given that it's at People's Square," she wrote.
Property experts agree, however, that the best values are really in Eastern Europe. There are "huge swaths of land" available for "knockdown prices," said Mr. Leck of "Uncharted Territory."

"That's where the opportunities lie," Mr. Simon said, "and that's where the young person who's entrepreneurial could make some money." It costs about a $110 a square foot to buy in Bucharest, Romania, he said.

"I think the biggie there in Eastern Europe is Bulgaria," said Mr. Michonski, adding that it has magnificent beaches as well as mountains for skiing and that "you can live like a king on $10,000 a year."

But, alas, if the siren song of New York is too mighty to ignore, you can find rentals for about $1,000 a month. Manhattan Apartments (http://www.manhattanapartments.com/) and Mark David & Company (http://www.markdavidny.com/) have some in Harlem and Washington Heights. In Brooklyn, there are a few studios in Park Slope and Kensington for less than $1,000 and in Williamsburg and Greenpoint for about $1,200 on the Craigslist Web site. In Queens, some studios and one-bedrooms in Astoria are less than $1,000.

Those who are cash-strapped but still want to live in Manhattan can rent a room (or a corner of a room) for about $500 to $800 a month. They may lack space and privacy. But they provide a sliver of the Big Apple. And more than one dream in this city began with less than that.

http://www.nytimes.com/2006/02/19/realestate/19cov .html?pagewanted=1&_r=2

Another was an article in International Homes Magazine which is a respected real estate magazine from the UK. You will notice I helped provide information on real estate trends in BA in it.

International Homes Magazine - Vol. 13 No. 1 February 2006

Land and Freedom

By: Michael Gunn



Is Spain looking just too crowded and familiar? Latin America has the ideal alternative for those who’ve honed their Spanish but hunger for more dramatic surroundings, greater adventure and much cheaper property. Take a bow Argentina – the continent’s second largest territory with plenty of land to spare.

“Argentina isn’t some small Caribbean island or tiny Central American tax haven,” says David Cummings of Tierra Estates. “It’s a proper country with vast opportunities for exploring. There are tropics at one end, glaciers at the other, sea on one side, soaring mountains the other.” Even the most cursory glance at a map bears him out – from the subtropical borders with Bolivia and Paraguay, down the western spine of the Andes range, all the way to the Patagonian steppes, this 5,000-km stretch of land promises a lifetime of exploration.

Also, unlike some of it’s South American neighbors, Argentina is a safe and friendly destination that can deliver a first world lifestyle, but at third world prices. Such a climate is a direct result of the country’s 2001 economic plunge – when Argentina defaulted on massive international debt and saw the peso lose 75 per cent of its value in a single day. Five years on and things have definitely improved. The economy is back on track, foreign investment has returned and unemployment has leveled at 12 per cent – the World Bank predicts the country will remain economically stable for the next 20 years. Tourism is set to play a major role too with a target of 10 million annual visitors by 2010. Added to that, low cost airlines have resumed flights to Buenos Aires and firms such as Air Milan and Continental are restarting direct routes. For now, however, living costs are still very low. “Investors can buy wonderful properties with land for very little and without the burden of a mortgage,” says Dan Hathway of Andino Property. The state of affairs has brought burgeoning numbers of overseas visitors keen to join Argentina’s first wave of property pioneers.


Air and graces.

First stop is Buenos Aires, the so-called ‘Paris of Latin America’, where old world elegance still flourishes at the heart of one of the continent’s largest cosmopolitan centres. With a population of 2.7 million divided between 47 districts (or barrios) modern BA is a fantastically varied beast. The architecture showcases the country’s resplendent past in the Metropolitan Cathedral and Teatro Colon, the world’s largest opera house, while the enterprising future finds it place in the redevelopments of Palermo and Puerto Madero.

Currently the biggest attraction is that property is extremely cheap for those armed with foreign currency. Values are pegged to the US dollar and the real estate sector accounted for 60 per cent of all investment in Argentina last year. By some estimates, half of luxury apartment purchases in Buenos Aires were by foreigners – unsurprising when you consider what a relatively small sum can buy. One-bed apartments can cost less than $50,000 (£ 28,250), a stylish two-bed place from $80,000 (£45,205).

That’s set to change in the near future. “Real estate has risen dramatically since the 2001-2002 devaluation,” says Michael Koh of ApartmentsBA.com, a company specializing in redevelopments and high-end rentals. “Argentina’s economy has rebounded from the financial crises with three straight years of nine per cent growth – one of the highest rates in the world.” In some areas of the city, property prices have risen by 30 per cent in the last year and construction figures have soared too. “The people buying aren’t speculators,” he explains. “Mortgages are almost non-existent here so buyers are true investors. Purchases are 100 per cent cash for the most part, literally paid with dollars over the table.”

Recoleta in Barrio Norte is the very top rung of the property ladder. “It’s the Mayfair of Buenos Aires – stylish, chic and very safe,” says Mr. Cummings. “An address here is considered the right one to have. It’s true to say it has a certain snob appeal.” Central to practically everywhere in BA, it boasts grand European architecture, wide boulevards and the city’s finest restaurants and designer shops. Prices range between $1,500 and $2,500 (£850 - £1,420) per sq. metre depending on the age of the building.

Also of interest is Palermo – BA’s Notting Hill or Chelsea and the haunt of Argentina’s fashionistas. Here you’ll find the parks, lakes and the racecourses that draw the city’s rich clientele and not a few moneyed ex-pats – Price Harry has been spotted here. “It’s got a great location and it’s very trendy these days,” says Mr. Cummings. “Although you’ve got to know where to buy, if you fancy property developing in BA then both Palermo Viejo and Palermo Hollywood are sure-fire hits.” Prices range from $1,000 to $1,600 (£570 - £900) per square metre.

Perhaps the freshest opportunities are to be found in Puerto Madero, the city’s former docklands. Like its London namesake, this industrial area lay derelict for decades when it proved too small to keep up with the country’s busy shipping trade. Following its resurrection in the 1990s, redevelopment continues apace with cranes crowding the skyline. Prices are already at a premium at around $2,200 - $3,000 (£1,240 - £1,700) per sq. metre and only a few sites are left for development.
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marcello
Unregistered guest
Posted on Monday, March 06, 2006 - 10:30 am:   Edit PostPrint Post

Hello everybody!

Well, I've been to Argentina last November. I spent 20 days in Cordoba, of which about 15 entirely dedicated to spot investment properties. I've seen no less than 10 per day on average, most of which were of a much better quality (construction wise) than the ones we have here in Tenerife (Spain).
The good news: it is a thriving city with good (although not excellent) services, and plenty of real estate opportunities. A couple of developing areas have an interesting appeal, being the sq meter rates from 600 to 800 U$ and more, depending on location. As Albert pointed out, it is a huge educational hub for the whole country, so vacancies are extremely low in the area near the University, which happen also to be one of the posh areas of the city. Annual capitalization there: in the last 3 years, between 15 and 20%. Really.
The bad news: as Saint noted before, if you don't have a local contact, better avoid investing there. The scam is just waiting around the corner! Embargoed land below the building, ownership not legally defined, trials related to fatalities during construction, you name it. Almost every time I was about to close on a good looking property (investment-wise) I found out something not quite clear about it. And if it wasn't that, it would just be the estate agent: I had rarely witnessed such a display of UN-professionalism, in any trade, in any country! They would avoid presenting offers to the owner, hide documents, increase their fees based on location, attach inexistent taxes to the global costs, or just pulled out from the transaction when I surprisingly showed up with my lawyer to make a deposit and/or offer on a property. My impression is that the same situation is common to the whole country. Of course there is always an exception: 1 in a million, perhaps.

So in the end I was not able to get away with a property in my pocket. Not this time. But now I have a better understanding of that market, I had observed where the opportunities lay, and where the dangers are, and I can count on the protection of a couple of friends that don't really need to cheat me. So I'm getting back next spring!
I also had a look at Buenos Aires: Caballito, Palermo and Recoleta get my fancy, but I don't think I'll ever be able to trust a "porteno"!. Finally, I was shortly considering other "niches": Parana looks nice, but is ridiculously expensive because an ongoing rough speculation and shortage of space near the centre. San Juan, north of Mendoza, is another winery region: land much cheaper and touristic potential make this place worth considering, although capitalization might never be excellent as in other regions.
All in all, a country still full of opportunities.
Good luck to all!
Cheers

(Message edited by admin on March 06, 2006)
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Apartmentsba.com
Member
Username: Saint

Post Number: 52
Registered: 5-2005
Posted on Monday, March 06, 2006 - 11:05 am:   Edit PostPrint Post

Hi Marcello,

You make excellent points. For some reason some locals get offended when we talk about the HORRIBLE system here in the real estate industry. People think I'm exaggerating or they simply have never dealt with purchases in a First World country. It is NO exaggeration that the real estate industry is severely unregulated here plagued with many problems.

I'm NOT saying there aren't honest realtors and professionals in the industry. There are... just like in other countries. I'm just saying that as a whole- the system is unregulated and I find most realtors either dishonest or incompetent. Again, not saying there are not good realtors. There are.

You just scratched the surface of problems that people can run into. Consider that even locals that have lived here ALL their lives are paying for assistance to buy in their own country. Want to know the #1 reason they tell me? They simply don't trust realtors here. Am I saying you can't do it on your own? No, you can. I'm just stating facts.

I can give many real life examples from people that hired me after things went astray or they got cheated. I have several people that hired a lawyer and they were going to put 30% down and the escribano never did a title check (which is the most basic of things) to the time when I helped a lady get back u$s 9,000 from a false tax her lawyer charged her.

Then I can tell you of a realtor that is fairly good (but again, realtors have no incentive on fighting for a fair purchase price as they get 3% from the BUYER). A client was going to go out and had me see the property. I knew another apartment in the same building sold just 2 weeks earlier for $1,200 per sq. meter and it was on a higher floor and more desirable. They were telling their own client that the asking price of $1,500 per sq. meter was fair for the lower one even though they knew the other one sold for only $1,200 per sq. meter just a few weeks earlier! On a 100 sq. meter apartment that equates to overpaying u$s 30,000!!! Is that "cheating" the client. Well, maybe that technically isn't considered cheating but a realtor should have an obligation to fight for the lowest price for their client. In the USA we have comparables to base past sales in the area. You do NOT have that here to keep realtors honest.

Marcello, I believe you are right. I don't think it's isolated to just Buenos Aires. I think you will see more and more foreigners from the UK and the USA that move to Argentina and take advantages of their ethical business practices and quickly become market leaders. Already in places like Mendoza and San Rafael there are foreigners that moved there and starting businesses. I'm talking to some moving to Patagonia and the South. I see this happening more and more.

Consider I talk to many Europeans that also have tough business practices in countries like Spain and Italy and they say Argentina is much more difficult and easier to get cheated than their countries. I love Argentina but I'll tell it like it is when it comes to buying here.

In fact, one my first property purchase I dealt with an ethical realtor. However, they didn't do much research and I got stuck buying a garage I didn't need or didn't want the day before the 30% down payment. Up until the down payment they were saying it was fine for the seller to keep the garage which wasn't true. The only reason either of us knew was my lawyer checked it.

There are opportunities all over Argentina. Many cities the land/property is dirt cheap compared to Buenos Aires. Many great opportunities. Good luck Marcello.
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Kathy Allison
Unregistered guest
Posted on Friday, March 31, 2006 - 12:52 pm:   Edit PostPrint Post

Hi All,

Our family is considering buying a farm in Argentina.

We need property that will be suitable for cattle, goats, and crops. We would really like to be in an area where there is a decent amount of rainfall, greater than 30 inches per year, and an ample surface water supply.

Are there any particular areas that would work better for us?

Thanks,
Kathy
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Roberto
Board Administrator
Username: Admin

Post Number: 379
Registered: 12-2004
Posted on Friday, March 31, 2006 - 1:09 pm:   Edit PostPrint Post

Hi Kathy, I have moved your post here so that there is a better focus...
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Apartmentsba.com
Member
Username: Saint

Post Number: 58
Registered: 5-2005
Posted on Wednesday, May 10, 2006 - 2:35 am:   Edit PostPrint Post

Here is another great article on the real estate market in Buenos Aires by Property Investor News Magazine from the UK.



By: Mark Hempshell



April 2006



Argentina was sparsely populated until Europeans arrived in 1502 and the country was colonised by Spain - from whom independence was declared in 1816. Over the next 160 years centralist and federalist, conservative and radical, and civil and military administrations traded power. In 1983 after decades of political turmoil, plagued by terrorism and oppression under which countless numbers of opponents 'disappeared', the last military dictatorship was ousted and democracy was restored. In the 1980's and 1990's the Government introduced measures to take civilian control of the armed forces and permanently establish the country as a democracy.

Despite, at times, having suffered from political and economic turmoil República Argentina is still the most developed country in South America, and to all intents and purposes a 'first world' nation, not a 'third world' one. It has the highest GDP per capita, the highest levels of university education and an infrastructure comparable with industrialized nations.

The Economy

Foreign investment and immigration from Europe shaped Argentina into an advanced economy during the 19th century. From 1880-1930 the country was one of the ten wealthiest nations in the world. But years of political problems contributed to economic decline, leading to massive public debts and severe hyperinflation by the late 1970's. In 1991, under President Carlos Menem, the Government embarked on a programme of trade liberalisation, deregulation and privatisation with the aim of rejuvenating the economy. Most significant of these, as we will see later, was the 'Convertibility Law', which pegged the value of the currency, the peso, to the US dollar on a one-for-one basis.


Initially the economy improved but falling exports, growing imports, unemployment and the impact of the Asian economic crisis eventually took their toll. By 2001 GDP had plummeted, inflation exceeded 1,000% and unemployment reached 25%. The peso-dollar tie was ended in 2002 and the currency lost 70% of its value. Argentina defaulted on its international debts, public employees went unpaid and bank accounts (an extremely unpopular measure known as corralito) were frozen, leading to street rioting.

In 2003 strict fiscal measures including revaluing the currency, import substitution policies and increasing exports contributed to a sudden surge in GDP. Internal consumption increased, foreign investment returned and the so-called 'Tango Revival' began. The economy grew 8.8% in 2003, 9% in 2004, and 9.1% in 2005 by which time unemployment had fallen to 10%. The Government completed restructuring of the national debt in February 2005, which now stands at 69% of GDP and is slowly decreasing. According to INDEC, the National Institute of Statistics and Census, GDP expansion for 2006 could be 7%.


State Of The Property Market

As in other developed nations property here was always considered a rock-solid investment. But the economic collapse of 2001-2002 shook that belief to its foundations. During this time people lost the majority of their savings and their pensions. The breaking of the peso-dollar tie caused the currency to lose 70% of its value against the dollar by December 2002 - making previously-attractive dollar mortgages cripplingly expensive. People were desperate to sell their property to salvage something and, burdened by many sellers and few buyers, the property market collapsed. The rental market was also severely affected : According to 'Reporte Inmobiliario', which reports on trends in the market, average residential rents dropped by 74% from US$29 to US$7 per m² during 2001 alone.

But with the economic revival the market began to move again. By the end of 2003 residential property had, on average, recovered to 67% of its pre-crash value. By January 2006 prices in many areas have recovered to their pre-crash levels, and in some have increased by as much as 34% in a year. Property transactions, together with new build completions, reached a new record in November 2005. Some outside observers wonder how, given recent events, confidence has returned to the market so quickly. One key reason is that, after the corralito, many Argentineans do not trust the banks and still regard land and property as a more secure investment.

Another factor which bodes well for the property market is that buying property here is straightforward. Foreign investors may buy without permission. Once you have found property the title is checked, the escritoire is signed and the purchase is registered. There is no capital gains tax.

Buenos Aires

Argentina is divided into 23 provinces and one autonomous city - Buenos Aires, widely known as capital federal. The city itself has a population of 2.7 million and the city plus the greater metropolitan area 11.5 million, making it one of the largest conurbations in the world.

Buenos Aires has a modern high-rise centre with thriving commercial districts, yet is notable for its quality of life with extensive green spaces, good public amenities and transport and - as the name suggests - a pleasant climate. It is gradually becoming recognized as something of an undiscovered gem compared to most overcrowded international cities. In a recent article 'The Washington Post' proclaimed 'Forget about Europe, go instead to beautiful Buenos Aires - the city with everything but without the high costs of European cities.' Living costs are indeed low for any city, although rising : A good meal for two with wine costs US$20, a cinema visit US$4 and domestic staff can be hired for US$2 an hour. Not unsurprisingly, therefore, it is proving a major draw to expatriates, migrant workers, entrepreneurs, retirees and students from Argentina, the rest of South America and, increasingly, the USA.

Property prices here have been rising briskly since 2003, but are still extremely low by capital city standards. It is still possible to buy a studio apartment in a good central area for US$50,000, although these are becoming rarer. Across the city generally new build property tends to be more expensive than old, and floor area tends to be more generous than in most European cities.

Recoleta, north of the centre, is regarded as the most desirable and fashionable residential district and is also popular with tourists. It is very much the 'Fifth Avenue' or 'Mayfair' of the capital, home to deluxe hotels, fine restaurants and designer shops. Current apartment prices range between US$1,500-US$3,000 per m², with one bedroom apartments typically selling for US$90,000 and two bedroom apartments starting at US$135,000. Prices were already high by Argentinean standards so showed a relatively modest 15% price rise in 2005.

Palermo is another good quality residential area, with a reputation as a 'trendy' district. Current prices in Palermo range between US$1,300-US$2,800 per m². Puerto Madero is a newly developed area, similar to the London Docklands. Prices are already at a premium here, at around US$2,200-$3,000 per m² and only a few sites are left for new development.

Of course, as elsewhere, the greatest price appreciation is often found in the up-and-coming districts. San Telmo to the northwest of the centre is a bohemian area of pavement cafes, bistros and antique shops, still showing signs of its working class roots. A regeneration programme to improve security and enhance the street scene is currently underway. Also up-and-coming is La Boca on the southern edge of Buenos Aires at the mouth of the River Riachuelo. These districts are home to the city's famous Tango clubs. Prices are currently in the region of US$800 to US$1,200 per m² and these areas are tipped by many commentators for growth.

Michael Koh, President of ApartmentsBA.com, has made extensive real estate investments on behalf of his own company and as a consultant to investors, and firmly believes in Recoleta despite its relatively high prices. He says 'Recoleta will always be Recoleta. The best investment is buying in a good area like Recoleta but not on a posh street like Avenida Alvear where prices have already gone over US$3,000 per m². You can go just a few blocks away in a very nice part of Recoleta and pay US$1,500 per m².' He points out 'Many investors are buying for short-term rentals (serviced apartments). So it doesn't make sense to pay US$3,000 per m² when you can pay half of that in a good part of Recoleta. The average tourist that comes down and books an apartment won't know the difference of 5 or 6 blocks.'

Michael is also very confident about the Palermo Soho/Viejo/Hollywood areas which he believes will be transformed, particularly as tourism increases. He tells us 'I predict these areas will explode with growth within the next 3-5 years' and he has started to purchase up plots of land in this area in anticipation of building luxury houses and boutique hotels.


Tourism, Agriculture And Land Investments

An important issue to factor in is the part tourism could play in the property market. Tourists dwindled to almost nothing when the peso-dollar tie made it prohibitively expensive to visit. But today's bargain living costs saw visitors rocket to 3 million last year. Tourism Secretary Carlos Enrique Meyer recently predicted 4.1 million tourists and US$3.5 billion of tourist income for 2006, with 10 million visitors projected by 2010. A number of airlines are restarting or launching new routes.

Major draws for tourists are Buenos Aires, the Iguazú Falls and Patagonia. There are several good quality ski resorts in the Andes (the season is June-September) such as Bariloche, Las Leñas and Villa Angostura. Hotels in these areas are frequently fully booked, fuelling the demand for short-term house and apartment rentals. Investors are also active in buying land with future residential development potential in tourist areas.

Argentina has always been a major and well developed agricultural country. As well as being self-sufficient in food it is the world's fifth largest agricultural exporter, and agriculture accounts for 60% of all exports. Agricultural land is very cheap by international standards and there has already been notable foreign investment in agricultural land. International investors such as George Soros, Kerry Packer, the Sultan of Brunei and Ted Turner are already believed to have bought up large tracts of land, particularly in Patagonia. Analysts agree that, should the USA and EU eventually agree to remove or reduce subsidies for their own agricultural sectors countries like Argentina could benefit considerably.


Future Prospects

So what are the prospects for prices in 2006 and of course rental yields? Michael Koh reports 'Prices have drastically risen all over the city in good areas like Recoleta, Barrio Norte, Palermo, Palermo Soho/Viejo/Hollywood, Puerto Madero. Areas outside of those areas were not as drastic. Property prices went up by as much as 25%-30% last year in some areas of the city. However, much depends on the kind of apartment, building and location.'

On rental yields he says 'The rental market has exploded. There are a lot of apartment rentals on the market for tourists. Hundreds if not over a thousand. The typical average rental probably yields about 6-8% per year on the total investment.' However, he advises that high quality, well equipped properties can yield much more. I offer luxurious furniture, high-tech electronics, local cellphones, USA phone lines, high-speed Internet and many other features. Most locals aren't willing to make this investment. However, it enables us to make a much higher rate of return. Many of my clients have yielded as high as 11% - 16% a year on the rental income alone.'

Michael is extremely confident about prospects for the market, stating 'I've always said that real estate here in Argentina is one of those once in a lifetime opportunities. I still maintain that property rates can easily double in good areas from today's prices.'
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sylvia cheal
New member
Username: Sylvia

Post Number: 2
Registered: 5-2006
Posted on Monday, May 22, 2006 - 2:39 pm:   Edit PostPrint Post

Thanks for this info. I am compiling a file as we are looking to move from DR to Argentina. We previously lived in the UK.

We look forward to visiting BA in around 5/6 months time. Would be great if we made some friends from this forum that we will be able to meet while we are there.

Sylvia
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julie benson
New member
Username: Julie

Post Number: 1
Registered: 5-2006
Posted on Monday, May 22, 2006 - 11:26 pm:   Edit PostPrint Post

Hello,

We are attempting to buy a lot in Bariloche from a friend of ours, who is Argentinian.He has an Escribano who has provided him with information on the process we will need to undertake. Here is what we have learned so far: In order to have title under our name, we will need to fill out a form with personal info--passport #, our intentions for the lot, etc. After filling out this form, it can take a year to get title under our name. In the meantime, the easiest way, we're told, is for us to sign a document which states the land was bought by an Argentinian but with our money, which guarantees that they cannot sell or do anything with it without our consent. We can begin construction and once the form is accepted (a year or so) we get the title transferred to us. Apparantly this is how many foreigners do it??? (we are Americans)

On the other hand, we heard from an American who recently bought a lot in a resort community in Bariloche that it is best to form a trust to purchase the land, that this is really the more "legal" way to do it.

We also heard from another man who attempted to buy land in Argentina and ended up buying in Chile due to complications, who advised us against having someone else hold title for us, that the government considers this "fraudulent" and we could lose our money. He said we need to apply for citizenship and cannot legally hold title until we are entering into our 3rd year of Permanent residency and need to have temporary residency for 2-5 years first. We are planning to retire there, but not for atleast another 5 years. We want to take the right steps to protect not only on our investment, but the interests of our friends and our friendship, as well.

It all sounds very complicated! And apparantly there are other "special rules" that apply to areas near the "frontera". We are very motivated to pursue this purchase so any advice/experience /links anyone has would be greatly appreciated.
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Roberto
Board Administrator
Username: Admin

Post Number: 462
Registered: 12-2004
Posted on Tuesday, May 23, 2006 - 1:23 am:   Edit PostPrint Post

>It all sounds very complicated!

Julie, and it is.

Make sure you understand our idiosyncrasy before engaging in such long term plans here. This happens daily at all levels. I am in Buenos Aires trying to set up shop here and I am going crazy! It is my second trip in 1 month... and I am Argentine.

I can't provide you with any specific advise but wanted to chime in just a general comment. As for scams, yes, you should maneuver this carefully. Hopefully, someone with more real estate experience will drop a few lines.
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Roberto
Board Administrator
Username: Admin

Post Number: 463
Registered: 12-2004
Posted on Tuesday, May 23, 2006 - 1:24 am:   Edit PostPrint Post

Sylvia, why don't you try private messaging some of the members here? I know a few that are expats...
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Apartmentsba.com
Member
Username: Saint

Post Number: 59
Registered: 5-2005
Posted on Tuesday, May 23, 2006 - 9:42 am:   Edit PostPrint Post

Julie,


Be VERY careful when investing in a foreign country. Don't lose common sense or act in a way that you would not in your home country. Would you buy a house in the USA and sign a document saying it was purchased with the money of someone else even though YOU purchased it???? Or purchased with your money but you put the title deed in someone else's name??? Of course not, so don't do it in South America!

If you are serious about making a life changing decision consulting an expert and a lawyer BEFORE doing something so drastic. Buying in Patagonia is NOT the same as buying in Buenos Aires. You need to know and understand the laws and your rights. There is so much misinformation out there regarding the process. Consult a good lawyer!

The gentleman I believe you are talking about that ended up buying in Chile is Douglas Harris. He wrote the article below which may give you a glimpse of what the process can be like. Best of luck to you.

Mike

Doug's Article Below.




A Funny Thing Happened On Our Way To Buying In San Carlos De Bariloche We Bought Rio Salvaje Lodge In Hornopiren, Chile ~ by Douglas Harris


December 2005

I traveled for many years looking for the ideal location to live. Patagonia, with the incredible vistas of mountains and lakes, is paradise for me. San Carlos de Bariloche, the capital of the ‘Lake District’ in Argentine Patagonia, was the place I had decided to use as headquarters for my specific search for a home. I had found the area, now I had to find the exact spot. On many trips to “Punta Panaramico” (on Circuito Chico, 20+ Kms from Bariloche) I had scanned the ‘Picture-Postcard’ vista of LLao LLao Hotel and the Lakes and knew that my home was somewhere within my view. I was sure this part of the world would be the end of a very, very long search. Somewhere in these mountains, with a view of the Lake Nahuel Huapi or the perfect mountains, Cerro Lopez or Cerro Capilla, I would find our perfect place…

Then one day the phone rang…

A reader called and said he had been refused Title to an apartment he had bought several months before. There is normally a few months of “processing” time when purchase contracts are sent to Buenos Aires, but this was different; this was a refusal. Title would not be granted to the purchaser. A Title holding “Trust” must be found or created.

The agency that issues the property titles (Deeds) for the Federal Government of Argentina, changed personnel in January of 2005 and began to enforce an obscure law (mentioned to us by no one) passed in December of 2004, regarding the “Security Zone”. One of the “Security Zone(s)” is basically anywhere worth buying in Argentine Patagonia, including San Carlos de Bariloche. The actual enforcement - which began in February of 2005 - makes it a requirement that all foreigners ask permission to own real ‘property’(inmuebles) during the purchase process. This ‘application’ for permission to own property in one’s own name would be done by the public Notary (Escribano) as part of the investigation/verification process.


However, it seems that either none of the ‘Escribanos’ filed the applications properly (the law had never been enforced before) or permission to hold Title was refused anyway. The first refusals by Buenos Aires, I heard about, were returned in September. I called our Lawyer, who was supposed to be an expert in real estate. Evidently, not wanting to be the bearer of BAD Tidings he never called back. I called an acquaintance working for a real estate agency, and was referred to an Escribano in BsAs and learned the facts:
Foreigners would be issued Titles to Real Property (any standing structure) WHEN they had 2 years of PERMANENT Residency. This is a problem because most ‘foreigners get temporary residency(Residencia Precaria) on a year-to-year basis for 2 or 3 years before Permanent Residency is granted.

Our PLAN was to enter the Residency Game as “Investors” buying a small ‘tourist’ business location for at least 100,000 pesos ($35,000+-usd) and getting a year-to-year residence visa for 3 years then applying for Permanent Resident status. For us, this new “wrinkle” on the enforcement of the laws meant that we would have to establish a “Trust” that would hold the Title to our property for at least 5 years. Or, we could put the property in the name of a citizen (a friend - hopefully). Friends that I would trust with my back any time said they would allow me to use their name to buy a home. Considering how complicated that would make their credit/lives (they couldn’t buy anything on payments without compromising the title to “my” property) this was quite an offer, but it is hard for people to solve problems the government creates. I wasn’t going to confuse my friends' lives and our own for 5 years. Besides, I wanted to know why this ‘Law’ had been passed. Was another shoe going to drop after I had invested in something?

We had a quandary.

The friends and heart-pumping scenery, ambiance, and cost of living we enjoyed and wanted to continue to enjoy, was in Argentina. The ability to buy a home, and work (above the table), was not. We felt betrayed by the real estate people that could have warned us and the hundreds of other ‘foreigners’ who had already invested after February and will be told they too must put their home into a “trust” when their refusal arrives.

Renting for 5 years, with our scanty income was not an option for us. We had planned to make some income on the investment in a tourist business. Real estate people kept telling us not to worry, a “modification” of the Law will happen, to relieve the problems the changes in the Law had caused. The Agencies’ own Escribanos were/are telling a different tale, even if there is a “modification” our applications will be processed under the law as it was at the time of application. No help there. We would have to rent until there was a modification or until our status changed.

We decided to try another tack and went to the office of a powerful Law firm. To us it was worth the effort and dollars to find a way “a solution”, that did not place our home and fortune in a “Trust” situation.

“There is always a way” should be the motto above the door of every Lawyers office. There was a way - a little complicated - a little expensive - but very ‘do-able’.

Living in Mexico for many years, I had heard all this before. I had also paid for services that vanished with the shuffling of public officials, or even their inexcusable absence at a critical moment.
(An old expat saying goes: The problem isn’t in buying(services) but keeping ‘em bought).

As we were going through the stages of lawyer opinions and visits, I got an email outlining a proposed law, circulating in BsAs: All sales to foreigners of land and real property in Patagonia would be ‘curtailed’. A trend was definitely developing. I just missed being in the position of having invested and unable to get title, had to form a trust, or pay for a company to represent my interests. If the new proposed law passed I could be in the position of having to sell at whatever price I could get, or worse.

This situation began with a phone call. The first of the refusals had been sent out and blind-sided us. I had promises from the Argentine Immigration people and my Lawyer that nothing like this title problem would ever happen. As we tried to react, I got a second phone call. Months before I had thrown out the ‘word’ - I wanted to buy a small hotel or ‘complejo de cabanas’ (rental cabins) or Lodge in a “destination” location. I wanted scenery, privacy, and waterfront would be nice. We had spent 6 months and thousands of U$D trying to find ‘our’ place.

The phone call described a place called Hornopiren, Chile on the ‘Golfo de Ancud’ about 115 Km below Puerto Montt. Two locations were for sale; one was a run-down campground with a Restaurant and four cabins, the other was a Lodge. The two places were within a km of each other on the road to the Parque Nacional/Volcano Hornopiren.

I looked on the web and found there was a volcano named Hornopiren, that was dormant - which seemed like an important fact for the long term. There wasn’t anymore info. available except for photos of the Campground on the web.

We decided to think over our situation - in Chile.

At first, Chile seems much like Argentina as you cross the Andes. Stunning Lakes surrounded by snow capped peaks. We crossed from Villa La’Angostura to the hot springs community of Pueyhue. After a quiet dip in the thermal waters, we headed down toward Osorno. Intermittent cloud cover blocked the view to the south. When the clouds cleared away, the beautiful Osorno Volcano was revealed. The volcano looks like a movie set painted background. You don’t get volcanoes of such classic beauty around Bariloche. Tronador, the hard to see peak that is astride the Chile/Argentine border can look like a very large snow-capped mountain. Osorno reveals itself as one of the most beautiful volcanoes in the world. As you come down into the enormous valley the differences between the two countries becomes obvious. The flatter areas of Argentina are very, dry and brown looking. The Chilean central valley looks a lot like the central valley of California in the spring - very green, and rich. The towns in Chile look weather-beaten and in desperate need of a Bob Villa renovation. The beautiful Swiss/German style of building is behind you, in Argentina. Highways are in better shape and more of the roads are paved in Chile, but the towns were very uninviting.

Driving through the town of Osorno was a revelation. People stopped for “Stop” signs as well as the red lights. After driving in Bariloche, and trying to remember the signs and lights you were supposed to stop at and ignoring the rest, this system was more comfortable for me as a California trained driver. Traffic was heavy and the usual ‘one-way’ street confusion led to some stress, but, generally driving in Chile was proving to be a day in the park after my experiences of crossing Mitre street in Bariloche, or being passed in heavy traffic on a two-way city street. (“You can open your eyes now Dear” - the wife says - “he made it”).

You start (quickly)(God Bless our calculator) to realize the prices of everything stated in thousands, and millions of pesos comes out to lots of dollars! I had heard Chile is expensive but after living in Argentina, I simply, had no idea. Gasoline prices are frozen in Argentina, so the world-wide price spike hadn’t affected us as yet. We had filled up in Argentina for about $2.60usd per gallon. In Chile we paid $4.60-$7.09usd per gallon.

The most modest, sandwich-and-fries meal would cost the same as a steak dinner in Bariloche. The Chilean prices were a little higher than we had left behind in the USA. There were almost no cars on the freeway - like Highway 5, the Pan American Highway runs north to south through Chile.

(This first crossing was during the aftermath of Katrina and fuel prices spiked rapidly. In the last two weeks gasoline has come down to $1.10usd per liter.)
We were passing through a green countryside of small farms except for the stunning volcano - Osorno - and the Andes way back in the hazy distance, we could have been in several locations in the USA.

We travelled south a hundred Km to Puerto Montt on the Golfo de Ancud, a bustling city of about 160,000 people. Parts of the city are brand new, or under construction and some of the neighborhoods are very nice. Enough of the old Puerto Montt remains un-renovated to give the place a real split personality.

The people were not as immediately friendly as Argentines, with a little prodding they seemed to warm up, but they speak so quietly that our new Spanish skills were of little use. I was surprised that there could be so much difference in the populations of the two countries - and the high level of animosity between them.

We stopped at the “Plaza de Armas, in front of the “Gobernacion” building.

I wanted to know from an official source, if we could buy property, receive Title and actually live in Chile without meeting a public official in an alley, with a sack full of cash.

The lady, Secretaria de Extranjeros office, in Puerto Montt was pleasant and explained that we could buy property with our Passports and would be granted temporary residency after our purchase and submission of a written ‘plan’ explaining how we would provide for ourselves. After one year of temporary residency - if we were doing OK - we would be given the option to become permanent residents, having to ‘check in’ about 10 or 15 years. (This scenario sounds way too simple to our lawyer, and as always in el “tercer mundo” (third world) remains to be seen.) In fact the purchase process was quite a bit more complicated. The Secretaria either hadn’t mentioned (or I failed to hear) that a “route number” had to be gotten to do anything ‘commercial’ in Chile. Getting the number is no big deal, but IS another day spent standing in lines. But the process was very transparent.

With these promises in hand we headed south on Highway 7. The Highway is part of a huge project to connect all of Chile with paved roads. The first leg of the journey, Puerto Montt to La Arena is scheduled to be finished by Dec 17, 2005. This was a happy surprise because of the obvious economic impact pavement would have on real estate values. Meanwhile, the road was a morass of mud, desviaciones(detours), and scary fishtailing moments caused by the tremendous rain coming down. We slid into La Arena 10 minutes early for the ferry and poured a little coffee (instant) on our adrenaline. The ferry runs every half hour until about 8:30 (and you better make it early for the last ferry). The ferry ride out on the vast waters of the Golfo de Ancud is memorable. The mountains rise out of the waters and a series of ranges run to the horizon. The 35 minutes goes quickly. The ride ends in Puelche, and begins the hardest part of the journey. 54Km of potholes, ruts and worse abuse your spine and kidneys all the way to Hornopiren. The good news is the Hwy project moves to this stretch of roadway and pavement is scheduled to come to Hornopiren in June of 2006. (As with ‘public works’ anywhere in Latin America this “prognostico”(prediction) should be taken with an ample salt supply). As you approach the “Hornopiren Nac. Parque” sign (3 Km before you enter the town) you are treated to a beautiful scene of the Bay, fishing boats, surrounded by snowy mountain peaks.

The town however, is Chile-typical, garish color paint on old-looking buildings, with a pleasant square looking out on the bay. I doubt many will spend much time looking at the town when the natural backdrop is so amazing. We followed our local guide out to the “Camino del Parque Nacional, passing for the moment the Campground next to the old Church across the lane from the waterwheel. It was quite a déjà vu to at last see the “El Rincon” sign on the property we had looked at on the web so many times.

The road is hemmed in by lush greenery and gets increasingly narrow and rutted. A quick right at the Lodge sign and the manicured grounds and the view of the huge green mountains thrusting up behind the Lodge building, and I was sold - I hadn’t even seen the river.

Patagonia is so beautiful that you find yourself looking down at the ground for a few moments, just to process what you are seeing, to prevent the “Oh, another pretty snowy peak”, syndrome. The light is so strong and the colors so vivid, you have to close your eyes for a moment to prevent overload. You really see the first waterfall, but the second and third are just sketchy. I think that is why the tourists to this part of the world always have a blank look on their faces. They have a schedule to keep and they have already seen too much.

I found myself on the porch of the Lodge sipping coffee, staring at the huge volcano that blocks the northward view. To the south was a view of green, tree-covered slopes of the nearby mountains, and snow-capped in the far distance. The sound of the river 30 meters away made the experience almost perfect. As the owner led us to the river, I began to remember the National Park on the ‘Big Island’ of Hawaii - everything green and wet with the spray from the rapids - every breath a revelation. The river was the final clincher. I had been looking for a place like this since I was a child. Anywhere else on the planet and this would be a Park and jammed with crowds of numb strangers.

I had found home.
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Carmen Stigliano
New member
Username: Carmen

Post Number: 10
Registered: 9-2005
Posted on Tuesday, May 23, 2006 - 12:52 pm:   Edit PostPrint Post

"...In the meantime, the easiest way, we're told, is for us to sign a document which states the land was bought by an Argentinian but with our money, which guarantees that they cannot sell or do anything with it without our consent. We can begin construction and once the form is accepted (a year or so) we get the title transferred to us. Apparantly this is how many foreigners do it??? (we are Americans)...."

I strongly suggest you to get the advise of a lawyer in Buenos Aires.

Real State Limbo Ownership does not exist.


Carmen
}
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Apartmentsba.com
Member
Username: Saint

Post Number: 60
Registered: 5-2005
Posted on Tuesday, May 23, 2006 - 7:15 pm:   Edit PostPrint Post

As both Carmen and I mentioned, consult a professional. I am heavily involved in real estate in Argentina. I can't tell you how many horror stories I have heard from other Americans that just winged it and got excited about real estate here and acted in a way they would not have in the USA. The amazing thing I see on a weekly basis is intelligent individuals/investors that are very careful in the USA, yet they are so careless when investing abroad in a country they know nothing about nor speak the local language.

In this kind of atmosphere you need to be especially careful. I love Argentina, it's my new home but NEVER delude yourself into thinking that you can just trust someone. People here are some of the most ruthless, unethical I have seen in my life and I have done business all over the world.

Real estate is heavily unregulated here. That cheap piece of land or apartment or house might not be so cheap when you find out there are severe problems, the title is not free and clear or your lawyer simply gave you wrong information.

I can give true story after true story of foreigners here that got cheated. As helpful as these websites are, message boards are NOT a dependable place to get important financial advice about investing in Argentina. There is no substitute other than doing due diligence and consulting with a good consultant and good lawyers that have a verifiable and solid reputation.

I'm not trying to scare you Julie. Argentina is a wonderful place to invest if you do it properly. I own many properties here. I truly believe in Argentina as an investment and many investment professionals and magazines agree with me. I'm only saying to be careful and do alot of due diligence and know and understand the laws.

Bariloche is a wonderful place and I myself just placed an offer on land there to build a luxurious house. Best of luck to you.

Mike
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Apartmentsba.com
Member
Username: Saint

Post Number: 61
Registered: 5-2005
Posted on Wednesday, May 24, 2006 - 7:14 pm:   Edit PostPrint Post

More Buenos Aires real estate in the News. This is from today's Buenos Aires Herald (May 24, 2006)

Does Argentina offer more than Paris?

World-class restaurants, museums and health-care services are luring overseas buyers to Buenos Aires

By James Scott

Buenos Aires Herald


Chicago residents Mark Warden and his wife Mary Beth found a steal on the ideal second home, offering a retreat from the bitter Illinois winters, great culture and stunning architecture. The only catch is it takes an overnight flight to Buenos Aires to get there.

The couple paid about US$150,000 last year for a 90-square-meter, one-bedroom apartment on Rodriguez Peña in Recoleta. The experience went so smoothly that the Warden’s are now closing on another place – in a century-old building – that cost just US$60,000.

“I was surprised at the sophistication of the city,” said Mark Warden, a retired president of an Illinois community college. “This could be any place in Spain or Italy.”

The Warden’s aren’t the only ones who’ve opted to move farther south than Florida in their search for a second home, trading in the comforts of a US lifestyle for the rich cultural experience Buenos Aires offers.

With real estate prices soaring across much of the United States, Canada and Europe, investors increasingly are buying up everything from apartments in downtown Buenos Aires to farms in the countryside and even wineries that dot the basins of the Andes Mountain.

The rush is fueled in part by the 2002 devaluation of the peso – once pegged one-to-one with the dollar – that has meant that an apartment in the heart of the city can go for not much more than what a luxury car might cost back home.

Cheap prices aren’t all that is fueling the trend. Buenos Aires offers world-class restaurants, museums boasting European masters and modern health care services that have landed the city on the covers of many world travel magazines.

“It offers pretty much everything for everybody,” said María Reynolds, who along with her husband, Paul, runs Reynolds Propiedades, an agency that helps foreign buyers. “If you like tango, there’s tango. There is also polo, lots of golf courses and the weather and food are fantastic.”

Bargain prices

The obvious draw for many is price. In Paris, the costs are about US$8,000 to US$9,000 per square meter. In New York’s Manhattan, the average cost per square meter is US$10,000 to US$12,000 and in some parts of London the numbers can exceed US$18,000 per square meter.

In contrast, Puerto Madero – Buenos Aires’ hippest, not to mention most expensive, new neighborhood that lines the water – the cost is about US$3,000 a square meter.

Homes in the more established Recoleta, with a feel of New York’s Upper East Side, range from about US$1,400 to US$2,600 per square meter. Barrio Norte is an even better deal with at US$1,100 to US$1,300 per square meter.

While costs have been climbing in recent years, many believe the market will continue to rebound, pushed in part by the now soaring tourism industry. The number of visitors is growing roughly 10 percent per year with more than four million tourists expected to visit this year.

Chicago-born businessman Michael Koh helps international investors and second-home seekers buy real estate through his company Apartmentsba.com.

Koh, who bought his first house here in 2003, said he now buys an average of two to three properties a week. His team of 35 employees helps handle everything for clients from showing properties and writing sales offers to overseeing the closings, renovations and decorations.

His business has boomed. What started as buying apartments for individual investors has morphed into working for investment funds, buying land and building new homes and now undertaking the acquisition of dated buildings to transform them into high-end hotels.

“You can buy cheap real estate and make money anywhere in the world,” Koh said. “The good thing about Buenos Aires is it is real estate you will actually use.”

María Reynolds said her family’s business has experienced a similar increase since the devaluation. Prior to the devaluation, the company focused on temporary rentals, handling only a few sales each year

The company, which now sees more than 100 sales a year, offers seminars twice a year for prospective buyers looking to navigate the bureaucracy.

To facilitate overseas buyers, Reynolds has developed a property management arm of the business as well as provides interior decorating services for clients looking for a hassle-free investment.

“We see quite a stable demand. It has not gone down,” Reynolds said. “On the contrary, there is more international promotion. We see more foreigners becoming aware of this possibility.”


How it works

Buying real estate in Argentina can be daunting for overseas investors. Mortgages are nearly nonexistent, meaning transactions are done in cash. Also, sellers rarely will want to register the actual sales price hoping to avoid taxes.


Unlike other countries, however, overseas buyers here can purchase a home in their name and are guaranteed the same protections as local buyers.

Yearly expenses include property taxes and a 0.75 percent wealth tax that is based on the value of the property. Property owners that rent also need to withhold 21 percent of the income to pay rental taxes.

Prior to selling a property, the government may do a check of the utility records to see if the property was occupied. If a owner hasn’t paid the rental taxes, then the government will let you know what it believes is owed in taxes.

For those looking for a stress-free move, businesses have sprung up that will handle most everything. Cliff Williamson runs Transpack Argentina, a relocation firm that will pack your house up anywhere in the world and import it to Argentina.

Williamson also runs Latin American Homecoming, a subsidiary that handles everything from picking clients up at the airport to providing profiles of neighborhoods and schools. His business even offers a 24-hour hotline for late night emergencies.

“We’re moving in a lot of people,” said Williamson, who averages about 400 moves into Latin America a year, many involving corporate relocations. “One of the things that makes Argentina very attractive is that the rest of the world is so turbulent. Argentina doesn’t look so bad.”

Chicago-based flight attendant Anne Elizabeth fell in love with Buenos Aires 30 years ago, but didn’t have the resources then to make an investment.

A year and a half ago, she came back to visit, rekindled her love with the city and ended up buying a one-bedroom apartment in a century old building just a few blocks from the Recoleta Cemetery. Designed by a French architect, she said, the building has a sister in Paris.

Elizabeth spent US$93,000 to buy the unit then spent another US$40,000 renovating it, including a complete overhaul of the kitchen and bathrooms with granite, appliances and cabinets. Her taxes, regime and utilities, she said, never exceed US$250 a month.

For her, Buenos Aires was less about the deal and more about the lifestyle. “I love walking across the street to get my fruit and vegetables from a local vendor,” said Elizabeth, who spends one week a month here. “Everybody in the neighborhood knows my name. I love that part of it.”


On the Net:

www.reynoldspropiedades.com
www.apartmentsba.com
www.transpack.com.ar
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elizabeth gordon
New member
Username: Babeth

Post Number: 1
Registered: 5-2006
Posted on Sunday, May 28, 2006 - 1:56 am:   Edit PostPrint Post

Is anyone worried about the recent inflation and how it will effect the real estate market?
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Laura Zurro
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Username: Sapphos

Post Number: 21
Registered: 2-2006
Posted on Sunday, May 28, 2006 - 12:15 pm:   Edit PostPrint Post

About the patagonia questions, I came across these two webpages both unfortunately in Spanish, but explain what is happening in the frontier zones not just in Patagonia, but throughout the country.
http://www.clarin.com/suplementos/zona/2005/10/16/z-03415.htm
Bill For Land Ownership By Foreigners
Laura

(Message edited by admin on May 28, 2006)
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Roberto
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Username: Admin

Post Number: 480
Registered: 12-2004
Posted on Sunday, May 28, 2006 - 4:09 pm:   Edit PostPrint Post

Laura, I can't believe just a single individual can own 7% of an entire state. If I weren't argentine I would be laughing. Much has been said about Ted Turner but what he owns pales in comparison to the other guys. Another example of how much of a "party" we have here. Noone takes responsibility for our longterm wellbeing. In the US, just the "operation", not ownership, of ports by a middle eastern company created a national uproar.

That was a great article, thank you!

(Message edited by admin on May 28, 2006)
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Roberto
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Username: Admin

Post Number: 481
Registered: 12-2004
Posted on Sunday, May 28, 2006 - 4:21 pm:   Edit PostPrint Post

Elizabeth, I am!

Not sure what may happen to real estate. Traditionally, as inflation rises our currency loses value -as economic laws have it- while real estate remains valued in foreign currency meaning you may need more pesos to purchase the same unit. If you are in dollars, all is well. This happened historically, but it is not happening now, probably because of controls or a still strong fiscal discipline by the government. But it is worrisome in that it may be hiding pressures that could brew another future crisis. The one different element compared to past inflationary processes and the effect on real estate value, is the sustained influx of foreign capital buying properties. Should rates catch up with inflation it may not mean the end of cycle, just because of this additional force coming from abroad.

But having lived through 2 hyperinflations, the present price controls and whimsical behaviour from the government is something to watch very closely. In Argentina, we can mark prices up faster than shooting from the hips.
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elizabeth gordon
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Username: Babeth

Post Number: 2
Registered: 5-2006
Posted on Sunday, May 28, 2006 - 9:08 pm:   Edit PostPrint Post

Interesting. It seems that foreigners are attracted to Buenos Aires because it is cheap. If inflation continues and the exchange rate doesn't change then Argentina will also get expensive for foreigners and I wonder how many will continue investing. How are argentinians reacting to the news? Are they buying mroe foreign currencies? More real estate?
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Riyad Anabtawi
Junior Member
Username: Riyada

Post Number: 32
Registered: 12-2005
Posted on Sunday, May 28, 2006 - 9:23 pm:   Edit PostPrint Post

Elizabeth
I think so too that prices are going up, even though the exchange rate is the same. Just to show you how things are so crazy in Argentina, I have made great investments buying up tons of construction material when the peso got devalued.. like bricks, cement, steel etc.. for my future bigger house at the Quinta Anabtawi. Now everything has trippled in price and there is no end in sight..it is a weekly price hike.
Look at Brasil and Chile: super expensive and they had the same hyperinflationary problems as is now in Argentina..
I really dont get it what is going on here.. in Argentina there is very high inflation now, and yet it goes unnoticed in the currency world.
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Roberto
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Username: Admin

Post Number: 484
Registered: 12-2004
Posted on Sunday, May 28, 2006 - 11:31 pm:   Edit PostPrint Post

For those who have never gone through periods of high inflation or even hyperinflation... the *only* thing you must avoid at all costs is cash in local currency, since it is the object of constant devaluation. We, having experienced this many times, know that the thing to do is to be on hard assets or foreign currencies and by hard assets I mean anything. A close relative of mine made fortunes just by stocking industrial chemicals in warehouses. In inflation processes, people buy stuff. Because any stuff is better than the currency subject to loss of relative value.

Elizabeth, almost all argentines buy foreign currencies when they can. And those who are in local bonds or cd's in pesos have their fingers in the trigger for sure. If they don't, they are only to blame for having forgotten past lessons. But this doesn't mean at all that a collapse is near. Present inflation may be due to many different causes and can also be a long standing re-adjustment after the gigantic devaluation of 2002, so there is really no reason for panic today. Salaries of usd $200 a month are as much of a joke as salaries of usd $20k/month, like in the 90's. We could be leveling off now, that is all. I still had a wonderful 14 oz. filet mignon tonight for usd $7. But considering this is Argentina we should pay attention when we hear (or feel) the word INFLATION.

> I really dont get it what is going on here.
Ah, Riyad... How long have you lived in Argentina? Were you here during the 90's or the inflationary process of Alfonsin? Did you go through the collapse of 2001/2002? Let me add this, if I may. If you are a foreign investor who changes dollars and makes a deposit for a year in pesos and gets 12% or 15% in interest -guaranteed by the government-, and at the end of the period you buy back your dollars, how much money did you make in dollars and guaranteed by the central bank? Do some research on "capitales golondrina" and "patria financiera" to understand better how the game is being played.
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Riyad Anabtawi
Junior Member
Username: Riyada

Post Number: 33
Registered: 12-2005
Posted on Monday, May 29, 2006 - 7:03 am:   Edit PostPrint Post

Roberto..
I am a newby here, 5 years having lived 1/2 this time in the US.. Now I am finally settled here for good..
So please educate us on how things work.. I will definitely do some research but would you please touch a little on what is "capitales golondrina" and "patria financiera"? What has it to do with what I said..?
Cheers
Riyad
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Roberto
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Username: Admin

Post Number: 487
Registered: 12-2004
Posted on Monday, May 29, 2006 - 8:14 am:   Edit PostPrint Post

capitales golondrina
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Apartmentsba.com
Member
Username: Saint

Post Number: 62
Registered: 5-2005
Posted on Friday, June 02, 2006 - 9:29 pm:   Edit PostPrint Post

Roberto makes excellent points. The only thing certain about Argentina is that there is no certainty. Still, for most locals...real estate in good areas will still be a safe haven for them. I know MANY families (including politicians) and guess where they and their friends put much of their wealth/savings/cash?? Real estate.

Inflation is a real concern here. That's for certain but tourism is also VERY important here now in Argentina and the truth is Argentina depends on it. It's now a u$s 3.5 BILLION a year business for the country and one of the biggest money makers for the country.

I don't see it slowing down as I predicted many years ago. I don't see real estate purchases from foreigners or locals slowing down either. I think that if history is a good teacher it will show many that if there is another financial collapse here that will make real estate even more of a safe haven.

I can promise you that if real estate prices get anywhere near the levels of the crash during 2002 you will have MANY people snapping up properties. I sure as heck would be picking up tons of real estate if it got as low as it was in 2002. It bounced back very hard and very fast. One of the biggest mistakes I made was not buying up apartments in Recoleta in 2002 when everything was telling me to start purchasing up real estate cheap. Oh well. I waited over 1.5 years but still did ok.

The difference now is that 4 million tourists a year visit Buenos Aires now and fell in love with the country and have exposure to it. Before 2002 it was too expensive and no one even knew about it. Now, investors (including hedge fund companies) have found out about the city and the country as an investment so much has changed from before. Many magazines, newspapers and publications are listing real estate in Argentina as one of the best investments in the world.

For many different reasons I think you will see real estate in good areas continue to go up. Combine it with tourism potential and I think you will see a continual climb. I'm not saying it will last forever. Few things go up in a straight line. Still, you have to look at the big picture here. Buenos Aires is a wonderful city that so many people fall in love with. You can buy cheap real estate anywhere in the world. I can buy an apartment in Bulgaria and probably do fairly well as an investment but how many times a year am I going to go to Bulgaria? BA is a wonderful place that is so easy to get to from the USA.

In the grand scheme of things I'd take a nice apartment in Recoleta vs. 400 share in Google any day of the week!

Good luck all.

Mike
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Roberto
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Username: Admin

Post Number: 495
Registered: 12-2004
Posted on Friday, June 02, 2006 - 10:27 pm:   Edit PostPrint Post

Mike, can you comment on the boom you guys are going through down there?

I just came back from BA and on my last day I heard some official figures on new permits up 70% compared to same quarter last year...If I heard correctly, that is a huge increase. It was said that La Recoleta contributed to that figure at only 18%, one of the lowest ratios compared to other neighborhoods.

I spent time in Palermo Hollywood/Soho and it was crazy over there. Also, ruggero from this forum -who handles rentals in neighborhoods other than La Recoleta (Las Canitas)- commented about it.
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Apartmentsba.com
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Username: Saint

Post Number: 63
Registered: 5-2005
Posted on Friday, June 02, 2006 - 11:08 pm:   Edit PostPrint Post

Hi Roberto,

You can't really base things too accurately by "official figures". You more than anyone knows that things are so "black" here. About 80% of the property owners I buy from want to record a false ILLEGAL price. The most ironic is the higher they up in their position in the government they more they want to lie. I'm walking away from several deals if the locals won't do things in the white. It's a very difficult situation here.

I recently bought a large apartment from a politician from the provincia and he wanted to only record it for 40% of the purchase price.

Real estate continues to boom here. I buy about 2-3 per week. We aren't just buying apartments in Recoleta. I've already started buying land, apartments and buildings in Palermo Soho/Viejo/Hollywood. That area as I predicted is exploding. We are building high end houses in that area now. I predict that will be a really high end growth area.

The best increases on property prices has been in pre-existing apartments 70 sq. meters or so in good areas like Recoleta, Palermo, Barrio Norte. There was a La Nacion article that was interesting that came out May 23. It told how average prices have gone up 30% in the past year.

Tourism just keeps going up as I also predicted. I don't see any slowdown in sight. I just negotiated the purchase of a large building to make one of the most poshest hotels in Buenos Aires. You should start hearing about it once the deal closes. I'm now getting into the hotel and house business as well.

I still believe long-term Recoleta is the best place to buy/own property. I own many properties and always looking for more. Mostly I buy around the Cemetery area in Recoleta. In a downturn, that area will be more desirable and stay affluent. In some of these other areas now that are trendy now...who knows later on during some economic crises. I always think exit stategy in any investment that I make.

Things are certainly booming and I see that trend continuing. I'm trying to buy as much good land near Plaza Serrano as possible. It's funny as I picked up a prime lot on Russell street in Soho and an Australian client I know bought the lot next to me and another foreigner owns the lot next to us. We all are planning to develop our land.

As I also predicted would happen...more and more and more of Buenos Aires is becoming foreign owned........Which I think is a good thing...
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Tom Woodson
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Username: Diverdown48

Post Number: 12
Registered: 6-2006


Posted on Monday, June 12, 2006 - 11:36 pm:   Edit PostPrint Post

This is a great blog.
Thanks Roberto for providing it for us if you are the genius behind the website.
I happened on a great land opportunity in Argentina.
There are still hidden little golden opportunities, did I say little, 14,000 acres could be called little down there. But a seaside property with a long coast line is a good find.
Guess the price.
I am happy to say it is a good investment.
If you wanna know more email me at bluewaterdown@yahoo.com
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Roberto
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Username: Admin

Post Number: 533
Registered: 12-2004
Posted on Tuesday, June 13, 2006 - 2:15 am:   Edit PostPrint Post

Thank you, Tom.

You don't really need to drop your email here. Mostly everybody will locate your profile and follow the link to your site, as I did. And it will look less spammy, lol. The fact that you are posting some impressive business goals will no doubt catch people's attention. Guaranteed.

As for the forum, we all have contributed equally and I shouldn't be the one taking the credits. Thank you, though.
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Tom Woodson
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Username: Diverdown48

Post Number: 20
Registered: 6-2006


Posted on Tuesday, June 13, 2006 - 10:09 am:   Edit PostPrint Post

Sorry about that.
Still learning the ropes.
Anyway. Thanks for your help.
As you know I am doing the developement deal down there. I am really happy about it. It is a chance of a life time. It will be an opportunity to do a lot of good for a lot of good people and not kill the environment.
We plan a zero discharge waste water plant. I do not like the idea of dumping where I swim and play or for that matter, dumping anywhere.
A system where one uses the treated water, treated to the purest possible degree, to water a golf course, a retiree's yard, or the public park are good uses in my humble opinion.
We have other innovative ideas, well not actually innovative, but using the proven ways already out there in a state of the art development where the last residue of garbage is used to build streets is worthy of serious consideration.

Hasta luego
Tom
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Whitelion
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Username: Whitelion

Post Number: 1
Registered: 6-2006
Posted on Thursday, June 15, 2006 - 6:25 pm:   Edit PostPrint Post

Hello everybody, great forum, just dicovered today... I was reading, and i can offer help for anyone interested in Argentina Farms, we have experience in that area, and lands for agriculture too in the Buenos Aires State. I am agree like here say It seems that foreigners are attracted to Buenos Aires because it is cheap. Too many farms are being selling to eropean people, not only for agriculture, there are other cases like land for hunting.
Regards.

(Message edited by admin on June 15, 2006)
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James Guglielmino
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Username: Jgug1

Post Number: 1
Registered: 6-2006
Posted on Friday, June 16, 2006 - 8:08 pm:   Edit PostPrint Post

My situation is a little different. I am not much interested in investing. I am seriously considering moving to Argentina and I like the idea of a small vinyard. I too, have seen the very low prices and have assessed the price of labor for building. Water seems to be an issue and I am wondering how one protects oneself from unscrupulous sellers. How does one find a reliable representative especially since my Spanish needs lots of benefit of immersion. :-)
Also, I am looking to meet private pilots and discuss what private flying is like in Argentina. Anyone here fly? Anyone have an airplane based in Argentina? I am looking at Rosario and Cordoba. I will forget the matter if I cannot expect to be able to take advantage of my own airplane. Thanks. Very neat site.
Jim Guglielmino
Mission, KS
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James Guglielmino
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Username: Jgug1

Post Number: 2
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Posted on Friday, June 16, 2006 - 9:09 pm:   Edit PostPrint Post

I had another thought regarding closing on a piece of property. Why not change dollars into pesos here in the states and then have the pesos electronically transferred to an appropriate bank in Argentina. The charges for the exchange to pesos would be fair, maybe not much at all if it is a bank a person has dealt with for a long time. Then, the fee for the exchange back into dollars would presumably be reasonable also if it is a bank in Argentina that one is going to be doing business with.

Another question arises: How secure are the banks in Argentina now? Would one want to keep the bulk of one's funds in a bank in the Bahamas for example and have funds transferred to a bank in Argentina as needed. I apologize for inundating the forum with questions. Hopefully, some of them and the answers will be useful for others.
Jim Guglielmino
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Apartmentsba.com
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Username: Saint

Post Number: 67
Registered: 5-2005
Posted on Friday, June 16, 2006 - 9:36 pm:   Edit PostPrint Post

Hi James,

What you are suggesting doesn't make sense. If you notice, many exchange places don't even have pesos from Argentina and the ones that do the exchange rate is horrible. The cheapest way is to just use a private casa de cambio or "private bank". The exchange rate is about 1.5% - 2% these days. Also, consider, at least in Buenos Aires in the Capital, most properties are priced in u$s dollars so you still have to convert the pesos back to u$s. Trust me on this....the cheapest and easiest method is the private exchange houses. There is NO free way to get u$s dollars into the country short of carrying it on a plane and bringing it which no one will recommend.

No one really trusts the banks here. I have local accounts but don't keep too much money in it. Just enough to pay bills, etc. There is no reason to use a local bank. Always protect yourself and just use a USA bank or a bank in the UK, etc. It's very very easy to just use a bank in the USA and withdraw pesos to live. You can sign up for internet banks that don't charge you to withdraw and you can take out u$s 500 per day per card. You can open up several accounts and withdraw up to u$s 2,500 per DAY which is enough for most people.

Good luck.
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Tom Woodson
Junior Member
Username: Diverdown48

Post Number: 40
Registered: 6-2006


Posted on Friday, June 16, 2006 - 10:34 pm:   Edit PostPrint Post

James
You should have no proplems with flying in Argentina.

Little if any expertise on grapes for wine but a lot on the taste of the vino. Anyway, I think it is best to grow the grapes in drier regions. Lack of water may not be a problem.

maybe someone else can help with this.

Hasta Luego
Tom
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Roberto
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Username: Admin

Post Number: 544
Registered: 12-2004
Posted on Friday, June 16, 2006 - 10:44 pm:   Edit PostPrint Post

Whitelion, there is a thread here about buying farms in Argentina where perhaps you can enlighten us more :-)

James, Mike is right. Better be cautious with the local banks or foreign banks that have offices here. Things could go reasonably well until the tide turns, and although this may take years or decades, when it does there are no safe harbors.

Whenever you transfer money into the argentine banking system, the Central Bank automatically matches that amount into local currency, so you always see "pesos". Even the ATM machines that have been programmed to deliver money in american currency will do so in "pesos" (someone correct me if I am wrong). So whether you change the money first in the US or transfer it 'as is' the end result will be the same. Keeping your money in a tax paradise or shell country will be just as safe as that offshore location appears to be. Considering the recent tax treaties the IRS signed with 9 caribbean countries (TIEA) the Bahamas and related nations may still remain safe... but less private.

I have an alternative view to Mike's regarding the cost of all this. According to my latest information, local banks will discount .5 % of the total amount transfered or a minimum of usd $60 for small transactions. Anything above 30k will come under scrutiny and anything above 10k will do so in the US. The 'private' houses he mentioned may charge more or less the same but the difference is that this *might* go unrecorded. Noone really knows.

Argentina has many 'private airports', specially the very large estancias or 'plantations' like the ones in Misiones. And this is as far as my knowledge goes. On reading your post a second time, I realized that if you are talking about flying your own planes and transfering large amounts of money... you may become the object of even more scrutiny.

What type of planes are you interested in flying/buying?
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Roberto
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Username: Admin

Post Number: 545
Registered: 12-2004
Posted on Friday, June 16, 2006 - 10:50 pm:   Edit PostPrint Post

Tom, ask away about wines/vineyards. I worked 3 years for the largest local winery at the time (Penaflor) and was heavily involved with exports of fine wine, visiting vineyards in Mendoza and San Juan in many ocassions. My knowledge may be outdated, though. If anyone is interested I will open up a thread.

(Message edited by admin on June 16, 2006)
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Whitelion
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Username: Whitelion

Post Number: 3
Registered: 6-2006
Posted on Saturday, June 17, 2006 - 2:38 am:   Edit PostPrint Post

Thanks Roberto, i did not see that thread, i am new in forum.
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Sergio
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Username: Sergio

Post Number: 1
Registered: 6-2006
Posted on Saturday, July 01, 2006 - 2:45 pm:   Edit PostPrint Post

Hello All:

First post here but I have read most them. I have to say that this site is full of useful information. Kudos to Roberto and all posters. !!!

I am thinking of investing in Argentina (flats, apartments, commercial) for a long term steady income. As an argentinian, I do understand the culture, language. However, I have never done any business there. I may choose to live there 6 months out of the year and back to US.

By reading some of the posts, I do understand how people want $US for transactions but I have a few questions: I do understand that for some of this , I will need a lawyer but it will help if you can answer them in general terms.

1) How do businesses (exporters and importers nationals and foreigners) do financial transactions. My guess is that they have bank accounts in $US and there are no ¡§cash¡¨ deals?
2) I already have a $US bank account in one of the national banks , however this was setup the ¡§normal¡¨ way by knowing someone ƒº. What does it take to get a $US account at Citibank or bank of London , etc?
3) The reason real estate in done in ¡§cash¡¨ basis, is this only done to avoid taxes? Assuming the seller has a $US account, why wouldn¡¦t he accept a wire transfer from the US in dollars?
4) I heard that people setup account in Uruguay and then cross the river with the bag full of dollars. Is this the safest way?
5) I was told by a CPA that if I take large amount of dollars to Argentina , I need to show where the money came from? I have no issue with that but for example how is this done? For example, if I sold a house in the US for $500,000 and I want to buy a $300,000 in Argentina what happens? What paperwork do I need?
6) It will available to me large amounts of money from businesses, pensions, 401K etc on a monthly basis. I obviously can get the money through ATM machines for living expenses. However, if I want to buy a new car for $30,000 (for example), again how do I get the money there?
7) If I already have paid taxes in the US on any money I use there for living expenses or to buy property or any large purchase, what happens with the DGI? What paperwork do they need?


Thanks in advance.

Sergio
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Tom Woodson
Member
Username: Diverdown48

Post Number: 63
Registered: 6-2006


Posted on Saturday, July 01, 2006 - 4:24 pm:   Edit PostPrint Post

Hello Sergio
The banks in Argentina are making a comeback in credibility. The people there blame the banks for the financial crisis. It was the government that floated the pesos against the dollar. The banks took the blunt of the annimosity. This is a simplistic but pretty much the bottom line.
Citibank and Bankboston are in Argentina along with other international banks. As to their policies the best source is to contact them directly.
You can wire transfer money from the US to Argentina as in other countries. Sellers who are trying to avoid Argentine taxes and closing costs may want to do business in cash. I recommend doing it the legal way. Why go into a new country where you would like to live much of the year and one of the first acts is to cooperate with someone who is breaking the law.
I would be wary of any seller who is not willing to do business the right way. There are pleanty of properties for sale in Argentina.
To buy property in Argentina you go through their version of a notary. It is his job to make sure the property is transferred without any liens or other blights on the title. Put down the deposit which goes into escrow and a month later the closing can be held.
If you invest there you will join a large number of Americans that is growing who own property there, the two most notable that I know of are Ted Turner who owns a ranch and the movie star, Robert Duval who, along with his Argentine wife, own a hotel.
Argentina is a wonderful place to live and do business.
Hasta Luego
Tom
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Tom Woodson
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Username: Diverdown48

Post Number: 64
Registered: 6-2006


Posted on Saturday, July 01, 2006 - 4:48 pm:   Edit PostPrint Post

Hello Sergio
My partners and I are invoved with the developement of a coastal resort/retirement community which I think you and others like you will be interested in.
We are sitting on a very large piece of property that has many possibilities.
We plan to build infrasture that is environmentally friendly.
Our waste treatment plant will utilize the latest cleaning processes that cleans in multiple stages. The final product that is water clean enough to use on golf courses, parks, and yards as well as in commodes. The solid waste will be processed with to the extenct the final product will be used to fertilize non edible plants and trees.
Other state of the art facilities will be combined with golf, fishing, tennis, a casino, a spa and many other recreation and resort facilites.
There will be several thousand acres of recreation lands.
Hasta luego
Tom
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Riyad Anabtawi
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Username: Riyada

Post Number: 58
Registered: 12-2005
Posted on Saturday, July 01, 2006 - 7:38 pm:   Edit PostPrint Post

I have learned the hard way here in Arg.
Problem I discovered is that government is loaded with red tape thanks to the corrupt politicians, aggrevated by the fact that they employ the worst of the crop of people, the least educated to deal with your day to day paperwork.
I really dont know how, why and where they get these public employees to serve the public.
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Tom Woodson
Member
Username: Diverdown48

Post Number: 65
Registered: 6-2006


Posted on Sunday, July 02, 2006 - 10:58 am:   Edit PostPrint Post

Riyad
I am not sure that I have the answer.
Even in the US sometimes it seems like the government employee is trying to do his/her best to hinder us when we are attempting to do something.
I have had the good fortune for the most part in Argentina to have dealt with government people who were very helpful. I remember the immigration people in Bahia Blanca and even Buenos Aires who were way over worked but friendly and efficient.
Is that possibly the answer. Overworked and underpaid. Taxpayers pay the salaries of government employees. Hmmm. I don't like taxes, do you?
I have dealt with the folks at Fauna and the Buenos Aires province hunting place. They all were helpful and definitley knew thier jobs.
With the customs people, I did have a problem once but it was a rediculous situation which I gave up on without much consternation. My sister shipped me some clothes and my VA medications. They wanted to charge me over a hundred US dollars for stuff I could get at the local chemist for a few bucks and in the case of the dockers, they were old. I wonder where they are today. I am smiling here.
I have learned over the years that if you take the attitude of I am stupid and I really need your help, government people will take care of you.
Also I show respect to them. They really are overworked and underpaid for what they do.
One of my very astute partners likes to say he puts on his stupid face and finds out all he wants to know without giving away his motive. He is in the tourist business in a big way down there having control of over 1/2 million acres of hunting land.

Government employees are doing a job that everytime someone walks through the door, their work load increases.

In the US you won't find many professional degree graduates working at a government customer service counter. In Argentina that person may have an engineering, accounting or other graduate degree.

Hasta Luego
Tom
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Tom Woodson
Member
Username: Diverdown48

Post Number: 66
Registered: 6-2006


Posted on Monday, July 03, 2006 - 12:22 pm:   Edit PostPrint Post

Some interesting information.

Foreigners can own real property in Argentina with only one restriction: only Argentine nationals can own property along the borders of Argentina with another country. Argentina has strongly embraced an open free-market philosophy, and foreign investors in any sector can take their profits, dividends, or capital back out of the country at anytime without government restriction.14 Foreign investors have the same legal rights as nationals do under the laws and Constitution of Argentine including access to local courts or other administrative procedures for the settlement of business disputes. In addition, the United States and Argentina signed a bilateral investment agreement in 1992 through which U.S. investors have the right to take disputes to international arbitration when other methods of reaching agreement have failed.15

Foreign investors also can take confidence in the safety of their investments in Argentina from governmental expropriation. First, the Argentine government has not engaged in any expropriations since the government established its current and continuing course of economic reform and development in 1989. Second, U.S. investors can take heart from the explicit statement in Article IV of the U.S. and Argentine investment agreement that investments will not be expropriated or nationalized without both demonstrable public purpose and the timely payment of compensation at fair market value.16 The U.S.-Argentina agreement can be reasonably regarded as securing the general treatment of international investors in the country.

Hasta Luego
Tom
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Eric Baeder
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Username: Doggieboy

Post Number: 1
Registered: 7-2006
Posted on Monday, July 17, 2006 - 12:39 pm:   Edit PostPrint Post

For the last 2 months I have been obsessing about living in Patagonia 6 to 9 months of the year when I retire (someplace like Bariloche). I like the idea of living near the lakes and mountains, yet don't want to be too isolated. Unfortunately, I am not wealthy and it's going to be about 15 years before I can retire. My idea was to purchase a lot in the near future and build a home on it when I stop working. After reading Doug Harris's comments about purchasing land in the Patagonia region of Argentina, I can't help but to think I might be wasting my time. I'd hate to invest money and effort of going to Bariloche only to find out that even if I thought I would like to live there and could afford to purchase...the Argentineans really don't want me to. No one wants to live where they are not wanted. Even if it is govenment sponsored. I'd would appreciate additional views on this. Thanks.
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Roberto
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Username: Admin

Post Number: 617
Registered: 12-2004
Posted on Monday, July 17, 2006 - 6:28 pm:   Edit PostPrint Post

Eric, why would Ted Turner or the Benetton family purchase millions of acres in argentine patagonia?

Noone said moving to or living in Argentina was going to be a piece of cake. You are considering a country that has lived in turmoil for the last 50 years with sporadic calm periods. This comes at a price and is crystalized in some of Mr. Harris' own experience. If you buy into Argentina you must buy into everything we are, including all the burocracy that borders hell. But there could also be a reward like many foreigners have discovered.

Bottom line is that there are crooks (and difficulties) everywhere and Mr. Harris' is just one opinion among many. If you are seriously considering buying, partially moving or retiring in patagonia do yourself a favor and spend time there first. Come into contact with argentines, not the crooks, not the business savvy persons that you think are there to get you... but the bakery employee handing you a 'factura de manteca' during your morning breakfast at a cafe, or the corteous guide helping you understand why we have so many trouts in our lakes... briefly, the average argentine, the people who don't care whether you move or not, neither if Doug Harris buys property next to theirs.

To the common person, foreigners moving to our country means little. We, argentines, live here, have been raised here and probably will die here too. We are usually too busy with our own daily dramas to think on non-natives finding this place an attractive one. We like it and feel proud about it but at the end of the day it all boils down to how many bills we can pay.

Forget about Harris and even argentines. Moving is about you. How you feel among us, what experiences can enrich your life while here, what new ways of enjoying life you may come across...

Just come down and give us a try. News of scams, crimes, and the like have been vastly exaggerated :-)
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Tom Woodson
Member
Username: Diverdown48

Post Number: 84
Registered: 6-2006


Posted on Monday, July 17, 2006 - 11:50 pm:   Edit PostPrint Post

Good one Roberto
I feel like I am, if nothing else, an educated person. The degrees are on the wall.
But in my experiences in Argentina, wow, its worth it. The best deal an American can have who can afford it is summer in the states and summer in Argentina. I like warm weather.
From a turmoil point of view. I have been at some of the demostrations. They are fairly entertaining and non violent. Especially if you like drum music. Sometimes they will make you late for a meeting etc by blocking the street. No more inconvient than a wreck on an interstate.
I know some people who have property for sale in the area you seek. A little more information and I will pass it along to them if you like.
If you do not speak Spanish, you should learn, I suggest a course taken in Argentina. The language there is Argentine Spanish which is a mixture of Spanish, Italian, French, English and a lot of others all into one. I would someday like to see a web sight translator like Altavista.com bable fish that translates American English and vice versa Argentine Spanish.
Hasta Luego
Tom
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movingtoargentina.typepad.com
Junior Member
Username: Sapphos

Post Number: 36
Registered: 2-2006
Posted on Tuesday, July 18, 2006 - 7:48 am:   Edit PostPrint Post

Eric, I think you have taken a negative viewpoint based on one persons experiences. There have been many more successful real estate transactions here than unsuccessful ones. However, you should always do due diligence. I would suggest you start by visiting the country first and making sure that you really want to retire here. It is a great place and the most people are very welcoming, however it is a different culture, thus you should make sure you like it (that said I'm sure you'll fall in love with it). Doug Harris's article shows one side of the equation. There are currently bills in congress about foreigners buying property along the border zones, but that doesn't mean that they will pass or that it will be impossible to buy, it simply means you may have to work with someone who knows how to make it work. Who ever said the things in life worth living were without difficulty. I know an American family who is living here and bought property near San Martin de los Andes and built upon it, so it's not impossible. Do not go by one persons negative experience.

I wrote an older post about buying land there but it's in Spanish, you might try using a web translator to get the gist of the article, it's quite interesting. About the patagonia questions, I came across these two webpages both unfortunately in Spanish, but explain what is happening in the frontier zones not just in Patagonia, but throughout the country.
http://www.clarin.com/suplementos/zona/2005/10/16/ z-03415.htm
Bill For Land Ownership By Foreigners

Also, before trying to buy there, I would suggest you talk to attorneys specialized in THAT area, as the rules are quite different outside of BA, but that topic has been discussed here numerous times before so I won't rehash it.

Also about the Spanish, I would suggest you learn as much as possible BEFORE coming here. Although the accent is different, the most important thing is to get a basic command of the language. I just did a couple of posts in my blog about learning Spanish here or outside of the country http://movingtoargentina.typepad.com/ . I learned outside the country and came here with a relatively clear accent (more Mexican than anything else) but have picked up just fine on the Argentine accent. I also found that outside of B.A. the accent is not the same as in the city.

Anyway, good luck with your decisions.
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Eric Baeder
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Username: Doggieboy

Post Number: 2
Registered: 7-2006
Posted on Thursday, July 20, 2006 - 5:31 pm:   Edit PostPrint Post

First, I'd like to thank those of you that took time to respond to my posting. Your comments seem reasonable. Have you folks been talking to my wife? She's the glass is half full type of our team. Maybe I should explain why the Bariloche area does make sense for us to consider, although my life story is boring. I like where I am presently living in Atlanta, but my wife and I would like to move back to the area that we both grew up, after we retire in about 15 years. It's a small town (50K) town in Wisconsin. It has two colleges and a state university and is a wonderful little town where we still have many friends and family. Wisconsin, is nice during the summer, but has very long and cold winters. The average temperature of my home town and Bariloche average within a degree F of each other, over the course of a year. Although Bariloche does not get nearly as cold, nor as hot as Wisconsin, which is good. I could rent out my furnished house to a professor or grad student 9 months of the year, while enjoying spring, fall and summer in Argentina. If I am still physically able, I would love to be able to ski a bit too.

Doug Harris ultimately decided to move to Chile and is living in a town of 1200 souls, which is not for me. It sounds like he is somewhat involved in real estate and therefore the new laws would have had a real impact on what he is doing. I on the other hand, am not brave enough to try to earn a living in another country. I would only need to have one successful real estate transaction. He is selling a book which is supposed to provide a lot of details about the new laws. I will probably spring for the $20 cost, as I am sure it has some information that would be good to know.

Roberto, to your point. I am not concerned about the Argentineans reaction to me as an outsider. In my limited travels, the locals have always been very nice and my wife is a natural ambassador. Of course, we haven not been to New York City or Philly. Some have suggested that Bariloche is too touristy. I consider that a bonus. The local economy is more dependent/tolerant of outsiders and perhaps more able/willing to assist in the language differences. I also like the idea of meeting people from all over the world.

You all bring up the language obstacle and that concerns me as well. Some people grasp languages better than others. I would place myself in the slow category in that regard. However, I have always wanted to learn another language and my wife has anxiously been looking for an opportunity as well. She took Spanish in HS & college. I would put her in the fast learner category. We have been getting some tapes, CDs etc. Some are good, some are terrible. I understand Berlitz is good, if the intent is to do more than just get by.

Although it would be great to spend a lot of time traveling to various countries to explore the possibilities. I am limited both in time and in funds. It would not be possible for me to spend 6 months in an area before buying some land, at this point in my life. I could do that after I retire, before building a home. We are planning a trip next year for our 25th anniversary. I want to do as much research as possible before we visit an area that we are considering. I agree there is no substitute for first hand knowledge with eyes and a mind that are open and with a willingness to check out the more mundane aspects of the area. Rick Steves recommends going to a local barber and getting a haircut (I assume English speaking) for input.The library as well as grocery, hardware, appliance, furniture and clothing stores are places that we would want to investigate, if after a few days we decided to pursue it further. I expect that tourist areas like Bariloche have higher prices with imported products to be pricy and local items to be less expensive. I have heard that prices are low in Argentina, but from what I have read, the prices for some items are low. Others not...and a lot can happen in 15 years.

Tom-thanks for the offer for the RE contacts. Should I decide to take a trip there, I might ask you for some contacts just before I go. I would not want to waste their time at this point, except to perhaps ask if my expectations are realistic.

I tried the link: www.clarin.com/suplementos/zona/2005/10/16/ z-03415.htm provided, but could not find the Patagonia topic, since I am Spanish challenged. Could someone advise as to what the thought process/reasoning was for the new law or why it was enacted? Thank you.
}
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Tom Woodson
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Username: Diverdown48

Post Number: 86
Registered: 6-2006


Posted on Thursday, July 20, 2006 - 6:58 pm:   Edit PostPrint Post

Hey Eric
So you are looking for summer n summer. That is smart in my humble opinion. I am not a cold weather person.
There is a very nice piece of property there in Bariloche. It is near the lake. What kind of money are you thinking about and what size property do you want. I am going down soon and would be happy to get you some more information.
Do you want a building site or something already built.
On the language side, you will pick it up and there are plenty of people who speak English, Estpecially in Bariloche I would think.

Hasta Luego
Tom
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Roberto
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Username: Admin

Post Number: 620
Registered: 12-2004
Posted on Thursday, July 20, 2006 - 7:06 pm:   Edit PostPrint Post

Eric, I think you have a nice project on hand... and feasible. Here is a link that may work better for that article. If you or your wife are still unable to understand it, it basically states that in the last 15 years foreigners have been able to acquire vast quantities of land that the gov. considers vital to our national security, whether because they are strategically placed (borders) or are the reservoirs of abundant natural resources.
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Roberto
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Username: Admin

Post Number: 635
Registered: 12-2004
Posted on Sunday, July 30, 2006 - 1:24 pm:   Edit PostPrint Post

Topic about transfering funds into Argentina was moved to Transfering money to Argentina
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craig shell
New member
Username: Craig

Post Number: 1
Registered: 8-2006
Posted on Wednesday, August 02, 2006 - 3:45 pm:   Edit PostPrint Post

I would like to compliment you on this forum, This is my first time posting here.Yesterday I spoke to HSBC new york office, international banking division. I was told I could open up a international dollar denominated account. Witch would allow me to deposit dollars in the USA
then withdraw dollars in Argentina with no charges.
To do this one would need to satisfy two Argentine banking requirements
1.) a CDI
2.) the account would need to active for one year prior to withdrawing funds in Argentina.
dos this sound plausible or am I missing something?
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craig shell
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Username: Craig

Post Number: 5
Registered: 8-2006
Posted on Thursday, August 03, 2006 - 2:18 am:   Edit PostPrint Post

I am confused I have herd on one hand it is no problem for foreigners to perches land in Argentina, but after reading Douglas Harris article posted by saint and hear things like" refused Title to an apartment he had bought several months before." and " Foreigners would be issued Titles to Real Property (any standing structure) WHEN they had 2 years of PERMANENT Residency." do these requirements only apply in Patagonia Security Zone or do they also apply in Buenos Aires province?
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movingtoargentina.typepad.com
Junior Member
Username: Sapphos

Post Number: 42
Registered: 2-2006
Posted on Thursday, August 03, 2006 - 8:57 am:   Edit PostPrint Post

Craig, the security zone, which exists in more than just Patagonia is a special thing. There are still a lot of rules being put in place - but the main problems are with buying lots within the security zone. If it's already developed it's much easier to buy. Now something new on the horizon is that Chile and Argentina have just created a huge bionacional reserve to protect 4.5 thousand hectares of land. In that are, which will encompass several of the national parks and will make some zones strictly for scientific research with buffer zones around. This will be similar to the reserve set in Guatemala. In my opinion this will be a great thing because it will protect the beauty and natural value of the area which is why we all want to buy there in the first place, but I wonder how it will play into undeveloped lots that are for sale.

In the provinces of BA it's much easier and there is a lot of land for sale.

It all depends upon what you're looking for ultimately.
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Tom Woodson
Member
Username: Diverdown48

Post Number: 100
Registered: 6-2006


Posted on Friday, August 04, 2006 - 12:02 pm:   Edit PostPrint Post

In Buenos Aires province it is fairly simple to buy property. The notary publics handle the legal work. It is a good idea anywhere in the world to have an attorney help you. No one wants to spend the money now and if diligent they may not have to pay them later.
A lot of people buy and sell land in Argentina. there are lots of bargains.
I know of several properties available through reputable brokers. Where are you looking to live. What are you looking for.
Let us know here and you can get advice from several sources.

I have come across some homesites on what I have been told is the largest lake in Argentina in Bariloche.

Good luck

I think this is my one hundreth post.
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craig shell
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Username: Craig

Post Number: 6
Registered: 8-2006
Posted on Sunday, August 06, 2006 - 3:53 pm:   Edit PostPrint Post

I have another question, when you decide to sale your real estate do you pay 21% vat then pay to covert from dollars to pesos to dollars to get your money out of the country?
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Apartmentsba.com
Member
Username: Saint

Post Number: 73
Registered: 5-2005


Posted on Sunday, August 06, 2006 - 4:55 pm:   Edit PostPrint Post

Craig,

No. You can find the detailed process to buy at www.apartmentsba.com/consulting It does an excellent job of explaining the process.

When you go to sell you have 0% capital gains tax as long as you bought as an individual. If you bought as a corporation you will have 35% capital gains taxes. There is a 1.5% transfer tax on the sale amount that you need to pay. The buyer gets to select the Escribano and pays most of the legal fees but the seller does still have a smaller amount usually less than u$s 500 in closing costs/legal fees. If you use a realtor you need to pay the normal 3% + 21% vat tax on the realtor's fee (example: you sell a $100,000 apartment and you have a realtor you would pay $3,630 to the realtor which is 3% + 21% vat tax on his/her fee).

It is MUCH easier moving money out of the country vs. moving it in. In fact, many exchange houses will do it almost free since they need dollars. AGain, just make sure you are using a VERY reputable one as you are giving them the cash and then they are wiring it abroad to your account. Or you can have the seller do a wire transfer to your bank abroad.

To recap the fees when selling:

- 1.5% transfer tax
- Smaller legal/closing fee usually less than u$s 500
- 3% + tax realtor's fee if you are using a realtor

Please keep in mind that as a foreigner with NO DNI you need a permit from AFIP (the tax office) to sell your property. You can't apply for the permit until you have a written offer on your property. They will make sure you are up to date on all your taxes before they will issue the permit to sell.

Good luck.
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craig shell
New member
Username: Craig

Post Number: 7
Registered: 8-2006
Posted on Tuesday, August 08, 2006 - 1:31 am:   Edit PostPrint Post

Do any of you have an idea what construction costs run per square meter
for a relatively nice house in the suburbs of BsAs?
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Tom Woodson
Intermediate Member
Username: Diverdown48

Post Number: 104
Registered: 6-2006


Posted on Wednesday, August 09, 2006 - 4:11 pm:   Edit PostPrint Post

Craig
I have heard 5 to 6 hundred US per square meter. I have a friend who is a builder. I will ask him next week when I see him. Right now I am traveling in Argentina and do not have access to the internet very often. Today is the first day in four days. I have been on a ranch that is deep in country. All the towns have internet access. I just don´t get to town much.
I am smiling here.

Maybe someone else can help on this subject also.
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Roberto
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Username: Admin

Post Number: 658
Registered: 12-2004
Posted on Monday, August 21, 2006 - 9:33 am:   Edit PostPrint Post

I moved buying blocks of apartments here.
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D MUNGAY
New member
Username: Crazygaucho

Post Number: 3
Registered: 7-2006
Posted on Monday, August 21, 2006 - 12:16 pm:   Edit PostPrint Post

great advice here!!!! as Always Roberto and now Saint doing a great job!I agree with Saint's quote
"The only thing certain about Argentina is that there is no certainty". but also we have to remember one of the main rules of economy greater risk greater returns and that's why many "capitales golondrinas" made a lot of many here even when the peso was peg to the dollar for many years getting above 20% returns ..... my humble honest opinion, Argentina it's a great country with a lot room to grow and if you want to invest here, you just must have the stomach for it, and if tomorrow everything goes sour again, just hold on to it and look at it as a better oportunity to buy everything on sale again, after all isn't that what we do when we buy other items anyway, just don't gamble with your "grocery money" and enjoy the ride ..... and another thing do your homework first about the 3 most important rules of Real Estate Location,Location and Location
best wishes to y'all
Dan
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Apartmentsba.com
Member
Username: Saint

Post Number: 92
Registered: 5-2005


Posted on Saturday, September 09, 2006 - 3:10 pm:   Edit PostPrint Post

As far as the cost to build it depends on how high end/quality of construction. You can get the price down to u$s 600 per sq. meter if you are using cheap materials. Typically good quality high end materials goes for about $800+ US per sq. meter with good finishes in the kitchen and bathrooms. (This is for Buenos Aires).

Keep in mind the cost of building varies depending on where you go in Argentina. In Bariloche it's more expensive than it is in Buenos Aires. The cost to build a nice house has increased over the years as inflation has kicked in. The cost when I looked into building a house a few months ago down there was about u$s 1,300 per sq. meter to build a nice house. Keep in mind the supplies/materials/labor costs keep going up.

Yes, as I mentioned before....things are constantly changing here in Argentina but if I had to invest in anything in Argentina it would be either "bricks" (apartments/houses) in good areas or land in good areas. As i mentioned before, investing in South America is not for everyone. If you have disposible income to purchase in cash and can withstand various economic cycles here and won't be affected then it may be for you. Lately there are a lot of people I'm hearing from via emails that want to get loans to purchase down here.

Dan is absolutely correct and something that I have pointed out several times....the 3 most important things in Real Estate is location, location and location. Good luck all.
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craig shell
New member
Username: Craig

Post Number: 13
Registered: 8-2006
Posted on Saturday, September 09, 2006 - 4:43 pm:   Edit PostPrint Post

I am interested in building a house in the pilar, opendoor area. lets see,
$800sqm is about $80 sqft.(1 square meters = 10.7639104 square feet)
so a 2500 sqft. house would run me about $200,000 for construction?
last year I have seen some fairly nice brick and block houses in gated polo clubs in that area for less than $200k and that is with the lot?
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Roberto
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Username: Admin

Post Number: 708
Registered: 12-2004
Posted on Monday, September 18, 2006 - 9:02 am:   Edit PostPrint Post

For information on property taxes in Argentina please follow the link.
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craig shell
New member
Username: Craig

Post Number: 15
Registered: 8-2006
Posted on Monday, September 18, 2006 - 10:48 pm:   Edit PostPrint Post

I was speaking to ARCA and they told me you do not need a DNI # to purchase real estate but you need a DNI# to sell you real estate ? Is this the case?
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A S
New member
Username: Nohotnocold

Post Number: 5
Registered: 7-2006
Posted on Monday, September 18, 2006 - 11:02 pm:   Edit PostPrint Post

In simple terms, can a foreigner get good title to property in the Bariloche area? I would assume the town area is different from outlying areas with respect to title issues?
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 102
Registered: 5-2005


Posted on Monday, September 18, 2006 - 11:04 pm:   Edit PostPrint Post

Craig,

No, that is NOT correct. You do NOT need a DNI to buy (only a CDI #) and you do NOT need a DNI to sell. However, as a foreigner, you need a permit from AFIP. They will verify that you have been paying your asset/property taxes on the property while you owned it and also will see if you have been renting it out and if so, if you have been paying rental taxes on the income (21%).

The permit process has been taking about 70 days so don't think that you can just flip and it's easy to sell. There are 26 AFIP offices. Some are very easy and some are VERY difficult. The AFIP office assigned depends on where your property is located. Keep in mind, you can't apply for the permit until you have a bonified written offer on the property you are trying to sell.

The answer is no, you don't need a DNI to sell it.
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craig shell
New member
Username: Craig

Post Number: 16
Registered: 8-2006
Posted on Tuesday, September 19, 2006 - 12:11 am:   Edit PostPrint Post

Thank you about that information on the DNI#
So if I want to sell at some time in the future, a potential buyer needs to hang around for 70 to 100 days wall the AFIP office gets its paper work together?
I am thinking will I need to wait that long when I buy?
At this time I am planing on buying in a gated community so I assume I will be dealing with a corporation.
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 103
Registered: 5-2005


Posted on Tuesday, September 19, 2006 - 8:12 am:   Edit PostPrint Post

You're welcome Craig.

If you sell in the future, and you don't have your DNI (residency) then you must wait to get the permit which takes 50-80 days normally. Faster if you have all your paperwork here. Keep in mind if you will be living here, you should apply for your DNI so you eventually have residency...that way when you go to sell, you can avoid these issues of the permit and the waiting period.

If you buy a property from a foreigner that needs to get the permit process taken care of then you must wait. It's a very frustrating process. If a corporation owns it you won't have problems purchasing it and won't have to wait. Don't assume just because you are buying in a gated community a foreigner owns it. The locals still own the majority of real estate here....even in the ultra posh locations. Foreigners probably account for no more than 25% of real estate in high end areas except in Puerto Madero where I would put the estimate higher than 60%.
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Riyad Anabtawi
Member
Username: Riyada

Post Number: 89
Registered: 12-2005
Posted on Tuesday, September 19, 2006 - 8:49 am:   Edit PostPrint Post

Saint.. One question: Why should it be easier to sell if you had a DNI as opposed to just the CDI? Is it because once you have the DNI it is assumed you are automatically checked out?
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Cynthia Edelberg
New member
Username: Morggan

Post Number: 19
Registered: 7-2006
Posted on Saturday, November 18, 2006 - 5:41 pm:   Edit PostPrint Post

Hello, it's been quite a long time since I posted here...
Still looking for an apartment to buy in Buenos Aires.
Anyone can give me a glimpse of what would be like to purchase in Barracas? There is a development I was offered, sort of lofts in an old wharehouse or cookie company (Canale).
Would be really greatful if someone can give me advice.
Is it a good neighborhood?
Better to invest somewhere else? Palermo soho? San Telmo?
Eager to hear your advice! Don't want to throw money down the drain! Thanks!
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 124
Registered: 5-2005


Posted on Sunday, November 19, 2006 - 10:17 am:   Edit PostPrint Post

Hi Riyad,

Because the CDI is just a tax ID number. Foreigners are the ones that get CDI numbers. A DNI number is when you actually get residency in Argentina. There is a big difference between having just a CDI number (Like Social security number) and residency.

I do think there is a minimum limit of having the DNI number before you don't need the AFIP permit to sell. I'll have to ask my Escribano. No, you aren't automatically checked out just because you have your DNI number. However, the government knows that you aren't just some foreigner that bought once you get your DNI number.

I'm not sure how difficult it used to be to get residency here for Americans but it was a lot of work when I did it. I had to provide a local police report record of the place I lived for the past 2 years in the USA, FBI report, local Argentina police report, my fingerprints, original birth certificate, detailed medical exam and blood testing, plus a mountain of paperwork.


Cynthia - Purchasing in Barracas all depends what your purpose of buying is. Buying it to live in is much different vs. buying it as an investment or to rent it out. First determine why you are buying it. Obviously it's probably an investment of some kind but determine exactly what you will do with it.

If it's strictly for capital appreciation then I do think values of real estate will rise there over the next several years. However, I feel there are better areas. The properties ARE cheaper there but I don't necessary think cheap property is the best investment. The 3 most important things in real estate are 1) location, 2) location and 3) location and Barracas doesn't have that.

If you are buying it with the hopes to rent it out to tourists which is a popular way to make cash flow with the real estate, you can forget about it being popular compared to other areas. It's simply too far out and people would rather stay in Recoleta, Palermo Soho/Viejo/Hollywood, Barrio Norte, etc.

You might want to think about Palermo Viejo which has a much better location, property is still affordable and it has great rental demand.

Best of luck to you.
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 125
Registered: 5-2005


Posted on Sunday, November 19, 2006 - 10:22 am:   Edit PostPrint Post

More articles on Buenos Aires real estate market

OVERSEAS PROPERTY – ARGENTINA
London Sunday Express – By Richard Webber
November 12, 2006

Although sunny stalwarts like Italy, France and Spain remain popular destinations when splashing out on a foreign retreat, increasingly adventurous investors are starting to broaden their horizons.

One country attracting interest is Argentina, the second largest country in South America. Real estate agents report an influx of enquiries from Brits wanting their slice of a diverse country whose 2400-mile length stretches from the sub-tropical north to sub-antarctic south, and boasts myriad landscapes, from the rugged Andes and immense eastern plains to the lakes and forests of Patagonia.

One of the world’s wealthiest countries at the turn of the century, such financial standing reflects in its strong infrastructure. Together with many European influences and properties selling for a song, Argentina has become an attractive proposition for would-be investors, says Dan Hathway, 36, who’s lived in San Rafael, in the western province of Mendoza, with his Argentinian wife, Laura, 33, and two young daughters, since 2004.

Dan’s company, Andino Properties, helps foreigners invest in Mendoza by sharing the knowledge gained buying three properties of his own, including an 84-acre farm, which he’s converting into a vineyard and olive grove, and a four-bed city house, costing £25,000 and now worth £65,000.

“Prices are cheap to the British, but for locals, with an average monthly wage of £150, they’re not, particularly as house sales are conducted in cash,” explains Dan. Although mortgages aren’t available for foreign buyers, they’re appearing for the indigenous population, but prohibitive terms, including interest rates up to 14 per cent, mean most people deal in cash. “Argentines view property like bank accounts, often substituting them due to the perceived lack of security of the banking system.”

Such absence of faith stems from a monumental currency collapse in 2001, when GDP fell nearly 11 per cent. Now, the economy is thriving again, despite climbing inflation and a need to curb corruption, thanks to a revival in exports and domestic demand.

Dan extols the country’s virtues, including spectacular scenery, a relaxed lifestyle and low cost of living. “£350 a month is sufficient for good living,” he says. But it’s the affordable property prices that attract most investors, with land available from as little as £400 an acre and properties from £10,000 in San Rafael.

Thanks to Andino Properties, Billy Buxton, 37, and his 28-year-old partner, Jenny Lowe, have secured a 20-acre plot near San Rafael for around £18,000. Taking a sabbatical from his UK job with a mental health charity, Billy and Jenny have just finished travelling the world.

Stopping off in Argentina, they were soon enamoured of San Rafael’s tree-lined avenues and friendly locals. “I was blown away by how friendly and welcoming the people were,” explains Billy, who admits the close proximity of the Andes and the feeling of spaciousness were also pluses. “We can reach the ski slopes within two hours. And wherever you are, you’re never far from such vast wilderness, which beats the crowdedness of the UK.”

They knew it was a country they could call home, and within five years intend to do just that. “We plan to build a farmhouse, plant a thousand trees and grow olives and other fruit organically.”

For those investors using their property as a holiday home, a growing tourism market and domestic demand is ensuring healthy rental yields. Six hundred miles away in the cosmopolitan capital, Buenos Aires, Kara Johnston Molina’s luxury three-bed apartment in the Recoleta district is on target to earn nearly £15,000 in rental income in just ten months.

Kara, 36, a United Nations’ political affairs officer based in Afghanistan, uses her apartment, which cost £97,000 in 2005, three times a year. “Buenos Aires is enormously rich in culture, comparable to Paris or Rome.” Says Kara, who advises potential investors to gain assistance from a reputable company, such as ApartmentsBA.com, who not only sourced her apartment but renovated it and manage its rental.

The company’s American president, Michael Koh, 33, who’s bought more real estate in the capital during the last two years than anyone else in the world, says: “There’s good potential for renting out to corporate visitors and tourists, creating a solid income stream. Most of my clients netted about 10 per cent last year on rentals alone, together with a 30 per cent capital appreciation on the value of their property.”

Michael adores Buenos Aires. “It’s a city with much energy and life. There are great restaurants, beautiful architecture, an excellent transport network, it’s safe and one of the cheapest cities in the world to live in.”

Michael rates Recoleta as the most upscale neighbourhood, but cites Palermo Solo, Viejo and Hollywood as up-and-coming districts. Prices have risen sharply in recent time and Michael expects the trend to continue, forecasting prices will double within six years. For bargain hunters, he suggests San Telmo. “The area isn’t as developed and you can pick up properties between £480-£640 per squared metre. Recently, I saw a lovely 90-year-old, 133 squared metre apartment for £67,000.”

Argentina, arguably the most advanced South American country, boasts more than its fair share of stunning scenery, typified by Bariloche, a principal Andean all-year resort in the Lake District region of Patagonia. With skiing in winter, sailing and trekking in summer, Maria Reynolds of Reynolds Propiedades compares it, geographically, to the lakes of northern Italy but “even more spectacular at a fraction of the price”. She enthuses: “It has incredible scenery, four full seasons, European architectural and culinary sensibility and every outdoor sport imaginable – it’s one of the last great places on the planet.”

For “luxury at a bargain price”, Maria refers to the Arelauquen Golf and Polo resort, a gated exclusive community just 15 minutes from downtown Bariloche, where a round of golf costs just £2 and homes start around £170,000. “Lakefront properties on Lake Nahuel Huapi, Guiterrez and Moreno start at around £100,000. They’re not easy to find but worth the effort because there is only so much lakefront like this in the world.”

Maria has noticed an increase in Brits buying second homes or uprooting permanently, to enjoy a high quality of life; and with property prices expected to grow, albeit at a slower pace than recent years, she expects more people to invest in the country’s real estate market. “With most people paying cash, it’s a stable market, more so than investments in the UK and US where people are heavily leveraged and prices and subject to variations in interest rates.”

Foreigners are, however, only permitted to buy property in this region in the border zones, which operate within approximately 65 miles from neighbouring countries, if it’s proved it will benefit the local community. “Usually, showing that one is going to invest money in building a house, using local labour and supplies, is sufficient,” explains Maria, who admits the drawn-out process can take up to a year.

But she’s convinced it’s worth the wait. “Many Brits are moving to Patagonia because it has a long history of immigration from Europe. They want to enjoy a high quality life at a fraction of the price of the UK.”

INFORMATION:

For Dan Hathway of Andino Property, visit www.andinoproperty.com or tel: 0054 26 2743 7811.

For Michael Koh of ApartmentsBA.com, visit www.apartmentsba.com or tel: 0054 11 5254 0100.

For Maria Reynolds of Reynolds Propiedades & Relocation, visit www.ArgentinaHomes.com or tel: 0054 11 4801 9291.

+++++++++++++++++++++++++++++++++++++++++++++++
S&P ugrades Argentina to B+ as debt decreases
Original article

Mon Oct 2, 2006

NEW YORK, Oct 2 (Reuters) - Standard & Poor's said on Monday it upgraded Argentina's credit ratings to reflect improvement in the countrys external liquidity and a decrease in its debt burden.

The ratings agency raised Argentina's long-term local and foreign currency ratings to "B+" from "B". The outlook on the ratings is stable. "Impressive current account and fiscal surpluses, combined with rapid and broad-based GDP growth in recent years, have strengthened the sovereign's financial profile," S&P said in a research note. "The threat of economic disruption caused by the acrimonious process of debt rescheduling has also abated."

Net external debt may decline toward 95 percent of current account receipts in 2006 from more than 120 percent in 2005. Total public sector debt may fall to less than 60 percent of GDP during the course of 2007 from nearly 80 percent in 2005.

S&P said creditworthiness could improve if Argentina manages to sustain GDP growth with stability, breaking with its record of volatile economic performance, as well as greater regulatory certainty.

Yet the agency warned that continuation, or deepening, of greater use of discretionary government intervention in markets as in recent years could hit investment over the long-term, constraining GDP growth and Argentina's sovereign rating. The stable outlook on Argentina is based on the expectation of favorable economic performance in 2006 and in 2007, with continued good GDP growth and fiscal and current account surpluses.

S&P also raised its foreign and local currency ratings on the city of Buenos Aires and the province of Mendoza to "B+" from "B". The outlook on Buenos Aires remains positive and the outlook on Mendoza is stable.

"The upgrades on Buenos Aires and Mendoza are due to the sovereign upgrade and based on the strong links between different levels of government in Argentina," said Standard & Poor's credit analyst Sebastian Briozzo.

++++++++++++++++++++++++++++++++++++
Chris Mayer – Daily Reckoning – UK
Original article
Wed 18 Oct, 2006
Don't cry for me, Argentina,
The truth is I never left you. - Evita

Buenos Aires, Argentina. Travellers sometimes call it "the Paris of South America," for good reasons, which I'll get to momentarily. More importantly for investors, though, it is also a place where prime waterfront real estate goes for prices only one-tenth of what comparable properties go for in Europe and the United States. There are reasons for that, too. But I'll make the case that they are not good reasons.

Argentine real estate may never trade on par with Europe or the United States. But if it is two-tenths as valuable, prices will double. Sounds like a fair bet to me. Especially since Argentina's real estate is practically bubble-proof at this stage.

Investing in Argentina's real estate: The 2001 meltdown

Investors who think about Argentina in their reflective moments perhaps recall the awful meltdown in 2001. If they had any money in Argentina back then, they probably recall the episode with a shiver and reach for the brandy.

The litany of woes was great. Bank accounts are frozen. The peso loses 75% of its value. The government defaults on its debt. The economy falls apart. Unemployment hits 25%. Violent protests in the streets. The stock market collapses. From 1998-2002, the Argentine economy actually shrank by about a fifth.

When the Argentines have a crisis, they don't mess around.

Emerging markets generally have a habit of melting down every once in a while. Just look at the roll call over the last dozen years or so: the Tequila Crisis (Mexico, 1994), the Asian Crisis in 1997, Turkey in 2000, Argentina in 2001 and Venezuela in 2002. And I'm probably forgetting somebody.

All in all, it was a tough stretch for emerging markets. Investors in these countries at these times stood about as much a chance as a toupee in gale-force winds. Consider that from 1994-2002, the MSCI emerging market index lost 60% of its value.

However, these markets also snap back famously. Last year, the MSCI index (a common benchmark for emerging markets) climbed back to its 1994 peak - and made back all those losses. Then, in May-June of this year, emerging markets as a group lost a quarter of their value in stunning fashion. It was a little reminder that stability and emerging markets are an unnatural pairing, like a courtship between a snake and an eagle.

Investing in Argentina's real estate: Since the crisis

Still, there are times to buy. With that thought in mind, let's take a look at Argentina four years after the crisis.

Argentina has always had a romantic quality to it. The eyes of travelers everywhere widen at the thought of those lush grasslands of the Pampas, the rolling plateaus of Patagonia, the rugged Andes Mountains in the west and Tierra del Fuego ("Land of Fire") at the southernmost tip.

Travelers also probably fondly recall Argentina's biggest city, Buenos Aires. With more than 11 million people, about one-third of all Argentines live in and around the city. Buenos Aires has its charms. One of them is being easy on the wallet, a fact that has attracted a growing expat community.

The European-flavoured architecture reflects the influences of its early settlers. There are wide avenues and plazas. You can wander down cobbled streets finding old-time cafes and world-class restaurants. Enjoy empanadas - small meat-filled dough pockets - which are a staple in the city. Be sure to visit one of the many local parillas (or grills) and you will find out why the Argentines consume more beef per head than any other country. Something about those free-ranging cattle on the fertile plains of the Pampas produces some of the world's tastiest beef. A good meal with wine and an unforgettable steak can cost less than a pair of movie tickets.

Argentina is also the eighth largest country in the world and the second largest in South America. Yet its economy ranks only 38th in size globally - behind countries such as Iran, Portugal and Greece. Somehow, it feels like it should be bigger.

It is also one of the world's fastest growing economies, and Buenos Aires is among the world's fastest growing cities. "Perhaps the most tangible sign of Argentina's economic recovery," The Wall Street Journal reports, "is its booming real estate market, which has transformed Buenos Aires, the capital, into a construction site." Though gauging economic growth is a tricky business, estimates peg Argentina's at around 8% annually.

The stock market has come back, and real estate has been a top performer. Those who survived the debacle in 2001-02 looked to real estate as a safe haven against further inflation. Then, too, foreign investors snapped up cheap real estate as easily as they downed those magnificent steaks.

According to an Argentine real estate trade group, Camara Inmobiliaria Argentina, housing prices have increased 50% since 2002. Even though real estate prices have soared, they still look surprisingly cheap.

Prices in prime real estate locations are only one-tenth of what they are in the United States and Europe. Puerto Madero is one such prime location. Restaurants and lofts converted from old warehouses now line the old port. It is a popular barrio, or neighbourhood, in Buenos Aires. There is also, as the Journal notes, "420 acres of undeveloped land within walking distance of the financial district, and an open view to Rio de la Plata, the wide estuary that separates Argentina and Uruguay."

This area is among the swankiest and most expensive in town. Prices go for $280 per square foot. For similarly located property in the United States or Europe, you could pay 10 times that. It's not surprising, then, that many buyers of cheap Argentine real estate are foreigners.

There are inconveniences. For one thing, Argentina's mortgage market is practically nonexistent. Real estate transactions are mainly in cash. That means meeting someplace secure and counting out piles of notes before pushing them across a table to the seller. Then, the other side recounts the money.

Therefore, easy credit and excessive leverage do not make up the foundations of the Argentine real estate boom. In other words, it's almost bubble-proof - though that could change at some point. The government is taking steps to encourage mortgages. But for now, it would seem Argentine real estate has a long way to go.

Argentina, because it is Argentina, may never command prices on par with Europe or the States, but if the discount goes from one-tenth the price to two-tenths the price - real estate prices will have doubled. That's a small step for a market that is only beginning to use housing loans and is only a few years from a major financial crisis.

Fortunately, there is an easy way to get Argentine real estate exposure in your portfolio. You only have to buy one stock and you get the full array of Argentine real estate - quality office properties in Buenos Aires, shopping centers, residential developments, luxury hotels and undeveloped land.

+++++++++++++++++++++++++++++++++
Back from the Brink
By: Pat Adams
Original article in members area

Global Traveler Magazine

August 2006



Having weathered the worst, Buenos Aires is back and business is good.

Looking at Buenos Aires from the window of a taxi on the world’s widest avenue — Avenida 9 de Julio — it’s all a bit difficult to believe. Just five years ago, Argentina’s economy collapsed, impoverishing more than half the population and leading to the largest loan default ($155 billion) in modern history. And yet, by appearances, the crisis has come and gone with hardly a trace.

Massive French-style mansions and soaring steeples, most built around the turn of the 20th century when Argentina was one of the richest countries in the world, overlook grand plazas and manicured greens. Stylishly coiffed, if conservatively dressed, executives chat on cell phones while sipping espressos in curbside cafes or feasting on succulent, homegrown steaks in smoky parillas; the air buzzing with Castellano (Argentina’s distinctive, slang-saturated version of Spanish).

The recession of the late 1990s and the devastating devaluation of the peso, from 1-to-1 with the U.S. dollar to 3-1, literally overnight, certainly have left their scars — both financial and emotional — as well as a lingering distrust of any advice originating in Washington. But if the crisis was crippling in a way few countries have ever known, the recovery has been equally impressive.

Since 2003, when populist president Nestor Kirchner took office, the economy has steamed ahead at an average clip of nearly 9 percent a year, far outpacing the rest of the region. And there’s little sign of any slowing; the International Monetary Fund projected growth of 7.6 percent for Argentina in 2006. Even neighboring Chile, the biggest economic success story in the Americas over the last two decades, can’t boast those numbers.

As China and India drive up demand for natural resources, Argentina, the world’s fifth-largest exporter of agricultural goods, is profiting as never before. Soy, meat, dairy, grain, tobacco, wool, and hide products from the lush Pampa Húmeda are delivered via highway to Buenos Aires, the nation’s capital and biggest city. Located on the Rio de La Plata (River of Silver), the country’s hub of commerce, industry, finance and culture is also one of the world’s busiest ports.

From its founding in 1588 by the gold-seeking Spaniard Pedro de Mendoza, Buenos Aires’ significance as a point of distribution, rather than any precious metal, has fueled its growth.

Long before declaring its independence in 1810, porteños (port dwellers), as the city’s inhabitants are known, defied Spain’s orders that all trade pass through Lima, Peru. A thriving industry in contraband smuggled into the “City of Fair Winds” laid the financial foundations for South America’s most developed country.

That may seem a tenuous title given the boom-bust cycle that has long characterized Argentina’s economy. But current trends, like a decreasing poverty rate, down 25 percent since 2002, and steadily shrinking unemployment, have given Argentines and outsiders alike reason to believe the best times are yet to come. Investment has more than doubled since the crisis, hitting $41 billion in 2005, or 24 percent of GDP; the automotive industry is bouncing back; and a construction boom — the sector expanded by 20.5 percent last year — is breathing new life into once-deserted areas of the capital.

Most remarkable of these rejuvenated spaces is Buenos Aires’ 47th barrio, Puerto Madero. Built in 1889, the port was abandoned soon thereafter, too small for the burgeoning maritime trade empire it was designed to serve. When that empire fizzled out, the port’s gutted, rat-infested warehouses came to reflect the dashed hopes of the nation itself. In 1989, however, with inflation at almost 200 percent, president Carlos Menem sold the land to a private consortium, sparking a process of development that eventually would render a new port with a new purpose.

Today, Puerto Madero embodies a resurgent, confident, and ever-modernizing Buenos Aires. High-end eateries and high-rise office buildings have filled the void, and an all-but-forgotten mound of rubble has become the most valuable residential real estate in Latin America (prices average $1,800 per square meter). Indeed, residential projects are driving the area’s rebirth, and chief among them is the Faena Hotel + Universe.



A luxury hotel and apartment building in one, the Faena is the brainchild of Argentine fashion designer-come-entrepreneur Alan Faena. Designed by French architect Phillipe Starck, it's the ultra-cool crash pad of Buenos Aires' international jet-set. And still it strives to preserve, as Faena puts it, "the essence of who we Argentines are." Housed in a historic brick grain silo, the hotel is just one of a series of restored buildings that make up Faena's grand plan: "El Porteño Art District." The objective, he said, is to "redefine the living experience by transforming an urban space into a center for the arts and creativity."

Still, the area's transformation hasn't been entirely urban or carefully planned. One of Buenos Aires' most attractive features is the Resérva Ecológica. During the military dictatorship that ruled Argentina between 1976 and 1983, authorities sought to build a satellite city across from the port. But after the military lost its grip on power, plans stalled and nature took its course. Today, joggers and bikers take to the 868-acre green space for fresh air, exercise or romantic strolls by the water.

The economic turnaround hasn't been without its problems. At 12 percent, inflation is a continuing concern. The government has resorted to controversial price freezes as well as a ban on meat exports. But prices keep creeping up. According to the president of the Central Bank of Argentina, Martín Redrado, that's natural for a rebounding economy. Unlike in years past, he said, Argentina's fiscal solvency and prudent monetary policy can keep it under control.

Buenos Aires is business-friendly, comfortable and connected. U.S. travelers don't need a visa to enter the country, and most porteños are glad to show off their English, which many, mostly younger people, speak quite well. There are 17 five-star hotels, endless options for fine dining, and cybercafes (or locutorios) all over the city. WiFi hotspots are increasingly common and cell phones are ubiquitous.

With its biggest fiscal surplus in 50 years, a trade surplus bolstered by Asian demand, tourism levels at historic highs, and consumer spending on the rise, Argentina is putting a painful past behind it - and Buenos Aires is leading the way.

+++++++++++++++++++++++++++++++++++++
Checking In With Michael Koh
Original article
President of ApartmentsBA.com

Before becoming one of Buenos Aires’ biggest names in real estate, Chicago native Michael Koh was co-owner of a healthcare coverage company in Dallas, Texas. “It was a great job, I was making plenty of money,” he recalled. “But I was seeing a lot of our clients pass away just three or four years into retirement. And it made me wonder — What if it were me? What if I had three years?”

The job changed Koh’s perspective. He decided he actually would live as though his doctor had told him he had only three years left. And because he could afford to do it, Koh began to travel. He started going to the places he’d always wanted to go, seeing and doing the things he’d only ever read about in magazines.

Buenos Aires had long been at the top of Koh’s list. “I loved the culture, the people, everything,” he said.

When he first arrived in 2002, Argentina was still reeling from a deep recession, and the government’s decision to devalue the peso that year led to a currency crash. In addition to losing fortunes in savings, many Argentines lost all trust in the banking system, the effects of which continue to play out today.

For a while, Koh was rotating between Buenos Aires’ luxury hotels, savoring his “last days.” But with expenses accumulating, he wondered if an apartment might be a better choice. So he went searching. It was an experience, he says, he would never want to repeat.

“It was a disaster. I got cheated.”

Eventually, Koh found an empty apartment, which he bought and furnished himself. In hopes of renting it out while away, he created a Web site called Apartments BA.

“All of a sudden, there was a lot of demand for it,” he recalled.“And I thought,‘Wow, there’s a business here.’ ”

Six weeks later, Koh was subletting three more apartments and drafting a business plan to compete with the five-star hotels blocks away. Starting out as a consultant to prospective buyers, Koh quickly gained a reputation for knowing the intricacies of the Buenos Aires real-estate market. His venture capital investment company, Koh Inversiones, which buys high-end property for foreign clients and then rents them to tourists, opened for business later that year.

“I haven’t met about 30 percent of my clients,” he said. “They hire me over the Internet or through a referral from a friend. Trust is key.”

Many of Koh’s clients haven’t ever seen their properties. “This is just an investment for them,” he said.

So far, it’s been a very good one. Koh said last year his investors enjoyed a rise in property values of 25 percent, and made 10 percent on rental income. What’s the outlook for 2006?

“Strong,” he said.Tourism is at an all-time high — it’s now the country’s third-biggest source of income — and real estate is one of the safest investments in the city. “You have to remember that ever since the crisis, locals don’t put their money in the bank. They buy property. And now you have foreigners discovering what a great place this is.”

“Older folks, especially,” he added. “They love it.”

If it was the thought of growing old and dying in Dallas that moved Koh to travel to Buenos Aires in the first place, it’s the sight of retirees enjoying their lives here that makes him marvel at his new home.

“I’ve been all over the world,” Koh said, “This is one of the only cities where you can go and see senior citizens drinking espressos at three in the morning. Buenos Aires has something for everybody. And it never even snows.”

++++++++++++++++++++++++++++++
THE WALL STREET JOURNAL
Argentina Real Estate Booming, And Nearly Bubble Free
Original article
September 7, 2006
By Serena Saitto

BUENOS AIRES (Dow Jones)--Perhaps the most tangible sign of Argentina's economic recovery is its booming real estate market, which has transformed Buenos Aires, the capital, into an open-air construction site.

In July, Argentina's construction activity grew at a record annual rate of 27.9%, making the industry a major driver of the extended economic rebound after the 2001-2002 economic bust. Economic growth for 2006 is expected to exceed 8% for the fourth consecutive year. And yet the risk of a housing slowdown, such as that currently sparking fears in the U.S. of deteriorating credit quality, is muted here. The reason is that there is virtually no mortgage market behind the property boom.

"Most of our sales happen in cash," says Marcelo Cusmai, the partner of Dypsa International, a real estate company developing three towers in Buenos Aires' former port, Puerto Madero. Cusmai's comments can be taken quite literally. Typically, a home purchase is settled in a secured location, where the buying party will count through stacks of hundred dollar notes before pushing them across the table to have the other side recount them. This seemingly archaic system does not seem to be reflected in the many ambitious property developments seen around Buenos Aires.

The Puerto Madero area is a case in point. It is being renovated along the model of other major port developments, such as the Docklands in London, and is becoming one of the hottest zones in this metropolis of 13 million. It boasts 170 hectares of underdeveloped land in walking distance from the financial district and an open view to the Rio de la Plata, the wide river that separates Argentina and Uruguay.

Philippe Stark's award winning design of the Puerto Madero's Faena Hotel certified the area as the most hip and expensive in town, selling at about $3,000 per square meter. Still, this price looks like a bargain for buyers from the U.S. and Europe, where per-meter price-tags can run as high as EUR20,000 ($15,600). "Fifty percent of our buyers are foreigners attracted by the projected 10% annual return of this investment and by the beauty of the project," said Cusmai.

The rush to buy properties started in 2002, just after Argentina defaulted on its debt. At that time, those who had escaped the meltdown of Argentina's banking system bought into real estate, which suddenly looked like the safest investment.

The trend has continued ever since. That's mostly because the rest of the world has also continued with its housing boom, keeping Argentina's properties comparatively cheap even as they have grown by an average of 50% since 2002, according to Argentina's Real Estate Chamber.

Federico Weil, the founder of TGLT Real Estate, also ruled out a credit bubble risk in Argentina, noting that all of his $100 million investment group's transactions are in cash. "The dynamic of a bubble has a lot to do with the market's leverage; where there's no debt, there's no exposure to interest rate movements," says Weil, 33, who is a Wharton MBA graduate. Like Cusmai and other real estate developers, Weil - who projects a 50% annual return for his real estate investments - sees property demand running upward thanks also to measures that the Argentine government is trying to implement to boost the mortgage market.

In an effort to transform tenants into home owners the administration of President Nestor Kirchner wants stamped into law recent measures that extend the maximum term for mortgage loans to 30 years from 20 years and halve interest rates to 7.5%.

Bankers still doubt the feasibility of these measures without government subsidies.

Some worry about political resistance to home foreclosures, which has made debt collection difficult. Others note that the existing payment system, in which the legally declared value is often fixed lower than the actual transaction price to facilitate tax avoidance, creates inconsistent title deeds. That, in turn, inhibits the creation of a mortgage-backed securities market into which banks could offload risk and obtain fresh liquidity for new lending.

Even so, economists and other industry representatives believe that the mere prospect of opening up the market to those who don't currently have the cash to operate in it creates the promise of continued growth. They also believe that the cash factor eases the bubble risk, but they are cautious not to rule it out. "It's true the bubble scenario in Argentina is very unlikely because the market's leverage here is very low; this risk exists when people are forced to sell assets to repay debts especially when interest rates start increasing like in the U.S.," said Esteban Fernandez Medrano, an economist with local research company Macrovision.

However, he didn't exclude the possibility that a financial crisis, even one imported from abroad, could depress property prices or put rent payments at risk.

"Even though Argentina is far from the U.S., there's a relative effect of what happens in the rest of the world, given that foreign buyers are coming to Argentina," he said. Nonetheless, he predicted that this relationship will continue to be a positive one and that the real estate market will keep its upward trend, based on projected economic growth.

Moreover, Nestor Walenten, secretary of Argentina's Real Estate Chamber, distinguished between the construction industry and the real estate market.

"Construction is booming and the industry's activity is 10% above levels seen in the late 1990s before of the crisis, whereas the existing housing's market is still down by 15% to 20% compared to those years," said Walenten, who also runs a real estate business.

Yet Walenten reckoned that real estate prices have peaked, hitting a point "where they are going to stay in the medium term, unless the government is seriously able to implement the credit-boosting measures it just approved."

+++++++++++++++++++++++++++++
Buenos Aires enjoys property boom
Original article at: http://www.guardian.co.uk/argentina/story/0,,1834894,00.html

Argentina is climbing out of its economic crisis by tempting foreigners to buy homes in its capital, writes Oliver Balch

Tuesday August 1, 2006
Guardian Unlimited

Recycled, New York-style loft apartment. En-suite bedroom, plus spacious roof terrace. Located in the heart of one of the world's most exotic capital cities. Price tag? Roughly the same as a private parking space in central London.

It is little wonder that foreigners are flocking to Buenos Aires to snap up the city's property bargains. The most exclusive districts of the Argentine capital average between £1,000 and £1,600 per square metre.

By comparison to other major world cities, it's a steal. A central apartment in Moscow will set you back around £2,700 per square metre. For London, prospective buyers are looking at closer to £3,580.

"Foreigners look around and they are thrilled with the idea of what they can get for their money," says Cecilia Campbell of Buenos Aires-based estate agents, Reynolds Properties.

Dan Perlman, a professional chef from the US, is one of those recently lured onto the Buenos Aires' property ladder. Having sold his apartment in New York, he originally came to spend a few months just to get to know the city.

"I found that I really liked it here," says Mr Perlman, the new owner of a spacious apartment in Buenos Aires' Recoleta neighbourhood.

Recoleta's Parisian architecture and famous cafés make it one of the most popular buys for foreigners. Other classic favourites include the downtown district of Barrio Norte and the refurbished port area of Puerto Madero.

Property prices have been rising steadily over the last few years, as Argentina begins to climb out of a major economic crisis in 2001-2002. House prices in the Buenos Aires' wealthier districts shot up as much as 25% last year.

The market is showing signs of stabilising now. All the same, investors in buy-to-rent properties can still expect rental income worth 4%-6% of the original sale price.

But the big gains are to be made in the city's less traditional areas, says Argentine independent property agent, Maria Garvey: "There are still plenty of great opportunities for investors ready to take a risk with more up-and-coming neighbourhoods."

"Lots of foreigners, for example, are interested in purchasing in off-beat districts like San Telmo and Barracas, where there are still some real bargains. Right now, Palermo Viejo is the really hot place to buy." Once home to writer Luis Borges, Palermo Viejo's bohemian feel has given way to a seriously trendy vibe in recent years. Its cobbled streets are now awash with fashionable boutiques, ultra-cool bars and multiple 'for-sale' signs.

Palermo Viejo's cachet is most evident in the desperate rebranding attempts of its estate agents. Potential buyers now have to negotiate the subtle differences between Palermo Soho, Palermo Hollywood and, the latest, Palermo Queens.

American-born Jennifer Juhasz, owner of a film production company, bought a £97,000 property in the area early last year. When she came to sell in May, she faced a "bidding war". The two-bedroom house eventually went to a Canadian investor for £160,000.

Foreigners are now responsible for almost one in three sales in these and other sought-after post codes. Britons and Americans make up the largest proportion of buyers, followed by the French and Spanish.

But Buenos Aires' property boom comes at a cost. Property values, as with everything else, dropped like a stone in the wake of Argentina's crippling devaluation almost five years ago. Saddled with spiralling personal debts and unmanageable dollar mortgages, many home-owners had to put their main asset up for sale.

Meanwhile, the foreign money flowing into Buenos Aires' housing market has helped property values rebound to almost pre-crisis levels, particularly at the top-end of the market. As a consequence, many Argentines are now finding themselves squeezed out of the property market altogether.

Magdalene Morales, aged 26, blames the continued valuation of houses in US dollars as the major barrier to getting on the property ladder. Following a pre-crisis parity with the peso, the US dollar is now valued at more than three times its Argentine equivalent.

"The high price of property makes it impossible for young people who are just getting started and dream of getting their own house," she complains.

The problem can be seen most clearly in the rental market, she insists: "The steady stream of foreigners has provoked a boom in short and long-term rents. Many property owners only rent to foreigners because that way they can get a much higher price".

Like many people her age, Ms Morales continues to live at home with her parents.

An additional difficulty facing Argentine house-buyers is the lack of affordable credit. Most mainstream banks do offer mortgage services, but few are tempted by the astronomical repayment rates.

But not everyone points the finger at foreigner investors. Wealthy Argentines, who either avoided the economic crash or have prospered during the country's gradual recovery, are also ploughing money into the housing market.

As 35 year-old Cristián Santillan, a salesman with a pharmaceutical company and recent first-time buyer, puts it: "After the 2001 crisis, Argentines no longer trust the banks. They prefer to put their money into property because they see bricks and mortar as being more secure."

Oliver Balch is a Buenos Aires-based journalist specializing in sustainable development and Latin American affairs.

(Message edited by admin on November 21, 2006)
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Tom
Advanced Member
Username: Diverdown48

Post Number: 285
Registered: 6-2006


Posted on Monday, November 20, 2006 - 1:35 pm:   Edit PostPrint Post

AptsBA, do you have web addresses for the articles you posted?
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 127
Registered: 5-2005


Posted on Monday, November 20, 2006 - 4:12 pm:   Edit PostPrint Post

Tom,

I have them posted at www.apartmentsba.com/media

Do a Google.com search for each individual publication and I'm sure you can find the original links to each newspaper or magazines story. Good luck.
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Tom
Advanced Member
Username: Diverdown48

Post Number: 286
Registered: 6-2006


Posted on Tuesday, November 21, 2006 - 9:24 am:   Edit PostPrint Post

Thanks AptsBa
A humble suggestion. In the future give the web page. Since you are copying from the web page anyway it is simple to supply the source and gives a direct correction to the reference page.

It avoids confusion and complies with most copyright requirements. I think I read it in the usage agreement on this site as well.

thanks
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Roberto
Board Administrator
Username: Admin

Post Number: 868
Registered: 12-2004
Posted on Tuesday, November 21, 2006 - 9:18 pm:   Edit PostPrint Post

Tom, perhaps Michael didn't want to because of restrictions I placed in the past about dropping links... However, yours is a good suggestion so I went ahead and tried to link to the original article to the best of my abilities. WSJ has them behind their members' area while others use URLs that are unlinkable through this forum.

(Message edited by admin on November 21, 2006)
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 128
Registered: 5-2005


Posted on Wednesday, November 22, 2006 - 12:13 am:   Edit PostPrint Post

Thanks Roberto. Yes, as usual you are right on target. I've tried to link before in the past with problems dropping links so I just posted. Also, as you mentioned, some of the articles are membership only now so you have to pay to see it.

Thanks for taking the time to link to most of them. All of them are fairly interesting and those that own real estate here or thinking about it will find them quite useful. Cheers.
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Cynthia Edelberg
New member
Username: Morggan

Post Number: 20
Registered: 7-2006
Posted on Thursday, November 23, 2006 - 5:01 pm:   Edit PostPrint Post

Hello,
Although I didn't get any reply from my previous question, I'm sure someone here will be able to give me some advice on this. I'm considering a couple of apartments/houses nearby Parque Lezama.
Could any of you give me a glimpse of what is it to live there for a 50-something woman? Is it safe? How much/less safer than living in, let's say, Recoleta? That's my main concern.
Is it Parque Lezama as desirable as San Telmo?
The area I'm looking now goes from Montes de Oca to Irala streets, right across Lezama Park, backing San Telmo towards South.
Happy Thanksgiving day
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Roberto
Board Administrator
Username: Admin

Post Number: 873
Registered: 12-2004
Posted on Thursday, November 23, 2006 - 7:02 pm:   Edit PostPrint Post

Cynthia, things may have changed because of the development in Puerto Madero and costanera sur but in the past this wasn't a safe area. Your location is south of the park, mmmh... I wonder if anyone has visited the area recently.
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Carmen Stigliano
New member
Username: Carmen

Post Number: 16
Registered: 9-2005
Posted on Thursday, November 23, 2006 - 8:12 pm:   Edit PostPrint Post

Dear Cynthia,

Reading your posts regarding buying property in San Telmo, Parque Lezama and Constitucion zone and considering living there I have a question in my mind:

Have you ever visited this areas during the day, night, working days and holidays winter spring summer and fall? or are you willing to purchase property without knowing the area? Because in these neighbourhoods one block could be OK and the next one could be hell.


All the best,
Carmen
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Cynthia Edelberg
New member
Username: Morggan

Post Number: 21
Registered: 7-2006
Posted on Wednesday, November 29, 2006 - 10:26 pm:   Edit PostPrint Post

Carmen,
Sorry I was traveling and couldn't get back to you. I appreciate your advice and I guess it's the right thing to do. I'm planning to go to Buenos Aires in a couple of months and will see by myself. However, I also appreciate the advice of locals, one thing is what I see and another thing is the voice of experience.
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AMARAGGI
New member
Username: Amar

Post Number: 1
Registered: 12-2006
Posted on Wednesday, December 27, 2006 - 5:12 pm:   Edit PostPrint Post

hello,

I just discovered this forum which provides many answers to questions I had before moving to BA to buy (if possible) an appartment. Could anyone tell me if there is a good chance to secure a deal with a Senna since I am quite reluctant to travel with a lot of money?
Something seems also curious in this quite interesting market, it is the apparent absence of international real estate agent who could operate following international standard.
If I understand correctly, I will have to hire a realtor e.g. in Palermo who will make the research not only there but also in Recoleta or elsewhere far from his usual business area?
Thank you for your advise.
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Roberto
Board Administrator
Username: Admin

Post Number: 913
Registered: 12-2004
Posted on Thursday, December 28, 2006 - 12:42 pm:   Edit PostPrint Post

Many here will have better answers... my opinion is that neighbor realtors will know specifically about their own area but just like in any other city, some agencies may have many branches that allow them to expand their listings.

Could you tell us what those intl. real estate standards would be? And what is a Senna? From past threads, you don't need to travel with a lot of money as there have been examples of posters who successfully wired final payments, in many cases large sums.
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Robbie
New member
Username: Ganavan

Post Number: 10
Registered: 8-2006
Posted on Friday, January 05, 2007 - 1:42 pm:   Edit PostPrint Post

The reason why the prices of flats are going up is obviously due to demand. But why is demand increasing? I suspect it is the gradual devaluation of the greenback and grim prospects for the future in the USA and dollar dominated zones.

See: http://www.financialsense.com/editorials/petrov/2006/0120.html

(Message edited by admin on January 05, 2007)
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Simon Fawkes
New member
Username: Expatba

Post Number: 2
Registered: 1-2007
Posted on Tuesday, January 30, 2007 - 2:38 pm:   Edit PostPrint Post

Some of you may be interested to know that my book "The Complete Guide To Real Estate Investment In Argentina" has just been published (ISBN 1430303980). It explains everything you need to know about buying and investing in Argentinean real estate, but focuses predominantly on the capital and includes a discussion of the main neighborhoods and districts of interest to the investor.

Full details can be found at: http://www.amazon.com/exec/obidos/ASIN/1430303980
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Roberto
Board Administrator
Username: Admin

Post Number: 1011
Registered: 12-2004
Posted on Sunday, February 25, 2007 - 1:22 pm:   Edit PostPrint Post

The discussion about best places to buy a second home in Argentina and related has been moved here
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Arial
Member
Username: Arial

Post Number: 56
Registered: 10-2006
Posted on Sunday, February 25, 2007 - 6:57 pm:   Edit PostPrint Post

That is SO funny that you couldn't guarantee it with your own real estate! Hahahahahahahaha Thanks for the good advice. Arial
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 140
Registered: 5-2005


Posted on Sunday, February 25, 2007 - 7:53 pm:   Edit PostPrint Post

Hi Arial,

This is what these boards are all about. Helping share information freely with one another. Yes, you would be surprised at how they don't trust one another here in Argentina. When I did my lease (it was a two year lease), the real estate company and the owner knew full well that they wouldn't have any problems with me. I own many properties and even offered to use 2 of my properties to guarantee my lease. I offered to prepay a year as well. That didn't help. It is an expensive property so they did make me get a guarantor. I hated asking a friend to do this but I could NOT use my own properties so keep this in mind.
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 153
Registered: 5-2005


Posted on Wednesday, March 14, 2007 - 9:43 am:   Edit PostPrint Post

Gee, yet another prediction that I made quite a few years ago that is coming true. I've been saying for years that it was too easy for people to get mortgages that they couldn't afford in the USA. I predicted that the "house of cards" was eventually going to fall. Most people don't understand their ARM (adjustible rate mortgages) they were talked into getting. I predicted that interest rates go up another 1% and people couldn't make their mortgage payments. Many other investors got all interest loans to purchase investment properties that are going to experience problems now.

The banking and credit system as a whole are getting rid of these high risk loans which probably accounts for as much as 15% or higher of the buying in the USA. Take out 15% or more of the active buying going on in the USA and see what will happen to property prices there. It will effect demand. Expect further declines and more foreclosures.

I've said it before and I'll say it again. At least in Argentina all these people bought with 100% cash. Big difference with the situation in the USA and UK and other places around the world where any one with a heart beat can get a loan (sometimes for up to 100% of the value of the property). ...... Good luck all.

http://news.yahoo.com/s/nm/20070314/bs_nm/markets_ global_dc_7


PS -- Keep in mind there are about 1 MILLION houses right now in the USA in foreclosure right now and that # is sure to grow. Sad.
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 154
Registered: 5-2005


Posted on Wednesday, March 14, 2007 - 7:09 pm:   Edit PostPrint Post

In case the Link doesn't work here is the story below and I suspect you will be seeing a LOT more about this in the news in the next few months.


U.S. home loan fears spark renewed stocks slide

By Lincoln Feast



March 14, 2007



Reuters

Global stocks tumbled on Wednesday as fears about the impact of U.S. home owners falling behind with mortgage payments hit financial shares, prompting money to flow into safe-haven government bonds.

By 1138 GMT, the pan-European FTSEurofirst 300 index (^FTEU3 - news) was down 27 points, or 1.8 percent, at 1,439 points, within striking distance of year's low of 1,428.2, hit earlier this month.

"This seems to be the second leg of the global fall in equities and there is very little impetus to jump in and buy," said one trader. "It's time to fasten seat belts."

U.S. stock futures were pointing to a lower start on Wall Street, extending Tuesday's 2 percent slide driven by falling financial stocks and weaker-than-expected U.S. retail sales.

Lenders in the United States launched foreclosure actions against more than one in every 200 U.S. mortgage borrowers in the fourth quarter of 2006, the biggest share of homes facing the start of the repossession process on record.

Asian stocks also crumbled after a 2 percent fall on Wall Street overnight, which was rattled by weaker-than-expected U.S. retail sales and falling financial stocks.

Tokyo's Nikkei (^N225 - news) fell 2.9 percent, its second biggest daily percentage fall this year, pulled down by the U.S. fall and strength in the yen. MSCI's index of Asian stocks excluding Japan (^MSCIAPJ - news) fell 2.6 percent.

"If the U.S. subprime mortgage problems get worse, it could begin to hurt U.S. consumers, and that would be very hurtful for exporters," said Kim Yung-min, a fund manager at SH Asset Management in Seoul. "This month could be very bad."

Investors fear troubles in the U.S. subprime market, which deals in loans to people with poor credit histories, will spread to the wider economy.

YEN GAINS AS CARRY UNWINDS

The sharp retreat echoed the slide in equity markets two weeks ago but moves in currency and emerging markets were more muted.

The yen retained a firm bias as investors cut back carry trades, where they had borrowed the low-yielding yen to buy riskier assets.

"The market is likely to tread very cautiously," said Kamal Sharma, currency strategist at Bank of America. "With a renewed bout of risk aversion the likes of the yen and Swiss franc are likely to be in the ascendancy for the time being."

The dollar was steady around 116.25 yen after falling on Tuesday while the euro was 0.1 percent weaker at 153.30 yen. Higher yielding sterling was off 0.3 percent at 223.70 yen.

Government bonds rallied as stocks fell and risk appetite faded.

"People are flapping about the subprime market but it was not helped by Countrywide Financial, one of the biggest quality lenders above subprime status, saying we have a credit crunch," said a bond trader in London.

Countrywide Financial Corp. (NYSE:CFC - news), the largest U.S. mortgage lender, told its brokers last week to stop offering borrowers the option of no-money-down home loans, according to a document obtained by Reuters.

The June Bund future was up 30 ticks at 116.58.

The two-year Bund yield was down 1.2 basis points at 3.887 percent and the benchmark 10-year yield was down 0.7 basis points at 3.88 percent, having fallen to a new low for the year of 3.87 percent.

Corporate debt markets reacted to the slide in equities but moves were largely contained.

The iTraxx Crossover index, a key marker of sentiment for riskier credit in Europe, widening 10 basis points to 238 basis points above government bonds. The index has widened almost 40 basis points in the past two days.

Commodity prices were mostly lower, with gold down around 1 percent to a one-week low and copper under pressure.

U.S. light crude oil rebounded above $58 a barrel after a sharp fall the previous session and ahead of data expected to show a fall in U.S. fuel inventories.
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Simon Fawkes
New member
Username: Expatba

Post Number: 14
Registered: 1-2007


Posted on Friday, March 16, 2007 - 7:03 am:   Edit PostPrint Post

I fear something similar is about to happen in the UK. In recent years rocketing property prices have made it hard for most people to be able to afford to buy property, so the mortgage companies have been falling over themselves to find new ways to keep business coming in. They are now offering mortgages of up to 8 times salary, mortgages where proof of income is not required, and 100% buy-to-let mortgages where the rental income doesn't even have to cover the mortgage payments. This availability of easy credit has helped fuel property price rises even further.

But cracks are now beginning to show, and it appears that too many people have overstretched themselves severely and are struggling to meet their mortgage repayments. It will probably only take a further hike in interest rates for the trickle of defaults to turn into a stream and the UK will be in a similar situation to the US.

Mike is right. Because property in Argentina is almost 100% bought for cash the prices haven't been hyper-inflated by the availability of easy credit and excessive leverage. This means the property market here is much more stable and makes it far more bubble-proof.

Simon Fawkes
Author, The Complete Guide To Real Estate Investment in Argentina, ISBN 1430303980, http://www.amazon.com/exec/obidos/ASIN/1430303980
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 155
Registered: 5-2005


Posted on Friday, March 16, 2007 - 8:20 am:   Edit PostPrint Post

Simon,

You are totally right. I have MANY clients from the UK with more now contacting me. In fact, I'd say 6 out of my last 10 new clients are all from the UK with more email requests from the UK now than from the USA. Most of my clients from the UK sold expensive properties there to buy here in Buenos Aires.

It's simply too easy to get a mortgage or loan in the USA and UK. The USA will get rid of these sub-prime loans now. I assume the UK will eventually get rid of them as well once they see people starting to have problems. That will take a big bite out of the housing boom there, IMHO.

It hurts paying 100% in cash here in Argentina. Not being able to leverage. In the USA, I could take 1 apartment I own and buy 6 more with the equity and get credit. Here in Argentina I couldn't. I paid cash (just like all my clients and the locals) so if there is some economic problem or interests go up, it doesn't affect me. I do consider it more "bubble-proof" here as I've mentioned several times.

Just imagine what will happen to prices in Buenos Aires once more mainstream credit and financing comes into play here. (Kirschner is trying to pass legislation now). Demand will skyrocket and prices in turn will go up. These prices now will be very cheap compared to what happens to prices then. It's the same the world over when financing and credits and mortgages come into the picture.

Those that invested here will be happy they did, IMHO.

Best of luck to all.
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 156
Registered: 5-2005


Posted on Friday, March 16, 2007 - 4:53 pm:   Edit PostPrint Post

Read this Reuters story that came out today. Basically this is what I said was going to happen. I've mentioned over the past few years (and I believe I've posted it on this forum as well as other public messages boards) that most people didn't understand their ARM's (adjustible rate mortgages). They just signed at the end of the loan agreement without even reading it. You are going to see MANY of the same type of stories below.

In this story below they are sueing their credit lender but THEY are to blame for not understanding what they were getting themselves into. Agreeing to make payments when you simply can't afford them is irresponsible. In the end, they will probably still lose their house.

Before, anyone posts that this has nothing to do with Argentina real estate. I post it because it's VERY important to understand the dynamics of buying here and to note it's basically 100% CASH (literally with cash being paid over the table). I post these kind of things so you can understand the difference and how property prices are insulated to an extent because it's all cash buying here from serious investors NOT gamblers.

The sad thing is that I foresee a lot of problems for the USA economy in the future. The government is simply spending money it does NOT have with many things (especially the situation in Iraq). Much like these people in these stories...eventually there is a price to pay for spending money you don't have...

March 16, 2007


BOSTON (Reuters) - The home loan for Thomas Hilchey and fiancee Robin Crevier started with a "teaser" -- an attractive interest rate for two years with a monthly payment of $1,692 that was well within their budget.

The middle-class couple from Harwich, a village on Cape Cod in Massachusetts, were confident they could keep up with the adjustable-rate mortgage payments to refinance their home and signed papers with subprime lender Ameriquest Mortgage Co.

What happened next swept them into the property foreclosure wave spreading across the United States and sparked one of a growing number of legal fights against lenders such as Ameriquest that specialize in loans to higher-risk borrowers.

When U.S. interest rates rose in 2005, the couple's 5.75 percent mortgage rate swelled to 7.75 percent and monthly payments ballooned to $2,035.

The rate was set to jump to 9.75 percent on March 1, bumping payments up to about $2,750, a threshold that would have pushed them into foreclosure.

But Hilchey and Crevier fought back.

Accusing Ameriquest of deceit and negligent misrepresentation, among other charges, the couple sued the lender, saying its salesman failed to provide documents and disclosures on the loan required by state and federal law.

Across the nation, anger and litigation are growing against the tactics of subprime lenders, who offer easy credit for homes that are turning out to be too expensive for millions of Americans now that mortgage rates are going up.

"If you go in and apply for a mortgage and get approved at 5.75 percent, how many people two years later are going to qualify for the same loan at 9.75 percent? Probably no one, unless you are extremely wealthy," said Bruce Bierhans, an lawyer representing Hilchey and Crevier.

The couple won a first round this month when a Massachusetts judge ordered Ameriquest to halt a $715 monthly increase kicking in from their March payment and refrain from repossessing their property until the lawsuit is resolved.

"I would expect more lawsuits like this," said Boston University law professor Tamar Frankel.

"People are going to lose their homes. Are they going to fight? Yes. Are there going to be lawyers who will help them fight? Sure. The question is going to be: Where will the courts draw the line?"

FIGHTS HARD TO WIN

But such battles are notoriously hard to win, legal experts say, and the odds are stacked in the lenders' favor.

"What happens most of the time is that people are just lied to," said Jordan Ash, director of the Acorn Financial Justice Center advocacy group in St. Paul, Minnesota. "But if the documents are in order and their signature is on all the papers, there really aren't many ways to fight back."

Mary Beyer, a 52-year-old divorced mother of four from Jenison, Michigan, said she was misled while refinancing her home with a subprime loan she could not afford.

The loan salesman, she said, listed her as employed on the application even though she told him she was out of work and surviving on Social Security payments of just $643 a month.

Beyer, who suffers from chronic asthma and receives disability payments, admits she did not read all of the fine print but said she was desperate for the loan after running out of money to pay her electricity bill.

This month, she was told her home of 20 years would be repossessed.

"I was too trusting when they said I could do this loan," she said.

"Now, every time someone talks about foreclosure or selling it, I get asthma attacks and the lungs just start closing up. Everything I've ever done is between these four walls."

Local housing advocates plan to take her case to court.

As a housing slowdown puts millions of subprime borrowers at risk of default, debate is shifting to whether lenders should be required to ensure their loans are suitable for their customers, said Deborah Goldstein, executive vice president of the Center for Responsible Lending.

Some states such as Ohio have called on mortgage lenders and brokers to do more to make sure their loans are realistic.

Maine, California and Minnesota look likely to follow, Goldstein said, noting that federal banking regulators proposed guidelines this month for lenders who issue adjustable rate mortgages to subprime borrowers.

But that is little solace to those being foreclosed.

"There are lots of people who may be trying to fight back in terms of yelling at the company over the phone or writing letters, but people don't necessarily know what to do legally when they are being foreclosed," said Ash.
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Tom
Advanced Member
Username: Diverdown48

Post Number: 342
Registered: 6-2006


Posted on Friday, March 16, 2007 - 11:21 pm:   Edit PostPrint Post

Borrowers have some protections against unscrupulous and even honest lenders when mistakes or intentional errors are made in the loan process.

A rule of law in the US is contracts are interpreted in favor of the nonpreparing party. Ambiguities in the contracts/mortgages will be interpreted in favor of the borrower in a forclosure case that is disputed.

"Accusing Ameriquest of deceit and negligent misrepresentation, among other charges, the couple sued the lender, saying its salesman failed to provide documents and disclosures on the loan required by state and federal law."
If this is proved to be the case the lender will be in a bad situation since they are the one filing the suit. The mortgage itself could be voided.

"The loan salesman, she said, listed her as employed on the application even though she told him she was out of work and surviving on Social Security payments of just $643 a month."
If this is proved then the lending agent commited fraud. Bad news for the lender.

With the number of foreclosures rising the Feds and states will start looking very hard at lendors and their lending practices. I just heard today several lenders being investigated along with SallieMae for wrong doing.

Be assured, heads will fall.
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 157
Registered: 5-2005


Posted on Sunday, March 18, 2007 - 8:54 pm:   Edit PostPrint Post

Tom,

In my opinion the borrowers need to take much of the responsibility as well. Yes, I do think some people probably were talked into these "liar loans". Many people should have NEVER been given these loans.

However, you need to keep in mind that it's not just people with bad credit that got these ARM loans that they didn't understand. MANY people that would have qualified for traditional loans went for these "liar loans" as well. These people will be facing problems as well.

You don't have to be an Economist to see there are going to be clear problems. I saw this coming a long time ago. I think I posted some posts on TripAdvisor and some other boards as well up to 2 years ago about this very thing. I'm here in New York now in some financial meetings. The numbers are even worse than I estimated. I estimated that 15% of the loans last year were subprime adjustable-rate loans. Actually the number is closer to 20% it seems. These loans start out with a low teaser rate and then keep going up after two years. Also, another 20% of the loans last year in the USA were non-traditional loans with various payment options. These kind of loans let you pay ONLY the interest each month (believe it or not, some banks/institutions evened allowed you to pay LESS than the interest due) for a set period of time which seemed like a dream for most borrowers.

The problem is that you don't build up any equity unless the value of your house keeps going up. The thing is in a hot market the prices go up and on paper you have some equity. But when the market turns you are left with no equity in your property since you were only paying the interest (or less). Credit Suisse claims that 50% of all loan applications, the borrowers had little proof of their income for what the industry now calls "liar loans".

Up to 2 million people could lose their homes this year in 2007 in the USA via foreclosures on their properties. These aren't just deadbeats either. Many of them are teachers, office workers, hard working people that just over leveraged and over borrowed. To make things worse, these people because they are late on payments, can't refinance. Most of their interest rates are now much much higher than when they started out.

These lenders don't want the property and they WILL sell them. You take up to 2 million properties forced on the market at fire sale prices by these lenders that foreclosed on these properties along with a severely reduced # of people buying because they simply won't qualify for loans now that the government will start making it harder to quality for loans. Everyone is going to start raising their standards and many of these sub-prime loans will be eliminated. So in my opinion, you will see more of a glut of properties on the market and prices falling.

It's like a domino effect chain reaction. Yes, I do think in some instances people were scammed but I think most of the people simply signed off on something that they never took the time to read nor really understood in the first place. Still, it doesn't take a rocket scientist to figure out that if someone tells you that you only have to pay the interest ONLY than that could be a good thing.

I think the US economy will be greatly affected by this entire situation. Like I said...it's a sad situation. Tom - I do think some heads will roll but in these kind of situations (especially when most states don't even regulate this.... most people will lose their homes before any regulation is put in place. There is a LOT of red tape in these kind of things. Realistically, most of these people in the foreclosure process will lose their homes first. Also, keep in mind in the vast majority of the cases, you still have the borrower that signed off on the paperwork for these loans. Ignorance of what they signed is no excuse. Anyone that has purchased a home can attest to the huge stack of paperwork that you must sign. I'd venture to guess that most people don't even read any of it and sign where the lender tells you to sign. Odds are he/she "marked it with an X to make it easier for you". I remember many years ago when I purchased, my lender was irritated when I wanted to read every single piece of paper that I was signing. Good luck all.

PS - I think the UK is going to go through the same thing in the future. For many years the properties just kept going up so these kind of risky loans continue to be taken out. I heard today that the lenders in the UK are letting people borrow at even higher rates than the USA. This should be a recipe for disaster there as well. I already have many UK clients that are unloading their portfolios in London and buying in Buenos Aires as they see problems heading in the UK like the USA is going through now..
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Tom
Advanced Member
Username: Diverdown48

Post Number: 346
Registered: 6-2006


Posted on Sunday, March 18, 2007 - 11:29 pm:   Edit PostPrint Post

It is definitely a buyers market in the US right now. The only places that are semi-safe price wise are special interest type properties such as beach front in Palm Beach county, i.e. Florida's Gold Coast etc.

The rash of foreclosures will only he;p lower prices. The bad news is the people losing their homes, on the other end of the scale others will be able to buy a lot of properties for extreme bargains.
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 158
Registered: 5-2005


Posted on Wednesday, March 21, 2007 - 5:30 pm:   Edit PostPrint Post

Hi Tom,

Yes, definitely it's a buyer's market and I believe it will stay that way for some time. I'll actually start buying real estate within 2 years again after prices fall some more. I believe there will be some great value plays out there and I do think prices will continue to fall in many areas. I do think there will be more foreclosures that will be great opportunities to pick up properties cheap. It IS sad that so many people will be losing their homes.

I totally agree with you that there will be some extreme bargains in the future in many areas. All this will take time to play out and I think prices will continue to decline in many areas. Good luck all.
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elina overstadt
New member
Username: Agustina

Post Number: 1
Registered: 3-2007
Posted on Wednesday, March 21, 2007 - 10:33 pm:   Edit PostPrint Post

Mike:

If the real estate thing doesnt work out for you, you could try your hand at being a soothsayer.
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 159
Registered: 5-2005


Posted on Saturday, March 24, 2007 - 8:18 pm:   Edit PostPrint Post

Ha, ha. Funny Elina! Actually over the years since ALL my predictions and forecasts for Argentina have been 100% accurate, many people have told me that I should set up one of those fortune teller booths on the weekends in Recoleta like the other ones....

I strongly forecast that prices will continue to rise on Buenos Aires real estate in good areas like Recoleta, Palermo Soho/Viejo/Hollywood as there is still strong interest locally and more and more foreigners are buying here. I see more and more investment funds all over the world contacting me and I see increased interest from people wanting to get out of "paper" (stocks/bonds/mutual funds) and into real estate in Buenos Aires. I also believe that more traditional financing and credit will creep it's way into Argentina and when that happens the demand will go up and prices are sure to follow.

I believe that the economy will continue to improve. I see more and more foreign companies wanting to open up call centers and other offices here vs. India. I do think inflation is a factor here and a bit of a concern but I things continue to improve.

Best to all.
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Dan Sandefur
New member
Username: Panamadan

Post Number: 2
Registered: 4-2007
Posted on Tuesday, April 03, 2007 - 1:52 pm:   Edit PostPrint Post

I just found this forum, and got caught up with the past posts.
Most of it was very informative and valuable information.
Particularly, the information on buying RE and the taxes there.
Much more so than most of the Yahoo groups, which I found to contain mostly ads, opinions and hearsay, with relatively little factual or useful information.

The fact that caught my attention the most is the 21% tax on rental incomes. Since my investment plan there is to buy rental income producing properties, particularly locales comerciales, that tax may make me rethink that plan. I would like to hear from other rental property owners there. Offline if you prefer.
I do not condone tax evasion, but tax avoidance is important to everyone, especially investors.

Another issue that caught my attention was the relative illiquidity of certain RE markets there outside of BA, and the added restrictions to selling without a DNI. I am not a RE flipper. Even though I do buy and resell often, I usually hold properties for at least a year. While BA may be the most liquid market, that is not where I am looking to invest. I tend to invest where I want to live, and that is outside of BA. Does anyone have any data that ranks the relative liquidity of the different areas? Maybe info on the average time to sell in the various areas? If the average time to sell in some areas is a year, and I plan to keep it a year, then I need to put it up for sale as soon as I buy it. That means I may need to act like a flipper, even though I am not. This may make me consider BA for investing, even though I do not plan to live or invest there.

BTW, the Valle Punilla area, and Villa Carlos Paz, in particular, are the areas I am mainly considering now. Any input on that would be welcome too.

I am glad to see that this forum has a much lower percentage of ads, opinions and hearsay than most other forums I have seen.
I want to thank you for sharing your information and experiences.
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Benco
New member
Username: Benco

Post Number: 2
Registered: 4-2007
Posted on Tuesday, April 10, 2007 - 8:43 pm:   Edit PostPrint Post

A few days ago there was an interesting article in 'La Nacion' about the current role of mortgages in Argentina. It said that only 20% of real estate transactions involve mortgages, all the others are in cash. And the few mortgages normally cover only a small fraction (less than 40%, typically 20%) of the purchase price.

To get a ten year loan at a fixed rate of about 14%, you need to prove a monthly income of 4500 pesos in the white. (With the average salary in Argentina being around 1200 pesos, it should be clear that mortgages are not accesible even for most of the middle class.) Credit volume makes up only 2% of GDP in Argentina, compared to 14% in Italy and 64% in the US.

If credit becomes widely accesible the implications for the real estate market are obvious. The big question is if and when this will happen - the article quotes an annual growth rate for mortgages of currently 18%, which really looks promising. But still, we are in Argentina, so you never know...
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Simon Fawkes
New member
Username: Expatba

Post Number: 21
Registered: 1-2007


Posted on Thursday, April 12, 2007 - 9:27 am:   Edit PostPrint Post

Dan

The treatment of tax is complex, but there are accepted rules which make dealing with it relatively straightforward for foreigners. Rental income is subject to national income tax, currently at a rate of 35%. The foreign recipient can decide the taxable basis on which the withholding should be made. There are two options:

General Rule: This uses the legally prescribed assumption that taxable income will account for 60% of the rent paid. This results in an effective withholding rate of 21% of the total, derived from the application of the 35% tax rate upon a 60% notional income.

Specific Rule: The tax paid is calculated by deducting the actual expenses incurred which are necessary to support the rental, plus other allowances.

In short, you can pay a withholding tax of 21% of the rent, or work out the actual profit and pay tax on that at 35%. If you take the latter route you will need to hire an accountant to work out the correct figure, and you may end up paying more than the effective rate of 21%. The legal assumption that taxable income will account for 60% of the rent is about right, so the final figure is likely to be in this ballpark. Don’t forget that an accountant will also charge you a fee for working it out.

For these reasons it is much easier just to let your rental agent withhold 21% of the gross rent and pay the tax on your behalf. Most agents will only deal with landlords on a 21% withholding tax basis anyway.

If you rent out multiple properties then further rules may apply and you may be liable to pay local income tax as well.

I hope this helps.

Simon Fawkes
Author, The Complete Guide To Real Estate Investment in Argentina, ISBN 1430303980, http://www.amazon.com/exec/obidos/ASIN/1430303980
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Kirk Afshar
New member
Username: Love_argentina

Post Number: 5
Registered: 1-2007
Posted on Saturday, May 19, 2007 - 2:22 pm:   Edit PostPrint Post

I like to open and live in Mar Del palta.How much money I need to open small esperesso Bar. and is this a good Business?
how much it coast to rent an apartment and furinitures.
I ahve my own computer and 27 inch monitoe .can i covert the tv system from American to argentinian system A-palI think that is a system there).
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 186
Registered: 5-2005


Posted on Tuesday, September 11, 2007 - 8:01 pm:   Edit PostPrint Post

"I believe there are big problems about to take place in the USA. The stack of cards will fall and they will fall hard and fast. It will be a chain reaction."

Posted July 7, 2005



Interestingly enough I posted the above comments a little over 2 years ago on July 7, 2005. You can see I accurately forcasted the sub-prime mess that is playing out now and the stack of cards is falling. Also, the prices of real estate in Argentina as I also predicted has gone up dramatically.

I guess all those years studying economics and political science in University paid off after all.....
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WelcomeToMendoza.com
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Username: Welcometomendoza

Post Number: 16
Registered: 7-2007
Posted on Tuesday, September 11, 2007 - 8:26 pm:   Edit PostPrint Post

Mike good call, and they have even been talking about this since 2001 and earlier (ouch) - over at places like
http://siliconinvestor.advfn.com/subject.aspx?subj ectid=51347

So now the questions is, since prices have risen so dramaticaly here in Argentina, are we in for the same tumble? Would like your thoughts...
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DAN
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Username: Crazygaucho

Post Number: 17
Registered: 7-2006
Posted on Tuesday, September 11, 2007 - 8:52 pm:   Edit PostPrint Post

MIKE said
"I believe there are big problems about to take place in the USA. The stack of cards will fall and they will fall hard and fast. It will be a chain reaction."
couldn't agree more with you Mike
when I saw the price of my condo cuadruple in value since 1995 and didn't see neither rents nor salaries go up even close to that. and all those "creative"loans to be reset soon I knew it was time for me to sell and bought some shacks around here now we are thinking about going back to the good ol'USA but. I'll be a happy renter for awhile......I guess the university of cordoba avenue and jean jaures finally paid off !!!!! (just kidding Mike)
and another thing we should never forget this day guys
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 187
Registered: 5-2005


Posted on Tuesday, September 11, 2007 - 8:54 pm:   Edit PostPrint Post

Hi Mendoza,

I can't open up that link. Can you post it again? I'd like to read it. I actually first made the calls in 2004 I believe.

No, the drastic difference in Argentina from the USA and other places around the world is the market is driven by REAL money and serious INVESTORS. An estimated 90% or more of the purchases are in cash and financing is rare here (even still today). Mortgages are starting to enter the market and people ARE getting them. My lawyer recently got a mortgage with Banco Rio. The terms aren't good compared to the USA.

The tumble in the USA is because they were handing out money to anyone or his brother. In Argentina it's all cash. I've invested about $100 million dollars in the last few years in Argentina and you know what? It was all cash. None of these clients were getting loans. It was literally cash over the table. I always joke with my clients I've probably seen more cash on a table than the Mafia! It's a bit surreal.

So, to answer your question, no. I believe the market is insulated and there is still not a good place for locals to put their money. I don't think it will go up forever but I still see in many areas, the potential for property to go up 100% is a real possibility. Today, I'm buying more than I did in 2004. In fact, just today I bought another property for myself and I buy about 3 per week for my clients.

Remember the market is still driven by LOCALS not foreigners. The foreigners are moving in to Buenos Aires with their dollars, Euros and Sterling but it's still only about 15% - 20% of the overall buying. With the weakness of the peso, those I know and most serious investors are shunning peso demoninated investments and into dollar demoniated investments or cash. This is why I believe real estate still has some room to go.

I would be careful where you buy. In some neighborhoods like Puerto Madero prices are insane and i do NOT believe they will go up 100%. In some developments prices are over $4,000 per sq. meter and in some ultra high end developments prices are even more. Do I think prices in Puerto Madero in 5 years will be $8,000 per sq. meter? No. Do I think prices in Recoleta (where you can still buy for $2,500 per sq. meter or less) and in Palermo Soho/Viejo where you can buy for under $2,000 per sq. meter will double in 5 years. I think they have a good shot if the property is good, in a good building on a good street.

I have clients buying land up in Mendoza near vineyards and on golf courses where the master plan would be to develop high end houses. Prices for foreigners would be DIRT cheap compared to other areas.

I think that the potential in Argentina still exists. A foreigner has much less worries than a local. Inflation for a local is a big concern but for a foreign investor it's not really a factor. Utility bills are extremely low. They could double and it really won't affect their return much and we all know utiltiies won't go up 100%. The property taxes are very low as well and you still have good potential for cash flow with rentals on the property.

I'm not big on investments like vineyards even though I have clients buying things like that. I always recommend investments that you can generate dollars vs. pesos. The wine business is a tough business with so many variables (weather, hail storms, insects, rainfall, sunlight, etc). I recommended to my clients to buy a vineyard with the potential to develop homes on it. I like to think in terms of that.

So to answer your question, I think there is still upward growth potential here. Where else are these locals going to put their money???
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 188
Registered: 5-2005


Posted on Tuesday, September 11, 2007 - 9:01 pm:   Edit PostPrint Post

Hi Dan,

Ha, ha. Yes, people always talk about University like it's wasted but I guess a few of those classes paid off huh? I've always been facsinated by other governments and one of my majors in college was Political Science.

I agree with you about some properties quadrupling and people not getting out. You are exactly right when you compared rents nor salaries going up.

Here in Buenos Aires it's interesting as property prices are going up and so are rents and so are salaries. In a big way. Rental prices for both office space and residential keep going up. I lease my office and I ended 2 years last year and renewed it another 2 years and the rent skyrocketed.

Even today, I buy properties. I don't buy to "flip". Why? Because the property/investment is spinning off a good amount of cash and it's hard to find another investment that is better. Still, I've received unsolicited offers on some properties. I just sold one last week. I bought it in early 2004 and I just sold it for 100% more than I paid for it in 2004 and in the meantime had amazing rentals on it. Why did I sell? To get the money out of Argentina? No, I sold it because I found a property that I can charge even more rent per night and it was less than the other property that I sold. So the ROI on it will be even higher. As I planned when I put together my business model, the real estate sold for such a high amount not just because real estate went up but more so because it's like buying a business that spins off net positive cash flow month after month. In this way, an apartment rental piece of real estate is valued at a much higher multiple than a normal apartment rental.

As I first predicted in 2002, tourism would boom here. I remember posting that on several public message boards and some people laughed at me. Some living here laughed at me and said I was crazy, Argentina was too far, yadda, yadda, yadda. I accurately called the exchange rate free floating in a range of 2.75 - 3.25 and as I called, it has done exactly that. So, for these reasons real estate here is a dynamic investment that is different than other types of investments here. You have tons of locals as well buying real estate not just to rent out to foreigners but also to locals as it spins off cash flow each month and it's a very safe investment for them.

Many told me I was crazy when I sold everything and moved to Argentina but now they are seeing that I had thought out my business plan and my decision to move to Argentina. Luck had nothing to do with it. I put 2 years of my life putting together my business model but it paid off.

I do think just as in any investment there is a time to sell and take some cash off the table. I don't feel that is the time yet in Buenos Aires. I also don't think now is the time to buy in the USA. Prices keep falling and this sub-prime/ ARM nightmare will get worse before it gets better. There will be some great deals in mid-late 2008.
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DAN
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Username: Crazygaucho

Post Number: 18
Registered: 7-2006
Posted on Tuesday, September 11, 2007 - 10:06 pm:   Edit PostPrint Post

MIKE about the university of cordoba and jean jaures it was just a joke that's the location of a bar where I used spent my nights long time ago (you know how we the locals can talk for hours over a few cups of coffe) ......
I also believe there is time to buy and a time to sell and don't buy my properties to flip either, because, there is a lot of money involve in buying and selling (escrituras escribanos etc) specially that my 'investments"compare to yours are just petty cash ......
I'm not thinking about selling anything there if I we go back to the US, perhaps just my home,but none of my investments because it gives me a good peace of mind knowing that at least in this corner of the world if something happens to me, my wife and kid will be able to survive without a problem, and means a lot to me .... and just for the convineance on wiring the money, being able to purchase cashiers checks instead of the "shoebox"full of cash etc I bought all my rentals in Uruguay instead of argentina, and they are doing pretty well also .
Here I only own my home,on regarding the peso or dollar I wish I would've kept more uruguayan pesos instead of dollars, it went from like 27 uruguayan pesos to 23 an change on a couple of years.
also Mike although I don't post much (because of my "spanglish") I always read your posts like a bible everyday
I wanted to ask you something:
what do you think about a little furnished apt montevideo ? do you have any experience there ?
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 189
Registered: 5-2005


Posted on Tuesday, September 11, 2007 - 11:14 pm:   Edit PostPrint Post

Hi Dan,

I was wondering about Jean Jaures. I didn't get it. Now I do. :-)

There ARE people that have done well buying and "flipping" but the costs are prohibitive and ROI is diminished because of the high cost of buying here. (3%-4% realtor's fees; Escribano fees, money transfer fee to legally get money into Argentina; possible stamp taxes, realtor's fees when you go to sell, possible stamp taxes, 1.5% transfer tax when you go to sell). Just in those fees alone you need to make over 12% just to break even. I still know people that do quite well doing that but that isn't where the big money is at.

Never sell an investment that is spinning off a good cash flow until you can do something with the money that will make a significantly better ROI. (Just the way I think and it has done well).

I don't think it matters what the final dollar amount is either. You said "my investments are petty cash compared to yours". You shouldn't think like that. To me, the principles of the investment don't change whether I'm buying a small $60,000 studio apartment to a $5 million building. The key things to look at are the location, the potential for capital appreciation and the possible cash flow from rentals. It's all relative. Your small houses or properties might generate the same % than a bigger more expensive building. The key thing to look at is NOT the dollar amount of the investment because it's all relative.

The thing about real estate in Argentina (and in much of South America) is it's all cash. As I always mention, these are real investors and things like interest rates don't really matter. My investors paid cash for their properties and it doesn't matter what interest rates are like in the USA. It doesn't affect them. They paid cash and they don't need to sell. They do NOT have mortgages. The same applies to my properties I purchased. I could care less what is happening around the world. I hold no mortgages and the properties were purchased free and clear. They spin off cash flow each month that more than pays all the taxes, fees and utilities, insurance, etc. I pay taxes on the rental income and it still leaves a very healthy return and all the while the value on them keeps going up. Again, it's not a "bubble" situation like the USA or Europe as it's an all cash market. This is something that people really need to consider.

You are absolutely correct when you mention the Uruguay peso. I hold Uruguayan bank accounts as well. You will find the banks are extremely reliable and stable in Uruguay compared to Argentina. Really the way they do business and the real estate market in Uruguay is MUCH more advanced than Argentina. They have a REAL banking system there. You get none of this non-sense of charging up to 2% to wire money INTO the country.

Dan, your English is excellent. As to your question about Montevideo real estate. It is extremely affordable and I think property prices will go up there as well. There will be a revival of several areas; especially the Ciudad Viejo area and I believe you will start to see restoration projects that will take place in the next 5 years. When that does, you will see property prices go up. I do believe real estate will go up there. I've looked at the market several times and I own some real estate and land in Punta del Este. The reason I have not bought in Montevideo is they have no real tourism market and the rents compared to Buenos Aires are not even close for ROI. Because Buenos Aires has such a strong tourism market, the rental amounts you can get are very high.

Look at the hotels. There is a reason why the Four Seasons in Buenos Aires can charge as much as many Four Seasons around the world including the USA. The occupancy rates due to tourism keep all hotel prices high in Buenos Aires.

Remember that Argentina NEVER had even 1 million tourists before the crash. It was more expensive to come to Buenos Aires before the crash than it was to go to Paris. Remember before the crash the US Dollar was relatively strong so we had that working for us as well. 1 Dollar before was 0.75 Euros. Now 1 Euro = $1.38. So Buenos Aires was one of the most expensive cities in the world. It truly was cheaper to go to Paris than it was to go to Buenos Aires. Because of that, there was virtually NO tourism. Argentina first hit 1 million tourists in 2003 after the crash. I predicted this in 2002 which was when I started putting together my business plan to compete with the hotels.

In 2005 there were 3 million tourists and by the end of this year there will have been about 4 million tourists that came to Argentina. This was in line with what I predicted would happen.

Getting back to Uruguay. I love the country and I also predicted Punta del Este was underutilized and prices would go up. That also came true. I see prices there going up even further with Americans and Europeans discovering it. It was recently mentioned in Newsweek Magazine as one of the international destinations to look out for. I bought land there and the price on it keeps going up. I bought plots of land there 2 years ago and I've received offers for 100% more on them. I bought a house there that i totally renovated and rents in the summer are u$s 8,000 per WEEK.

However, in Punta del Este the utilities are astronomical. Water is priced insanely since they privatized the company. Electricity is very expensive and internet and cable and utilities, gardener, pool man, etc. are high as well. For that reason, I think one of the best plays in Punta del Este and possible Montevideo as well is raw land in good areas. I have been buying up land in La Barra and near it and it has appreciated rapidly and I believe it will go up another 200% - 300% or more in the next few years.

I don't think you can go wrong buying in Montevideo but if you have some cash, I think land in Punta del Este in good neighborhoods will do very well in the next decade. I've bought several plots of land in Palermo buying up old houses that are horrible but in good locations and knocking down the houses and buildig on them or just keeping the raw land to build in the future. The land prices have skyrocketed in good areas in Buenos Aires. Its part of the reason you see so many parking garages disappearing in Buenos Aires. The owners are getting offers too good to pass up to sell to developers and they are going up. Parking in Buenos Aires in a public lot is very expensive these days compared to a few years ago. Garage values are going up as well. I own several garages and get offers to buy them every month. I pass as I know the prices will continue to go up.

I still consider much of Argentina is undiscovered by outside investors. Once they discover it, most of them really love not only the investment potential but they love the country. I've always said that you can buy cheap real estate in many undesirable places around the world that you will never want to visit again. The best thing to me about Argentina is that not only does it have a great investment potential but it's a gorgeous country, full of beautiful people. I've been traveling non-stop around the world looking at potential investments and real estate in various cities. I have yet to find a place with the potential that Argentina has. I believe you will one day wake up and you will discover reading about how Buenos Aires has extremely high real estate values.

I pointed it out in another thread but look at Moscow now and real estate prices there. It's amazing to see it is one of the most expensive cities in the world now. Like I said...things move in cycles and it's good to pay attential to these cycles.

I know LOTS of locals. From simple blue collar workers, to some of the most respected professionals and families in Argentina. I work with many bankers, lawyers, Escribanos, accountants and the one thing they ALL have in common is they all own real estate (other than their principle home). I think you have to pay attention to these types of things.

It's interesting to see different trends in different countries. Just in the last 3 months I've been to Uruguay, the USA two times, Madrid, Barcelona, London, Budapest, Vienna. And next month I'm heading to Madrid, Barcelona, Sao Paulo, Rome, Venice, Paris, Florence and London again. I always look at real estate when I travel as well. Real estate in Buenos Aires is still cheap.

It's interesting the differences as well. I was in Brazil in Florianopolis in April 2007 and I placed an offer to buy an oceanfront condo. I wanted to pay cash. And the owner didn't want to accept the cash. I found it interesting. He wanted someone to pay a mortgage financed by the construction company at a high % rate. I found it interesting they didn't value all cash like they do in Argentina. Different strokes for different folks.

The exchange rate will NEVER go back 1:1. Never. Best to all.
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WelcomeToMendoza.com
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Username: Welcometomendoza

Post Number: 17
Registered: 7-2007
Posted on Wednesday, September 12, 2007 - 5:46 am:   Edit PostPrint Post

Mike, agreed on the vineyard business - there are 5 wineries in Mendoza that are making good money - the rest are just getting by or working hard to catch up. I too am big beleiver on "homes" in Mendoza, whther first, second, or third.

Sorry that link didn't work, Try http://siliconinvestor.advfn.com/subject.aspx?subj ectid=51347

That board is full of bears who bet against the housing market since 2001, hence my word "ouch"..as they were a little early at the time.
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Simon Fawkes
Junior Member
Username: Expatba

Post Number: 42
Registered: 1-2007


Posted on Wednesday, September 12, 2007 - 7:07 am:   Edit PostPrint Post

Mike is spot on with his post above, particularly with reference to over-priced neighbourhoods like Puerto Madero where prices won't double - at least in the short to medium term.

Most of the property inflation in the USA and Europe has been driven by the easy availability of cheap credit. In Argentina this hasn't been the case, and the fact that purchases are made in owned cash, not cheap borrowed funds, has helped to prevent the run-away house price inflation that has been seen elsewhere.

Mortgages are just starting to take off in Argentina, although they still account for just a tiny share of transactions. If this trend continues, as seems likely, then the wider availability of credit will exert an upwards force on property prices. I don't see this happening immediately, but it could be a significant factor in 4 or 5 years time.

Simon
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 190
Registered: 5-2005


Posted on Wednesday, September 12, 2007 - 8:52 am:   Edit PostPrint Post

Hi Simon,

Yes, I agree with you. It won't be overnight. I think 3 years to 5 years they will slowly become more readily available and it's in that 3-5 years that you will still see a push up in demand and in turn prices. The same thing has happened anywhere around the world where there is credit and financing. THAT will be the time to sell when the prices have peaked due to so much demand. I've built up a portfolio (both personal and for clients) to take advantage when that day comes to unload at amazing % returns. In fact, I'm building a building now in Palermo myself now. I had the entire 24 unit apartment sold with only 1 email to my clients and it took 12 hours for a multi-million dollar project. Those investors will probably double their money in 1.5 year's time.

The same thing happened to me 1.5 years ago. I got into a new construction when there was a hole in the ground and I bought most of the top floors. They are worth 100% more today 1.5 years later.

Supply and demand will be key the next 5 years in the real estate market here. As I predicted in 2002, I continue to see prices going up leading up to this ease in credit lending. I continue to see tourism growing and the export market due to the fact that the government has kept the peso from strengthening (a move I agree with) the export market (beef, soy, grain and agricultural products) should do excellent as the past several years. Those that took advantage of this phenomenom will be glad they did as I've been posting since 2002.
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Tom
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Username: Diverdown48

Post Number: 432
Registered: 6-2006


Posted on Wednesday, September 12, 2007 - 3:10 pm:   Edit PostPrint Post

If the cards fall in the US, they will fall everywhere.

The US is the one of if not the largest econmies. When people stop buying here, all those manufacturing counties that ship billions of dollars worth of goods to the US will be hit hard. They in turn will affect other countries that supply the manufacturing countries with raw materials.

I am 59 years old. The US economy goes up and down. When it goes down the world is affected in a like mannor.

The difference in the US is the stability of the government. Not the quality but the stability.

South America has problems with the same old types of leaders. They seem to not be able to get away from dictators. Chavez of Venezula is the latest. Call him what you will, he is a dictator.

I hold out hope for Argentina not returning to that type of leadership. It is not written in stone.
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WelcomeToMendoza.com
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Username: Welcometomendoza

Post Number: 18
Registered: 7-2007


Posted on Wednesday, September 12, 2007 - 3:31 pm:   Edit PostPrint Post

Hi Tom,

You talking coup or continued Kirchner-type ruling (like through his wife)?

I highly doubt we could get back to military style rule, althugh I did live in BA in the last 2 years of militry rule, and I am surpised by the random comments of citizens these days that it was "better back then" from a security point of view. Which is true, becuase if you comitted a crime back then, that was it for you. There was very low crime, go figure. I certainly don't condone this and would much rather Argentina learn how to deal with it's justice system properly, rather than use hard force.

Do you live in Argentina? Would be intersted in your thoughts on real estate values now and within 5 to 10 years, and how the locals and their historically miserable wages play into the formaula.
Thanks
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Tom
Advanced Member
Username: Diverdown48

Post Number: 435
Registered: 6-2006


Posted on Wednesday, September 12, 2007 - 3:48 pm:   Edit PostPrint Post

Hey Welcome
I don't see a real imminent threat in Argentina. There are so many political parties, free press, mass media and internet that are the hope of free elections.
Argentina bosts the highest literacy rate in South America.
I don't have a lot of problems with what Kirchner has done so far and having his wife run for President is better than taking over outright.
I did not agree with his moratorium on the export of beef last year.
The property values are going up are being fed by foreign investment.
But that is problematic in some areas. For example, the wacko who went on the ranch of one American's estancia and cut the locks on his storage shed. This was a problem with the local poor trying to take back their land and the official was grandstanding.
I have a home in Argentina. South Buenos Aires province.
To me Provincia de Buenos Aires is the place to be. I love farming and the vast estancia's are beautiful and of course the city of Buenos Aires is magnificant. A walkers paradise with anything you can find in any other big city and then some. Ok, I love the women, the beef, the cost of living, the friendly people, the sights, the scenes, the bars, the beer, the waterfont, Recoleta, on and on, you get the picture.

Cost of property and prices are not helping the wages as much as it should but that is the plight of the poor everywhere.
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 191
Registered: 5-2005


Posted on Thursday, September 13, 2007 - 11:13 am:   Edit PostPrint Post

Actually I agree and disagree with some of Tom's comments.

I agree with him there is NO imminent threat in Argentina. It's my personal opinion you saw the worst for Argentina at the crash in 2002.

Like Kirchner or hate him. He has done a pretty good job during an extremely difficult time. Yes, the government plays with the numbers a bit but Argentina has improved drastically and I believe it will continue in that direction and finally they are getting some outside investors to invest in Argentina and that is what it is going to take. Cristina Kirschner is a VERY intelligent woman. Most people don't realize she has actually been involved in politics since the 1970's. She studied law and has a law degree. She isn't just the "president's wife". She is a smart cookie.

The Kirschner's are intelligent people and Cristina is trying to woo foreign investment and expect to see more foreigners investing in Argentina. Do you really think they are friends with the likes of Chavez?? Come on. Get real. When you are trying to get Chavez to buy $1 BILLION worth of Argentina bonds you will have your photo taken with the guy.

You will NEVER agree with 100% of what your country's leadership (President, Prime Minister, etc). Never. Look at President Bush. I disagree with most of much of what he does.

I disagree with Tom when he says that property values are "being fed by foreign investment". Sure, foreign investment is not hurting but he is mistaken if he thinks it's the foreign investment alone that is driving it up. Foreigners buying real estate and land here is still only about 15% - 20% of the overall buying. It is STILL LOCALS buying here. THAT is driving up prices.

Sure, I believe foreigners will keep buying here once they discover what a great place Argentina is. Whether you live out in the provincia where Tom prefers, or the heart of Recoleta where I live, you will find that most people love Argentina. Whether you want to aspire to have your own vineyard in Mendoza, to a big multi-million dollar ranch in Salta (which I've purchased for clients) or you want a resort down in Bariloche or Patagonia. Argentina is diverse and very different and you will find more and more locals and foreigners seeing it's the safest investment in a country with a history of instability in the banks.

No one can predict the future 100%. No one can make guarantees. No one has a cyrstal ball that works 100% of the time. However, look at all these things I have predicted since 2002. The economy, real estate values, the exchange rate, economy, unemployment rates. I don't have a cyrstal ball either but I do look at all these things I mentioned and it might make sense for others too as well.

The Argentina of yesterday is not the same Argentina of today nor will it be the Argentina of tomorrow. Yes, it will take a LONG time to change but I think most can already see changes. You will have more innovative entrepreneurs with the know how to do things efficently, ethically and more importantly have the capital to help bring Argentina into the 21st Century. Those with vision can see it. Look at companies like Google that have opened offices here. In life and business and even love many times, the most successful people are the ones that have the ability to see a decade or more into the future. People ask me sometimes if I have ESP. I laugh. I wish I did so I didn't have to work 15-17 hour days. (I'd just win the lottery if that was the case). I don't. I do have the ability to see future potential in my friends, my loves of my life and also an economic situation. I have few loves of my life but Argentina is one of them...

One of my favorite sayings is "overnight success usually takes about 10 years". I truly believe in that quote. Nothing in life was given to me. I did it myself. I think Argentina will need to follow a similar pattern.

Best of luck to all.
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Tom
Advanced Member
Username: Diverdown48

Post Number: 440
Registered: 6-2006


Posted on Thursday, September 13, 2007 - 6:19 pm:   Edit PostPrint Post

Actually Apts, if you agreed with everything I said I would be truly shocked.

Hasta luego Amigo
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Tom
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Username: Diverdown48

Post Number: 441
Registered: 6-2006


Posted on Thursday, September 13, 2007 - 6:38 pm:   Edit PostPrint Post

Time is money. Abraham Lincoln, who was an attorney, said words to the effect that time is a Lawyers stock in trade.

Time has similiar value to other professionals, entrepreneurs, and people although sometimes not at such high cost but, then again, sometimes more.

I have been doing various and sundry other things in Houston Texas over the last few months which has been time consuming. It is fall in the US and football is upon us. That will pretty much tie me up until February. Add as much free time as possible to spend quality time with grandbabies, precludes travel.

I really look forward to coming down to the land of the Gaucho again, that being probably March.

I have a couple of deals working down there both of which need time, the beauty of the country, the people, the cost of living for a North American, the cabarets, friends and legal obligations call me.

So there, I have a good reason to come, I admit it, shoot me.

Anyone think March would be a good time to have a get-to-gether?

Roberto?
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Tom
Advanced Member
Username: Diverdown48

Post Number: 442
Registered: 6-2006


Posted on Thursday, September 13, 2007 - 6:58 pm:   Edit PostPrint Post

Now that I have actually taken the time to read what you wrote Apts, except for a couple of exagerations concerning what you said I said I pretty much agree with what you said. I must say that is a lot to say or said as the case actually is.

The pres's wife down there sounds pretty much like a female running for pres up here. I hope they both win.

Back in the day I was know to say to high justices, I humbly submit to you bla bla bla....... From what I have read, God likes for us to be humble.

I applaude your wisdom and your efforts to do what you do here and in life.

Does any of this make sense. If so,

Hasta luego Amigo
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 192
Registered: 5-2005


Posted on Thursday, September 13, 2007 - 7:23 pm:   Edit PostPrint Post

Hi Tom,

I don't think I exaggerated or took anything you posted out of context. I know sometimes readings things is not the same as speaking in person. I just read what you wrote. Nothing more and nothing less. You posted, "The property values are going up are being fed by foreign investment". Maybe I took it the wrong way. I'm not sure. If so, I apologize.

As I mentioned, it certainly doesn't hurt the prices but it's certainly not the cause of the prices. Property prices anywhere around the world are mostly caused by the local buying/selling. It's no different here where LOCALS are driving up the prices of real estate as they seek out dollar denominated investments/securities. There is a real flight to quality and real estate is a safe haven i Argentina. When you take a situation where locals always will consider "bricks" safer than keeping their cash in the banks and you will have a good recipe for capital appreciation.

Add in credit and financing (slow as it may be).. ANY lending will cause more buying which will in turn cause prices to go up. Economics 101.
I am not posting to tell you "i told you so". That isn't my purpose of posting. I've posted publicly on the internet since it began and those that follow my posts know I always try to educate and provide my honest opinions on things.
It's interesting as when I left the USA, right before I moved and sold my house, my BMW, cashed in my investments, sold my stock to buy all this real estate here I got a job offer to open up an office in Manhattan. It was for hundreds of thousands of dollars a year. Really mad money. At first I accepted it and then I started to imagine what life would be life if I abandoned my dream to move to Argentina. I wondered what it would feel like if I woke up when I was 40, 50 or 60 years old and wonder how my life would be like if I didn’t take the chance to explore my business plan that I put together for 2 years. In was in that instance that I decided to move. Sometimes the road less traveled is the right path to take.

I'm NOT saying that Everyone should invest in Argentina or even that anyone should. There are many candidates that are NOT a right fit to invest in South America. In fact, before I agree to get hired i always interview the client and see if they are a right fit to invest here. Unless you have 100% of the cash to invest here you shouldn't invest here. This isn't the place to borrow money to try to own. All my clients had the cash to buy.

One of the most memorable initial consultations I had since moving here was about 2 years ago. It was a lady named Suzie. She did hire me but then her husband told her how stupid it would be. I remember they were both in my office. She had the cash and she wanted to buy a small studio apartment. Her husband was a bit ignorent and rude. He kept yelling at her and swearing during the meeting. He kept telling her (in front of me) how he could take the money and buy something in Las Vegas and have it go up in a few months. She ended up telling me her husband wouldn't "let her buy". I often wonder if she bought anything in Las Vegas where prices have plummeted and here prices have done very well. Oh well....

Most people lead very ordinary lives. They have an ordinary job, live in an ordinary house and do ordinary things. I found that if you want an extraordinary life you must do extraordinary things. Moving to Argentina was one of those things and after moving here I knew I made the right decision. It wasn’t an easy decision but I’m glad I made it.

Stay well.
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Alex
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Post Number: 1
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Posted on Saturday, September 15, 2007 - 11:59 pm:   Edit PostPrint Post

Political cheap shots aside:

Real Estate in Argentina is risky to the same degree that it is risky in ANY country. I just came back from Ukraine about a year ago, ( I am half Ukrainian ) It has become the 20th most expensive city in the world overnight.The prices over there have hit the roof. I see it as somewhat of a bubble, only because the median salary is still only about $500 US a month, but there is so much money, so much foreign investment, so many overnight oligarchs, that the properties we bought 10-12 years ago for 30K a piece have gone up to 300K-500K a piece with no end in sight as far as where and when they will cap off. Who would have known ? I am just happy I got in while it was still good.

So about a year and a half ago I decided to come to South America ( since I am half South American) and invest some of my windfall. I started by doing a market study, I came to the conclusion that Argentina was my best bet overall. There were a couple other good candidates, but I knew that if I was going to do some serious investing I would have to live in the country for a while and as such I came to the conclusion that Argentina would be my best bet.

Exactly a year in, I have no regrets. I am not at the level that Saint here is at, but I have purchased a few properties to date. A couple are currently renting with an 80-85% occupancy rate, and I have a nice little extra income from them. I have also purchased a couple properties for myself and a few family members. The monthly overhead is minimal, the market is RIPE for high end apartments, so the occupancy is no problem, about the only thing I ever worry about is picking and choosing my clients. The properties I have purchased have appreciated about 25-30% since I bought them. Of course you have to continuously invest in and maintain your property, but that goes without saying.

The formula is pretty basic, though the numbers change because the prices keep rising. There are some projects I was offered pre to mid construction when I first arrived, that were going for 1500 a sq meter, after construction they are selling for 2700 a sq meter, go figure.

Good Luck,
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 193
Registered: 5-2005


Posted on Sunday, September 16, 2007 - 7:39 am:   Edit PostPrint Post

Hi Alex,

Yes, I TOTALLY agree with you. Real estate, and any investment for that matter, has some risks. And that includes real estate purchased in the USA. People laughed at me a few years ago when I told them that banks were giving out too many loans in the USA and bad things were going to happen. That there was risks there. That has proven to be true.

As you mentioned, real estate has risks anywhere in the world. What happened in the Ukraine and Russian real estate market has been incredible. I also had the chance to buy real estate in Eastern Europe several years ago and I passed on it because of fear, distance (being so far away) and not knowing anyone there reliable to manage the properties for me. Hindsight is 20/20 but I wish that I invested in a small property there. They have gone through the roof so congratulations. I've found that most real estate investors are too scared to invest in anything that isn't their "back yard" or same city they live in. I've found that experienced real estate players are those that have the ability to invest in an international location that they see as having potential for both capital appreciation, low taxes and cash flow. My ultimate goal is to build up an international portfolio of properties all around the world.

You were wise to move here and see the market personally and manage them. It's impossible to build up a company from afar. I first came down to Buenos Aires, came down every month (or more) for 2 years before I decided it had to be done there in person if I really wanted to build up a serious company. That was the right decision.

Your #'s are spot on. When I started my business here in 2002, no one in the city was offering luxury rentals. I was the first one. And at the time there were only 3 or 4 rental companies and they were all pretty much offering cheap properties. When I was making my business plan I knew the market wouldn't be the best at the cheap end but better at the high end. Why? Because the high end attracts better quality of rental clients. People that usually pay $150 - $500/night are usually staying at 4/5 star hotels and that has proven to be the right call. Also, business, corporations and Embassies make up about 35% of my total clientele now and that is growing.

As I've mentioned before and on my website, the fixed costs of owning a property here are very low. You have your monthly condo fee (which is usually from 200 - 600 pesos...of course it can be more if it's a big property or has many amenities in the building like 24/7 security, pool, etc). Your utilities are fixed and subsidized so they are extremely low. Your property taxes are set at 0.75% a year based on the listed price on the title deed. Your biggest expense will be your property management fee to have a company or individual manage your property and pay your bills, handle the rentals and the your next biggest expense will be the AFIP rental taxes of 21%. So most people are making great cash flow in the meantime the capital appreciation has been steadily going up.

Yes, this isn't rocket science here. You can plug everything into a rate of return spreadsheet to estimate net rate of return as you can plug in all the numbers and estimate return. Of course prices keep rising here.

Alex correctly mentioned that new construction projects offer amazing return potential. However, they also have more risk than pre-existing properties. You have to be really really careful who the developer is. These are all speculation projects and they are building the building with pre-sales and sales during the building. So if something happens you can get stuck.

My best returns have been getting in projects when there is a hole in the ground. I know the developers or worked with them before. It's frustrating waiting but often times you can have a 100% return in less than two years. I got into a few projects on new constructions in mid 2006 that will be done in January 2008. I bought a few floors in the building and the investment went up 100% from then until now. I bought the top floor which is always the most desirable.

So again, not everyone is a candidate to buy in Argentina but those that have the cash to do it and have.....have been pretty happy. I think someday Argentina (in several cities) you could see the scenario of what Alex described above. Waking up and a decade later seeing your properties worth a mini-fortune. That is the whole idea of real estate to me. Buy low, sell high.

Alex (and others), another thing that you will see from doing your business and something that I factored in when I made my business model/plan is that the property prices when you sell them aren't just a piece of real estate. It is a BUSINESS since your property is spinning off positive net cash flow each month. When you go to sell it, you can show your balance sheet, expenses, income and it's almost like selling a business. The multiples you get when you sell it are much higher than what the average real estate is selling for in that building. I don't buy to "flip" as I mentioned before. But I have sold several properties when I get unsolicited offers. And on every one that I sold I got a HUGE premium because of the business aspect of the rental. I just sold a property that I bought 3 years ago for a 100% premium on the price I paid and I had 3 people willing to pay the full asking price. Best of all, when I sold there was only a 1.5% transfer tax in Argentina and 0% capital gains tax.

Tourism isn't going anywhere in Argentina. I remember I posted on some message boards in 2002 and 2003 that tourism was going to boom here in Argentina and a few people laughed at me. What is even funnier is that some of these people lived in Argentina for years and couldn't see the potential. I could easily see it. It's easy to play monday morning quarterback and invest here when almost every magazine is saying it's one of the best places in the world to invest but when I came here everyone was staying to stay away from it. I'm investing today for the same reasons I invested after the crash. I still see potential and see prices on the rise, I see good net cash flow from rentals all the while property prices move up.


Best of luck to all.
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AMARAGGI
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Username: Amar

Post Number: 4
Registered: 12-2006
Posted on Monday, September 17, 2007 - 10:31 am:   Edit PostPrint Post

It is still unclear for me how prices are beeing fixed and are evoluating. I wonder if there is not on one side a market, basically in Recoleta and Palermo where prices are fixed by what foreigners are ready to pay and a market in the rest of the city where prices are fixed by Argentinans wheter thery are rich or poor. The rich usually buying huge apartments in areas that don't suit the short term rental market.
I have been watching prices in Palermo and Recoleta these last 12 months and never could find a price of 1500$/m². If I take the example of the Live Hotel, prices are already around 2500$/m² for occupancy end of 2008. Is there still room for profit with these prices?
On another hand a recent article in La Nacion was quoting an inflation of 20% and growtg of 9% which is huge. Obviously Argentina will have to invest havily in industrial and energy plants. How will it finance these investments? I love the country and its people and I intend to spend several months per year there. It has surely a huge potential but how will it face immediate challenges?

Thanks in advance for advices of experts.
Amar
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 194
Registered: 5-2005


Posted on Monday, September 17, 2007 - 10:55 pm:   Edit PostPrint Post

Maybe my prediction of problems in the UK will happen even earlier then I predicted. I said maybe late 2008 to 2009. It's interesting to see the British are pulling out BILLIONS of dollars per day out of the banks for lack of faith in the system. Does this sound familiar to anyone??? Gee, when else did this happen? When else did people wait hours in line at the bank to withdraw their savings with the bank? I am in NO way, shape or form saying the banking system in the UK is going to collapse. Far from it. I'm merely pointing out that these kind of things are a sign. While people have the "sky is falling syndrome" when pointing to countries like Argentina, they might be best to also look in their "back yard".

For those that are interested, you can read the story below:


Government attempts to stem Northern Rock panic
September 17, 2007

http://afp.google.com/article/ALeqM5gfVZr6ZERERsJg PDxGp50nPl2KUg

LONDON (AFP) — The government weighed in Monday to stem panic at the crisis-wracked Northern Rock bank, vowing to protect all savings as customers queued for a third straight day to withdraw cash.

The exceptional move was announced by Chancellor of the Exchequer Alistair Darling after another day of turmoil in which shares in the group plunged by more than 40 percent to an all-time low.

Meanwhile, fears that problems could spread led shares in another major British home loans specialist, the Alliance and Leicester, to plummet by over 30 percent Monday.

Darling announced the new move after talks with the Bank of England and the Financial Services Authority (FSA) over how to deal with the mounting sense of crisis.

"Should it be necessary we and the Bank of England would put in place arrangements that would guarantee all the existing deposits in the Northern Rock bank during the current instability in the financial markets," he said.

"That means that people can continue to take their money out of the Northern Rock bank .. but if they choose to leave their money in the Northern Rock bank it will be guaranteed safe and secure."

Under normal FSA regulations up to 33,000 pounds of deposits are protected, but anything more is not guarantee. Darling's announcement covers all savings, whatever the amount.

Savers showed up at dawn on Monday to pull their money out of Britain's fifth-largest mortgage lender, which last Friday was granted an emergency lending facility by the Bank of England as it struggled to borrow from other banks.

A global credit squeeze has emerged as banks refuse to lend to one another in the aftermath of a sharp downturn in the US subprime housing sector and a wave of defaults by high-risk US borrowers.

The future of the group remains uncertain and the company scotched speculation that it was on the verge of agreeing a rescue takeover deal.

"Northern Rock is not in discussion with any other party at the present time," the company said in a statement late on Monday.

US broker Merrill Lynch on Monday said the "game is over for Northern Rock in its present form" and British newspapers The Financial Times and the Daily Telegraph both reported that the company was looking for a takeover deal.

Analysts at Deutsche Bank said a takeover would be the best solution for the shareholders of the beleaguered institution.

The company, based in Newcastle in the north of England, said it was aware of its responsibilities to shareholders, its so-called fiduciary duty, and was looking at its options.

"The board is aware of its fiduciary duty and is actively considering all strategic options in the interests of shareholders, customers and other stakeholders," it said.

Northern Rock's share price hit a historic low of 257.25 pence Monday. Nearing the end of the day's trade, it stood at 288.5 pence, down 34.13 percent.

The bank's market value has now slumped by more than half to about 1.1 billion pounds (1.6 billion euros, 2.2 billion dollars) since the close of trading last Thursday.

Northern Rock customers have been withdrawing their savings en masse since Friday.

"My grandfather called me on Saturday and told me to take the money out of Northern Rock," student Jenny Price said Monday as queued outside a branch in the centre of Liverpool, northwest England.

"But I'm looking at the queue now and wondering if there will be enough cash in the branch to satisfy everyone."

About 2.0 billion pounds was withdrawn over the counter or online by Northern Rock's savers over Friday and Saturday, reports said.

Northern Rock chief executive Adam Applegarth refused to comment on the figure but acknowledged that the bank was facing another "extremely busy" day.

"The way to restore confidence is very simple -- it's business as normal, it's allowing customers to do exactly what they want to do," he told BBC radio.

"The customers are perfectly entitled to take out their money. We have got their money, the problem for us is the logistics of getting (it) to them."

Northern Rock, which has 1.4 million savers, has yet to confirm whether it has begun borrowing from the BoE's emergency fund.
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 195
Registered: 5-2005


Posted on Tuesday, September 18, 2007 - 2:53 pm:   Edit PostPrint Post

September 18, 2007 --

http://english.aljazeera.net/NR/exeres/818B28E8-18 48-431C-A56A-575DCAB1D824.htm


"I don't know what we will do with the money yet, but I don't trust what the government says," said Doria Watson.
"We were here yesterday but were told we had no chance of getting in, so we are back today and will wait as long as we have to."

Joyce Hutton, who was queuing for a second day, said: "What the government has said gives us more hope, but there is still doubt and I am not taking any chances."


A bit ironic. I know a few local Argentines that said the same thing back before the devaluation. Again, I'm NOT saying that the banking system in the UK is in jeopardy but take all of these things in when looking at the future of the economy. When the Central Banks have to take unprecendented moves to guarantee deposits in civilized first world countries I think that should be a bit of a wake up call.

Again, I do predict the UK has a credit crunch and problems similar to the USA market coming up in the future.....time will tell.
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Sergio
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Username: Sergio

Post Number: 5
Registered: 6-2006
Posted on Sunday, September 23, 2007 - 7:22 pm:   Edit PostPrint Post

For people that deal with foreign (USA) real estate investors in Argentina, have they ever had a client that used a self-directed IRA account to purchase property?

I would like to hear the details of the transactions and the complications involved. By the way, it is legal by IRS rules to do so but it is not a well known fact.

thanks

Sergio
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 196
Registered: 5-2005


Posted on Sunday, September 23, 2007 - 9:21 pm:   Edit PostPrint Post

Hi Sergio,

It CERTAINLY is NOT against IRS rules or regulations to use a self-directed IRA account to purchase real estate outside of the USA. There is a lot of mis-information on this topic but it's certainly legal. I'd advise you to consult your accountant in the USA on the subject and possibly your lawyer as well.

If you want basic information you can simply Google.com "self directed IRA to invest in foreign real estate" and you will find tons of links that explain the process.

Personally, I have never done it nor do I work with clients that have done this. One of the first things I do BEFORE I even consider taking on a client is they must pay for an initial consultation and I explain the process and also I interview them about their financial situation. I refuse to work with people that don't have 100% of the cash to buy property in Argentina outright without taking on loans/financing. Certainly it's legal to do so but I've found from past experience dealing with clients it's best to deal with those that have plenty of cash to invest overseas.

But getting back to your question, it IS possible but I would think it wouldn't be so easy but I'm sure that it could be done. Good luck.
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Sergio
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Username: Sergio

Post Number: 6
Registered: 6-2006
Posted on Monday, September 24, 2007 - 1:14 am:   Edit PostPrint Post

Thanks for your quick response. Obviously , I knew it was legal as I indicated. However, I was not aware of this until a few weeks ago. One very interesting fact is this:

"Are the gains or income taxable from IRA real estate investments?

If an IRA buys investment real estate and then sells it at a profit, all income generated while it was held in the IRA and all the gains resulting from sale WILL be either tax-deferred (regular IRA) or possibly tax-free (Roth IRA), IF the purchases were all cash with IRA funds."

"Why should I use a Roth IRA for real estate investing?
If you invest with your Roth IRA (and by the way, your Roth, SEP and regular IRA can all invest together in a real estate investment as co-tenants), all the income and capital gains will go back to your Roth IRA tax-deferred. Because Roth IRAs are funded with after-tax funds, if you leave the earnings (e.g., income and capital gains) in the Roth for five years from the date the Roth was first established AND until you are 59 ½, the entire Roth, INCLUDING THE EARNINGS, WILL BE TAX-FREE FOREVER."

As you mentioned, it is very important you consult with your lawyer or accountant before you do anything like this.
Of course, you know in the USA people hold millions in these IRA accounts. The implications of a tax deferred/free investment (with a relative risk if done properly as you indicated in many of your posts) seems as a real alternative to the 5% CD or the moderate to high risk Vanguard Index Funds.

My original questions was related more to the nightmare that must be in Argentina to deal with an IRA fund buying property if it is even allowed.

I am just curious why you will not take a client that may have a large amount of money in a moderate to high risk mutual fund available. It is cash in a different form. The risks may be equal or less to a mutual fund and he is looking long term with very good tax advantages IMHO.
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 197
Registered: 5-2005


Posted on Wednesday, September 26, 2007 - 9:36 am:   Edit PostPrint Post

Sergio,

When I said "Cash" I didn't just mean literally "cash". Cash typically signifies liquid securities that can easily be sold. Of course mutual funds and stocks would be included in that.

What I meant is that I don't take on clients that need to get a loan or other financing or don't have the means to purchase the real estate here. Some people are already leveraged to the hilt with home equity loans, car loans, loans on their kids education, credit card debt, etc. and the only reason why they want to buy something here in Argentina is because they can't afford anything in USA/UK/Europe so they think buying here instead is the solution. IMHO, that is NOT the solution and I don't advocate people in this situation buy here in Argentina.

Before I screened my clients (back in the beginning) I had people buying that really shouldn't have bought. Some were leveraged (and I didn't know it) and then with any little economic ripple in the USA/UK/Europe they would get panicked and feel like they had to sell. One guy quit his job and felt forced to sell. It wasn't a good feeling for anyone involved. I got a call saying, "Please I must sell....i don't care if I break even but I need the cash". I had to calmly tell him there was no reason to only "break even". Real estate here has appreciated significantly and there is no reason not to make money on it. It took a bit of reassurance but finally he took my advice and he did make money on the sale but after that experience I started to screen my clients and it was the best decision.

People have different reasons for investing in real estate in any different country but it's NOT for everyone. I think you have to take a good look at your situation. That's what I meant by "all cash".

Best.
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 217
Registered: 5-2005


Posted on Sunday, October 07, 2007 - 6:17 pm:   Edit PostPrint Post

There was a good article in the La Nacion today (October 7, 2007) on the front page of the Business section. If you don't read Spanish you can get it translated on one of the translation websites. It describes pretty much what I've been saying for the past several years. Now with the Euro so strong, more and more Europeans are buying here with their strong Euro.

BA real estate is still very cheap compared to world capital cities around the world and many of those bigger cities are a "bubble" with cheap credit. Real estate here is a safe play and I believe it will continue to go up.

http://www.lanacion.com.ar/edicionimpresa/economia /nota.asp?nota_id=950728


Para los extranjeros, los ladrillos son una inversión segura
Pese a las dificultades para el acceso alcrédito y más allá de la crisis financiera global, la Argentina continúa siendo un destino atractivo para fondos y ahorros que buscan refugio.

Las dificultades en el acceso al crédito hipotecario no alcanzaron para desalentar a los inversores internacionales que continúan apostando al mercado inmobiliario argentino.

La combinación de falta de oportunidades de negocios en el Primer Mundo y precios de las propiedades en euros cada vez más atractivos en los países influidos por el dólar, como la Argentina, provocó que en las últimas semanas se multiplicaran los anuncios de proyectos inmobiliarios en el mercado local, lo que a simple vista podría parecer contradictorio, teniendo en cuenta la incertidumbre que se instaló en el sector a partir de la crisis bursátil.

La ola de inversiones es encabezada por empresas españolas y en lo que va del año ya suman más de media docena las desarrolladoras inmobiliarias de ese país que anunciaron o incluso ya dieron sus primeros pasos en la Argentina.

Sin embargo, los españoles no tienen el monopolio de las inversiones extranjeras en el rubro y en los últimos meses también se produjo la llegada de compañías de real estate de Estados Unidos, Brasil, Grecia y México, entre otros países (ver aparte).

En prácticamente todos los casos se trata de proyectos que se venían evaluando desde hace varios meses, es decir, antes de que se desatara la crisis internacional de los mercados financieros, aunque el dato más llamativo es que el mercado local no perdió atractivo para los inversores extranjeros a partir de los últimos sucesos.

“La crisis internacional de los mercados no es un obstáculo insalvable. El argentino es uno de los pocos mercados inmobiliarios en el mundo que no está apalancado, con lo que no se corre el riesgo de una burbuja que estalle. Y en el caso de los créditos hipotecarios, está claro que los últimos hechos van a retrasar el acceso al financiamiento para muchos potenciales compradores de clase media, aunque igualmente no es un público que se perdió, ya que desde hace varios años este segmento de la población no tiene acceso al crédito”, señaló Enrique Tolomei, director general de Salvago Argentina, la filial local de la desarrolladora española Salvago.

La firma acaba de cerrar un acuerdo de asociación para el mercado argentino es uno de los pocos mercados inmobiliarios del mundo que no están apalancados, con lo que no se corre el riesgo de una burbuja que estalle. Y en el caso de los créditos hipotecarios, está claro que los últimos hechos van a retrasar el acceso al financiamiento para muchos potenciales compradores de clase media, aunque igualmente no es un público que se perdió, ya que desde hace varios años este segmento de la población no tiene acceso al crédito", señaló a LA NACION Enrique Tolomei, director general de Salvago Argentina, la filial local de la desarrolladora española Salvago.

La firma acaba de cerrar un acuerdo de asociación para el mercado argentino con el grupo Eidico y juntos, entre otros proyectos, impulsan la construcción de tres torres para clase media en el barrio porteño de Caballito. "La idea es comenzar con este proyecto en 2008", manifiesta Tolomei.

A diferencia de otros países, como España o Estados Unidos, por caso, donde la suba de precios de los inmuebles se explica por la facilidad para acceder a un crédito hipotecario, en la Argentina la mayoría de las operaciones se realizan al contado, con dinero fresco, toda una novedad en el sector de los inmuebles.

Demanda local en alza

En la misma línea, el empresario argentino Carlos Molinari -que tiene en marcha distintos proyectos de inversión en la ciudad estadounidense de Miami- destaca las diferencias entre el mercado inmobiliario argentino y el norteamericano, este último afectado en desde hace varios meses por una crisis bursátil que dejó un interrogante sobre el mercado inmobiliario.

"La gran demanda local y externa que se produjo en las principales ciudades norteamericanas elevó el valor de las viviendas en alrededor 200 por ciento, aumento que no fue parejo con el de los salarios. En la medida en que el mercado argentino mantenga la razonabilidad de los valores va a continuar creciendo porque hay una demanda real insatisfecha", explicó Molinari, que acaba de ser designado presidente de la flamante oficina local de Developers & Builders Alliance (DBA), entidad que reúne a los principales desarrolladores inmobiliarios de los Estados Unidos, incluidos Donald Trump o Michael Dezer.

Más allá del impacto local de la crisis internacional, la lectura del futuro del sector que hacen los desarrolladores locales y extranjeros es que el mercado inmobiliario argentino repetirá el modelo de crecimiento que tuvieron otros países de la región.

"Algunos inversores, sobre todo de origen brasileño, ven una gran oportunidad en el sector residencial local. Su visión es que la Argentina debería seguir la evolución que tuvieron los mercados de viviendas en Brasil o México en los últimos cinco o siete años. En este periodo, los jugadores más importantes cambiaron, se profesionalizaron y accedieron a los mercados de capitales", explica Federico Weil, presidente de la desarrolladora local TGLT que se acaba de asociar con la empresa brasileña PDG Realty.

Ambas empresas proyectan una inversión de 100 millones de dólares en proyectos residenciales en la ciudad de Rosario y el norte del conurbano bonaerense.

El desarrollador inmobiliario argentino Issel Kiperszmid, por su parte, destaca que gran parte del renovado interés de los extranjeros -ya sea grandes desarrolladores como pequeños inversores- se explica por los precios atractivos en dólares que continúa ofreciendo la plaza local.

"A pesar de que la volatilidad de los mercados trajo una crisis de liquidez en el mundo, para los europeos el mercado inmobiliario argentino ganó atractivo, ya que en los últimos 90 días hubo una baja del 15% en euros de la propiedades locales, como producto de la devaluación internacional del dólar", explica el presidente de la desarrollador Dypsa.

Kiperszmid, que entre proyectos participa de la construcción del hotel Alvear en Puerto Madero, explica que el interés de los pequeños inversores europeos es acompañado por la llegada de empresas desarrolladores, principalmente españolas.

"El horizonte de crecimiento de las desarrolladoras inmobiliarias españolas es muy corto, con lo que, al contar con el financiamiento y los recursos técnicos, es casi inevitable un proceso de internacionalización. En este contexto, la Argentina es un mercado relativamente chico y en el que lo poco que llega de España alcanza para hacer mucho ruido", sostiene Kiperszmid.

Por Alfredo Sainz
De la Redacción de LA NACION
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Apartmentsba.com
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Username: Saint

Post Number: 255
Registered: 5-2005


Posted on Friday, November 23, 2007 - 10:02 am:   Edit PostPrint Post

FYI for those interested, this was taken from a recent story on real estate on Buenos Aires in a prestigious real estate magazine in the UK.

International Homes Magazine
December 2007 Edition



"Few economic revivals have been quite as stirring as Argentina’s. Little over five years ago the country’s massive external debts brought on a full-scale depression, the peso became virtually worthless and millions of Argentines saw their banked savings disintegrate. Much has changed since – Argentina’s economy has rebounded strongly with annual GDP growth of around 5%, and it has been given the all clear from the IMF for the next decade – but general mistrust of banks remains. This has served to back up by an age-old Argentine conviction that true wealth lies in a tangible asset such as land, not money. In Latin America’s second largest country you truly are what you own.

By this measure Michael Koh of ApartmentsBA.com is one of Buenos Aires’ major players. Originally from the US, he has been at the forefront of the capital’s property market for the last five years, securing properties in BA’s emerging locations, renovating and reselling them for excellent profit as small-scale rental businesses. “Back in 2002 when I started looking at bringing money into Argentina people told me I was crazy,” says Mr Koh, “but I saw the potential of the economy, the real estate market, the exchange rate and tourism. All my forecasts have been spot on.” He cites as an example an apartment he purchased for $90,000 (£44,200) in 2004, which recently sold for $200,000 (£98,300).

Since late 2006, property values have continued to rise across the city. “While rates are plummeting in the USA due to sub-prime mortgage problems, prices in Argentina are soaring,” explains Mr Koh. “Just about everyone buying real estate is paying with 100% cash over the table so interest rates aren’t a concern.” Fast-growing areas include Recoleta, known as BA’s Mayfair, and Palermo Soho, Viejo and Hollywood. “These neighbourhoods continue to see strong demand and price growth as well as growing numbers of boutiques, restaurants and cafes,” says Mr Koh. “They’re trendy areas that attract tourists and locals alike and are a developer's dream. You can buy property for under $2,000 (£980) per m2 and I believe a ‘double’ could happen in Palermo within five to six years. Recoleta, meanwhile, will always be the safest and most affluent part of the city.” Apartments in the latter can cost in excess of $200,000 (£98,000) but see high rental demand. The renovated docklands of Puerto Madero are a former hotspot and one of the most expensive places in the city. With an average property price of $4,000 (£1,960) per m2, Mr Koh thinks the area is unlikely to match its past growth rates."
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Apartmentsba.com
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Username: Saint

Post Number: 287
Registered: 5-2005


Posted on Tuesday, December 25, 2007 - 3:52 pm:   Edit PostPrint Post

For all of you buying new construction real estate in Argentina know the terms and read the contracts VERY carefully. Last week I negotiated the purchase of several apartments in a new construction project. I had negotiated all the terms and conditions and I noticed on the contract they tried slipping in an "inflation clause". The clause read such that it said that the "buyer agrees to pay up to a 20% inflation premium if inflation continues to go up before the project was finished". Obviously I walked away from that deal but note that the realtor never said anything about this clause and they tried slipping it in the boleto. Now, those of you that have purchased before know the boletos can be many many pages so make sure you know the terms and conditions.

Also, note that on new construction projects where they are set up as a "Fideicomisio" even if the clause is not specifically in the contract they can try to argue to get the investors to pay more than the initial price agreed.

I predict you are going to see some problems in the future if inflation keeps going up. Why? Because the buildings/constructors are pricing in u$s dollars and all their expenses are in pesos. Salaries, building materials, supplies, furnishings are in pesos. They can face a "double whammy" if with inflation everything goes up and then you have the exchange rate going against them. It could be a huge swing against them so go into speculation projects here carefully.
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Roberto
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Post Number: 1422
Registered: 12-2004
Posted on Wednesday, December 26, 2007 - 2:06 am:   Edit PostPrint Post

Like Michael said, read very very carefully all contracts. However, -if I may add- don't dismiss this clause too quickly as it has been really a common one in ALL contracts including and specially in lease agreements and rentals. It may have been dormant for the better part of a decade+, but if inflation is back then, this clause will be back in full force.

Mike, I only wanted to insert these lines because many -if not all- participants here do not have a long enough history of living locally thus are not aware of how argentines have gotten used to living day in and day out with inflation. During the early 90's Menem's economic program wiped out inflation which has been kept at single digits ever since (aside for the latest manipulation in numbers). But any argentine older than 35 has had direct contact with this problem and knows how devastating it can be.

I remember my dad collecting annual rental payments for his apartments during the 70's in coins. You read correctly, COINS! This happened because rentals were freezed decades before. Given that most people feel inflation is back, you really can't dismiss this clause. Better to negotiate a compromise. Almost ALL the rental contracts I have seen before I left in 1990 had a similar clause. Just make sure is not lopsided to benefit one party only.

(Message edited by admin on December 26, 2007)
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Apartmentsba.com
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Username: Saint

Post Number: 288
Registered: 5-2005


Posted on Wednesday, December 26, 2007 - 7:52 am:   Edit PostPrint Post

Absolutely Roberto. You made an excellent point. That is why I mentioned it. I agree with you that not everyone knows what went on in Argentina in the early 90's or before. Many foreigners are moving to Argentina as they think it's "Paradise" with no problems and they are sadly mistaken. There are hundreds of other examples like this. My point of posting it (as always) was to educate the public about this type of thing going on. Like I said before, LOTS of new construction huge projects going on right now could face problems as they are not prepared to deal with future possible inflation and a change in the exchange rate as these projects take YEARS to finish.
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Benco
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Username: Benco

Post Number: 34
Registered: 4-2007
Posted on Wednesday, December 26, 2007 - 10:12 am:   Edit PostPrint Post

A few more words on rental contracts and inflation...

Although by law the indexation of rental contracts is not allowed, in reality most contracts will adjust for inflation. It is done by agreeing on the whole sum to be paid for the full time of the contract (three years for commercial use, two years residential), and then specifying the terms of payment such that you pay a higher amount every year. The crucial point is however that there are no adjustable rates, it is all fixed in the contract.

Nevertheless in my contract I have a clause that would permit renegotiation of the rent in case of an economic emergency situation - it was some strange formulation and I was worried about what it meant in practice, so I talked to a lawyer. He told me that in court the clause would not be valid, but also pointed out that there are often voluntary renegotiations - if you agree to adjust the rent you get a new contract for another three years, if you do not agree you might risk that the landlord does not renew your contract in the end.

I was worried about unjust rises in my rent, but clearly I understand that the landlords ask for protection against hyperinflation, which can hurt them badly, as Roberto pointed out.

I would say the problem is actually not inflation itself, but the unpredictability of inflation. If everyone knew it would be 20 percent for the next ten years, we would all adjust to it and it would have no real effect. The damage is done by the uncertainty that makes planning so difficult and that leads to investors asking for higher risk premiums.

In normal real estate purchases I assume there are no problems with inflation since the time between Boleto and final payment is not too long. In construction projects it is for sure a completely different situation.

While inflation is a problem for everyone and a suitable clause in a contract may help to find an agreement, there is really no excuse for trying to slipping in a special clause without discussing it openly. So Apba, I understand that you walk away from a deal when they try to cheat you - you never know what else they are going to try.
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DAN
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Username: Crazygaucho

Post Number: 25
Registered: 7-2006
Posted on Wednesday, December 26, 2007 - 11:05 am:   Edit PostPrint Post

apartments BA Roberto and everybody excellent points about inflation!!!!!! I remember in the late 80's (before I went back to the USA) I was renting a pretty decent house and because of inflation at one point the rent was the equivalent to a couple kilos of meat . My landlord was a retired old guy and this rent was the only supplement income he had aside fron his pension imagine that !!!!!! of course I fell sorry for the guy and every month i was paying more than I had to by law ....... right or wrong I learn that from my Dad that back in the late 70's we had a restaraunt and the same thing happened and my Dad was paying the owner more than we have to ..... but when we had to renew our contrat the owner was also pretty fair to us ...... but I don't think many people will do that, and also see the timing late 70's late 80's Roberto comment about his father in the 90's ..... so all I can say, be really carefull doing bussines here, to me Argentina it's like a very good loking woman but not very loyal, just have fun with her, enjoy it while it last but,
never trust her...... happy new year to you all
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Leandro
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Username: Leandro

Post Number: 5
Registered: 12-2007
Posted on Wednesday, December 26, 2007 - 2:05 pm:   Edit PostPrint Post

Hello all, we congratulate Michael Koh by providing your knowledge here, I am a real estate agent (martillero public corridor of commerce) in Mendoza, agree on every one of your opinions. Provide information and knowledge to other people in this forum demonstrates an act of greatness from you.
With regard to the values of real estate values will continue to increase for the year 2008, inflation and economic growth helps to increase the price, but beware the values of houses, apartments and buildings for high society with large amounts money goes down a little. This year is aimed at the construction of properties to ensure that the middle class of society can come to enjoy their property so the government is considering various alternatives so that they can buy.
Aca in Mendoza there is a lot to do and sell, fields with vineyards, wineries, wine and live off the mountain is what we are looking for more, it is a matter of searching and know there is much to sell simply to find a good real estate agent to give to him all the information you need to be satisfied.
With regard to corruption, good as it is everywhere there is professional good and bad, what is happening and I say this to all foreigners is not so much trust and said here are cash transactions it is required to be very Carefully looking for a good real estate agent, lawyer, notary public, and counter to transmit confidence and good person is not going to have problems.
Happy new year to all. From Mendoza
Leandro Suarez
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Apartmentsba.com
Advanced Member
Username: Saint

Post Number: 289
Registered: 5-2005


Posted on Wednesday, December 26, 2007 - 2:39 pm:   Edit PostPrint Post

Roberto,

I'm certainly not saying to "dismiss" an "inflation clause". My anger was because they mentioned nothing about it before and I only spotted it by proof reading the boleto which I always do before I hand it over to my team of lawyers and Escribanos.

The other big problem I have with this is in many of the cases I'm seeing and hearing it's very vague. Who determines the inflation rate? How is it calculated, etc. The government has their own problems with determining true inflation so I don't really trust private parties.

Another problem I have is that certainly builders would NEVER agree to discount or give money back to an investor if the price went down or the cost got cheaper for them. So why should an investor agree to pay more? It goes both ways to me. The builder has an inherent risk by taking on a building project. If he has a "risk" of inflation my personal opinion is he should price it higher to begin with and if he can sell it it means it's still fairly valued. If not, it means it's not.

Benco and Dan - I like your examples about the rents and the examples you cited. I certainly do understand the relationship between a good renter and property owner. I'm a good example of that. Although I own many properties throughout the city, I don't live in any of them. Why? Because I can make much more money renting out my owned properties vs. living in it. I can take the $500,000+ it would take to purchase my property and buy properties and make much more per month renting them all out in short-term rentals. Even accouting for monthly operating expenses, taxes, etc. I still can make far more income renting them out and taking the proceeds and renting a fabulous flat in the best area that is much bigger and much more luxurious.

The owner of my current apartment that I've lived in for over 3 years now at first was very difficult. He didn't know me. I had to not only get a guarantor to co-sign with me (he wouldn't allow me to use any of my personal properties) but I also offered to pay 1 year in advance to get the price down a bit. After a year he saw that I was a model tenant. Treated the property very good and he had no risk. My lease was a 2 year lease. Rental rates have skyrocketed since I first leased it. When the 2 year lease was up he was very anxious to lease to me again as we had a mutual trust in one another. Although the prices of rents skyrocketed, he didn't raise my rent as much as he could have. Make no mistake, he DID raise it significantly but he could have found someone to pay more as it's in the most desirable part of Buenos Aires (Avenida Alvear). We enjoy a great tenant/owner relationship since that first year that I finished.

Leandro - Thanks for your very kind comments. As I've always posted for many years, I truly believe in the power of message boards and I have contributed to many message boards since the Internet started. I believe as long as you are posting intelligently it does so much positive overall for everyone. We don't all have to agree but I truly believe if you are respectful on a public message board (no matter what your opinion may be) it provides a tremendous amount of good overall for society. Much information can be taken and that in turn spurs more good activity.

I wish a happy holiday to all. Greetings from the sunny beaches of Brazil.

Mike
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Leandro
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Username: Leandro

Post Number: 6
Registered: 12-2007
Posted on Wednesday, December 26, 2007 - 3:06 pm:   Edit PostPrint Post

Hi Mike, as you decis learn a lot in the forums on comments from the participants, which I like a lot. One taste and you need any consultation I am at your disposal.
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Roberto
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Username: Admin

Post Number: 1424
Registered: 12-2004
Posted on Wednesday, December 26, 2007 - 5:43 pm:   Edit PostPrint Post

I got it now, Mike.

And I thank you for sharing so much information. Yes, the devil is in the details... which apparently some people like to hide.
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Gloria Melgar Estevez
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Username: Glorita

Post Number: 22
Registered: 12-2007
Posted on Thursday, December 27, 2007 - 12:28 am:   Edit PostPrint Post

Hi everyone. I like to jump in here and talk a bit about Argentina's inflation. Well, as an Argentine I can say that the Argentine pyche is haunted by inflation. And not only inflation but hyperinflation. It is perhaps one of the greatest evil to befall this country. By 1990, Argentina had been through almost a dozen cycles of hyperinflation and reform. Those that are 40 and older in Argentina have this set mentality of inflation being a given. When inflation becomes so ingrained in a society, it fosters complete distrust in the government. This then leads to people turning to defense mechanisms to protect their wealth from run away inflation. So, as ApartmentsBa points early in this thread, Argentines turn to "bricks"....more wealthy Argentines will hold bank accounts overseas(capital flight), and less wealthy Argentines take whatever money they can spare and buy US dollars(don't know if this is now changing however due to the Euro being a stronger currency). Another common defense mechanism is what you all have been talking about....contracts that adjust to inflation. I once read an article of such practices..."indexation of contracts and payments"....this practice is put in place to compensate for price levels, so said this article. But I was unaware that this is not brought to the attention of the buyer before a contract is signed. Yet again,I learn something new.
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WTMendoza.com
Member
Username: Welcometomendoza

Post Number: 88
Registered: 7-2007


Posted on Thursday, December 27, 2007 - 1:39 pm:   Edit PostPrint Post

Mike thanks for sharing that fairly common manuever during ramping-inflaion times over the years, and yes Gloria is so right about this pyche. It is so self-perpetuaptiiong (and destructive). We seem to be at a crossroads here in Argentina. Now tht the 20% number is pretty much acknowledged, even a year a ago when they said it was 8 but much was 20 or more anyway.
So now the 20% bandwagon seems to be in crusing gear and everyone is jumping on. Again. Just like over the decades. No wonder everyone predicts 10 year cycles these days. Wonder if Cristina can navegate out of this one, but it's going to take the Argentine consumer to battle it also. Meanwhile, pad your budget as much as possible, but have fun too.
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Apartmentsba.com
Advanced Member
Username: Saint

Post Number: 333
Registered: 5-2005


Posted on Tuesday, January 22, 2008 - 1:33 pm:   Edit PostPrint Post

I always knew that the Kirchner's owned several pieces of real estate that they were renting out. This is very common for wealthy families here and especially politicians. (it's one of the reasons I was so comfortable buying up real estate here). It's unlikely that the politicians will pass any laws that affect themselves, their friends or their families.

I didn't realize that his holdings were so extensive. According to Nestor's sworn asset statement (as posted in the newspaper) his holdings include 19 houses, four apartments and two shops. He is renting all of them out. It states he received 5.2 MILLION pesos in 2007 for these properties.

However the opposition Civic Coalition is requesting an audit. (I doubt they will get very far as his wife is the President) but it was interesting to see these same properties in 2005 he received 276,793 pesos; in 2006 1.3 million pesos and then in 2007 5.2 million pesos. A 1,800% increase over 2005.

Still, not sure how accurate any of this is. It was in the Buenos Aires Herald. It will be interesting to see how this turns out. Rents have gone up since 2005 but not 1,800%.
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Ricardo
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Username: Gromit

Post Number: 11
Registered: 12-2007
Posted on Tuesday, February 05, 2008 - 9:42 am:   Edit PostPrint Post

Hello, Well, I suppose this should be under the title of "A real estate deal gone sour". At closing while reviewing the deed, with the realtor of the seller, the notory ( who the realtor recommended) & translator, we learned that instead of purchasing a house as we had been told we were actually buying a unit with Co-ownership Rules & Regulations that govern the property (Horizontal property). We kept being told by the realtor & the seller, the American, daughter-in -law of the realtor that we had been told that this house, indeed was a unit with two other properties. Having purchased numerous properties over the years this fact could not have escaped our attention. The house/unit needs major renovations so we were reluctant to sign off until we had read this document. We requested to have Co-0wnership rules & regulations interpreted and read to us. These had to be faxed and were a total of 16 pages. By the way, the deed had stated that we acknowledged that we had read them which was false as we did not even know of there existence. The fax & translation took some time, and at one point nearing the end of the document being translated, the realtor told the lawyer, that if we didn't come out and sign off on the deed they would walk. Anyway, there were other issues such as having the deed read the purchase price was 53K lower than the actual sale price to save paying taxes. Not a big deal as we had heard of this but were concerned about the future ramifications with being illegal. The realtor and the seller assured us that there would be no problem and we remained skeptical. Another issue was that the broker was charging us 5% of the purchase price, when he was representing the buyer, his American daughter-in law who is a resident. We decided to walk away when there was no compromise from the broker on his fee. Just felt that there was just too much hair on the deal. we ended up having to pay the lawyer about 3K and the translator about $200. Plus we suspect that we will not see the 4k that we put down as a deposit. Any insight, advise would be appreciated so we may approach the next purchase more informed.
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Apartmentsba.com
Advanced Member
Username: Saint

Post Number: 353
Registered: 5-2005


Posted on Tuesday, February 05, 2008 - 10:15 am:   Edit PostPrint Post

Ricardo,

I can't tell you how many emails and phone calls I get per day by both locals and foreigners that had "real estate deals gone sour". As I have always posted and said for the past 6 years, investing in Real estate in Argentina is extremely complicated and you really need to know what you are doing. There is so much red tape and hurdles to jump through to make sure everything is done properly.

What you described is not uncommon. Some lessons you can learn is to NEVER use the Escribano recommended by the seller's realtor. You always want an independent force working for YOU and not the seller. Many times sellers want to use their friend or family member who is an Escribano. Always avoid this!

Real estate here is complicated and NO ONE can argue against me on this point. Consider the fact I have locals that have lived here all their lives that still retain me to help them buy investment property as they don't want problems. That gives you an idea how worried they are.

As you mentioned, I've seen seasoned and experienced real estate investors in other countries do things here in Argentina they wouldn't do back home. They do less due diligence here even through there are far more risks. I'm not sure why.

Remember before you make an offer to always see the condo rules & regulations. If you plan to rent it out make it conditional in the offer that the offer is subject to nothing prohibiting short-term rentals. ALWAYS make it conditional on it passing an architect's inspection to verify there are no structural problems, no electrical/gas/plumbing problems. No humidity issues.

I don't know all the details of your situation but you can certainly get out of the deal and get your reserva back if they are forcing you to record a false and lower price on the title deed. This is technically illegal. Although it's routinely done here in Argentina and it's widespread it's still not legal so if they are forcing you to do this, you can walk away and get your reserva back.

A realtor can charge 5% (although that is higher than the 3% - 4% that is normal). I have seen 5% commissions before on commercial properties but it's not normal but if they told you about it ahead of time and you agreed about it, no use crying over that point now.

Also, I'm not sure why you paid the lawyer $3,000. That is quite a bit to pay for not going through with the deal. There might be some legitimate fees for the lawyers time ordering certificado de dominios and other paperwork but certainly NOT $3,000.

I'm not sure if this is both sides of the story as I always find there are 2 sides to every story but if what you posted is true, you can easily get out of the deal and get back your reserva that you left.

My suggestions would be you talk to the Escribano and the realtor and tell them you will talk to AFIP and also the Colegio de Escribanos as the Escribano can lose his license for declaring a lower purchase price. The thing you need to keep in mind is they can then say they will go through with the deal at the full purchase price so you need to be prepared for that.

It cuts both ways though. If you agreed to list a lower price so you would save taxes as well that makes you guilty as well. You can try to blame only them but if you originally went along with that you need to accept some responsibility as well in this. Still, you could use that to get back the reserva. Definitely there are legal ways you can force the refund of your reserva if they are being shady on this deal.

Typically with an Escribano the threat of reporting them to AFIP and the Colegio de Escribanos is enough to "keep them honest".

Good luck. Let us know how it turns out. Best.
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Ricardo
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Username: Gromit

Post Number: 12
Registered: 12-2007
Posted on Tuesday, February 05, 2008 - 11:45 am:   Edit PostPrint Post

Thanks for your insight. I would like to clarify that the realtor nor the seller disclosed to us at any time that this house was part of a three unit property nor did they at any time come forth with the Home Owners Rules and Regulations. We only learned this by reading the English translation of the deed at the closing. It was then that the realtor & his daughter-in-law insisted that we had been told. At that point, we insisted that they be faxed to us and translated. In retrospect I believe we trusted the realtor because the seller was a young, very personable, seemingly principled American.
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Apartmentsba.com
Advanced Member
Username: Saint

Post Number: 354
Registered: 5-2005


Posted on Tuesday, February 05, 2008 - 12:02 pm:   Edit PostPrint Post

Ah...if you cancelled right at the last minute (which it sounds like you did) then the Escribano would be entitled to charge his fees as he did all the work for the closing and if you backed out at the closing then I would agree with him that you would owe his legal fees as he did all the work already.

Also, you should have done all your due diligence before the closing date was set. If you were not reading the condo rules until the actual closing that is a mistake on your part. You should have done all the due diligence ahead of time before you scheduled the closing date.

The thing is, real estate in any country is to be taken very seriously and it sounds like you made some serious mistakes as well. It might be a blessing in disguise losing this initial reserva funds. A few thousand dollars is nothing and a small price to pay to walk away from a real estate deal that you don't feel good about. I own several pieces of real estate in different countries and some of my best decisions were walking away when I didn't feel right. I rarely do it as I do a lot of due diligence ahead of time but sometimes losing a few thousand dollars is a small price to pay to avoid a big mistake.

I think you will agree that you made some simple mistakes that you won't make again in the future. I'm not saying you can't trust realtors here but from my vast experience buying a few hundreds of properties in Buenos Aires, you must ALWAYS do a lot of due diligence on the front end. I've walked away from a LOT of deals as it just was too shady.

Remember that nothing replaces good due diligence. Granted most people that are foreigners don't have the time needed to dedicate to do full due diligence on a property here in Buenos Aires but that is why you MUST have your own lawyer working for you answering all your questions or hire a reputable consultant. You wrote, "very personable, seemingly principled American". You know what? There were some nice executives at a company called Enron. Very personable, highly educated and seemingly principled. The CEO told his employees to "trust me... the company is great and keep buying the company stock". We all know what happened there.

Also, MANY Americans had very pleasant and seemingly knowledgable real estate brokers that where telling them to get an ARM (adjustable rate mortgage) and it is good for them and the best option. At the closing, the people buying didn't read all the documents and just signed where the nice seemingly knowledgable realtor told them to sign marked with convenient X's. Many are trying to blame their realtors and mortgage brokers (which I admit they share in the responsibility) but there is no one more to blame than the people that didn't do the due diligence required and purchased something that they didn't fully understand.

Remember when you are buying real estate in another country it's a very serious matter and you MUST know all the laws inside out. It's tough enough understanding real estate in your home country let alone a foreign one. This is a good lesson and maybe a cheap lesson for you. Yes, it stings but as I mentioned, it might be a blessing in disguise.

Good luck.
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Arial
Intermediate Member
Username: Arial

Post Number: 151
Registered: 10-2006


Posted on Friday, February 15, 2008 - 4:41 pm:   Edit PostPrint Post

Can any of you give me information or your impression of Mar del Plata? The security zone official I talked with suggested looking at Mar del Plata, said it is a strong tourist area like Bariloche. But it is that way most or all of the year? Others have told me to be sure to see Mar del Plata. Going to make a run down there and have a look while I wait for my papers to be completed.

I read that it is a convention center, etc. But I wonder if it is as seasonal as some have said Punta del Este is. How do temporary rentals work there?
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Roberto
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Username: Admin

Post Number: 1529
Registered: 12-2004
Posted on Wednesday, February 20, 2008 - 12:05 am:   Edit PostPrint Post

Mar del Plata is probably the #1 tourist destination in Argentina. During summers (mostly Jan/Feb) over 3.5 million people visit, about 6 1/2 times its stable population of 550,000 and twice the size of Bariloche. It is by far the largest beach (city) we have and activity increases exponentially in these months. Make sure to visit the surrounding areas which may have all of the good and none of the noise (Loma Alta, Chapadmalal > http://www.mardelplata.gov.ar/indexnw.asp?ID=93020 10000&SEL=9302010000)

Good luck!
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Arial
Intermediate Member
Username: Arial

Post Number: 218
Registered: 10-2006


Posted on Wednesday, May 21, 2008 - 4:28 pm:   Edit PostPrint Post

Does anyone have any idea how the recent events there will affect the real estate market? Is it likely to make it difficult to buy because people are afraid to sell because of inflation?

Our friend in Viedma has been keeping us informed by phone about what is going on around her, about the fear, people taking money out of the banks and so on. At that rate, if they sell, what will they do with the money? In their place that would be my thought.

Just wondering if anyone has any idea how this might affect real estate.
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elina overstadt
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Username: Agustina

Post Number: 24
Registered: 3-2007
Posted on Wednesday, May 21, 2008 - 5:11 pm:   Edit PostPrint Post

Residential real estate is tight in the Capital and suburban zones. I believe there are 2 reasons. One being because laws have been enacted that require someone when selling through a real estate agency to declare the selling price. This interface (COTI) talks to AFIP. This makes it more difficult to settle a large portion of the selling price in black and will make it more difficult for the new owner when he sells it to sell it(officially)for something that doesnt relate to the basis cost. These are steps to make it business more transparent. As far as economic uncertainity, real estate overtime has always been a relatively safe place for keeping wealth. Unless people can get their money offshore or in Euros and stick it under their mattress..real estate seem to be a good place for now.
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Apartmentsba.com
Advanced Member
Username: Saint

Post Number: 490
Registered: 5-2005


Posted on Wednesday, May 21, 2008 - 5:54 pm:   Edit PostPrint Post

Elina is spot on target and correct with what she posted. I've always said since 2002 the reasons why real estate investments in good areas in the Capital were a special investment. I took a look at the situation with the HORRIBLE banking system here and what the government did during the crash. People here simply have NO trust in the banking system and probably won't for some time. The banking system here is terribly inefficient, pays very low interest rates and compared to the first world they are like the stone age here.

Locals are still driving the real estate market in Buenos Aires and the prices and always will. It's NOT the foreigners that really affect the prices much. It is supply and demand.

As Elina mentioned, AFIP has been trying to really control the process more and make everything official and "white". They have had that goal for some time now. Laws kept getting delayed but as of June 1, 2008 AFIP is requiring all realtors to declare all properties that they are selling. There is still room for "black" transactions but AFIP is trying to limit it. I for one think it's positive. The biggest problem as a buyer in the Capital I've had is an owner saying, "I won't sell it unless you declare %X less. And keep in mind I've purchased from a few politicians and they are the ones that wanted to declare the lowest percentages!

I've always said with economic uncertainty locals will always prefer to be in US dollar denominated investments and that includes real estate. The locals have always viewed real estate in good areas here as a stable investment. They don't look at it to "get rich" overnight like so many American speculators (i.e. gamblers) that tried playing the real estate "game" in the USA and got burned. Locals look at it more as a flight to safety and something that will produce stable returns for them and uphold their value.

If you look at the past few years you will see that rents have really skyrocketed up. Both for residential properties as well as storefronts in good areas. Rents in 2006 for locals went up 25% and in 2007 went up another 26% in most good areas in the Capital. Some more than that.

With inflation, rents will probably go up in 2008 and 2009 and beyond. Locals in good areas have NOT had a problem renting out their properties. They aren't getting rich off of the long-term rents but that isn't their purpose. Just about every local I know personally that has any sort of net worth here has many properties and they are renting them all out.

I've already mentioned before on this forum how many rental properties the Kirshner's have in Argentina. Several millions of dollars worth of properties and their rentals on them the past few years have skyrocketed. So look to them as an example. Many people really (especially foreigners) never really understood this unique dynamic feature of Argentina and real estate. You'd be surprised how many families own real estate here in Argentina and it's funny to see many have several properties under different familiy members names/DNI numbers. Often times in a family, many names will be split amongst different properties. So the mother will have one property under her name, the father, the son and the daughter.

Also, as I mentioned yesterday, many locals are opening up bank accounts offshore but I think it's only a matter of time before the banking system is one big system. Look at the mess in Lichtenstein and Switzerland where people are getting caught with undeclared taxes. The worldwide banking system is becoming smaller and smaller.

Until these dynamics change in Argentina and I see a better safer investment in Argentina I think buying nice properties in exclusive areas is a pretty good bet for locals vs. other types of investments/options including keeping their money in their banks or their houses. Not to say it's not a good idea to keep some funds outside of Argentina and offshore but you'll find that many here look at properties and real estate as a safehaven. In fact, unlike other areas of the world...I think in the event of a crises here it will make real estate more attractive for locals vs. unattractive compared to other options.

IMHO, some things in Argentina won't change and that includes wealth being measured not so much in what you have on paper but the hard assets you own.
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Arial
Intermediate Member
Username: Arial

Post Number: 219
Registered: 10-2006


Posted on Wednesday, May 21, 2008 - 6:50 pm:   Edit PostPrint Post

What I really wondered is if it may have become nearly impossible to buy or if things are staying the same. From your response, I am inclined to think it might be more difficult to buy.

When I was there in March we negotiated for three properties. One was an apartment in Mar del Plata. The owner had it for sale but does not want to sell until he is buying something else. We tried to buy a farm in Viedma and when we agreed the owner decided he "thought he would keep it for now." In other words, he backed out. Cafayate, as I reported already, when we agreed to the price he doubled it. It seemed to me that they were afraid to sell.

I do remember Apts, that you said the hard part is completing the deal. It has been disappointing to have that keep happening.
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Apartmentsba.com
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Username: Saint

Post Number: 491
Registered: 5-2005


Posted on Wednesday, May 21, 2008 - 7:06 pm:   Edit PostPrint Post

Arial,

No, I wouldn't say it's "impossible" to buy here. It's been about the same. But if you remember what I posted a long time ago...typically here in Buenos Aires the tough thing is NOT typically finding a property you like. It's typically getting through ok on the deal without the owner changing their mind or trying to change the terms.

Lots of owners here aren't that serious. The most frustrating thing for me in the past is that many owners "test the waters" so to speak and they list their property but then when they get an offer they decide maybe they weren't so serious to sell and if they sold, what are they going to do with the money.

I once had a local owner who was a friend of a friend of mine. The ironic thing is I went over to his house..he told me how serious he was about selling and he wasn't going to waste my time and how ethical he was...yadda yadda yadda. Well we are talking about a u$s 600,000 house in Palermo Soho. I found a buyer for it and we agreed to pay asking price on it. We were going to do a boleto on it and 24 hours before the scheduled boleto the guy backs out of the deal. I remember calling him VERY angry and I said, "Mr. X...so much for you being an ethical guy and being a man of your word..". He tried to blame his wife. I was so angry.

Then out of "it's a small world"....about 6 months later I was at a property closing on another deal. It was a multi million dollar deal and it was all cash. The seller of that property did a simultaneous transaction where once I paid him for his property he was buying another property and paying the owner. It was funny as the property he was buying was this house that fell through for my original client. So essentially you had ALOT of people at the closing as once I paid the property owner of the property I was buying, he then was paying the owner of the house HE was buying. It was this guy.

The guy was very embarrased and apologized again to me. Then I asked how much he was selling it for. Turns out $700,000 so in this case backing out gained him $100,000 more 6 months later... I'll never forget that one...

I've had many, many sellers/owners back out of deals. I don't really like doing boletos as even doing a boleto isn't without it's hassles. Legally you are guaranteed to purchase the property by placing the 30% boleto but in the past I've had unethical owners that threatened not to go through on the deal or said, "let's go to court" on this. I always try to do a sena and then go straight to closing but so many require a boleto as they need to buy something else with those funds.

I'm sorry to hear that you are having a hard time but I can tell you from LOTS of experience that this isn't rare here in Argentina. Many sellers list things and they aren't so motivated to sell. Some owners list things to see if they would get an offer and then when it comes they don't end up selling so it sounds like you are experiencing that.

Also, some owners just don't know what they will do with the funds if they sell or other properties they would want to buy they can't find for their budgets so they decide to stay put. It sounds like on the farmland it may be a bit different for you but the sellers backing out is not uncommon here. I really blame the realtors partly as they really need to talk to their clients and make sure they are serious about selling before agreeing to take on a property. It gives a realtor a bad name if this happens over and over. I know there is so much a realtor can do to control their client but I've also had this happen a bit over the years.

Good luck.
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Roberto
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Username: Admin

Post Number: 1676
Registered: 12-2004
Posted on Wednesday, May 21, 2008 - 11:11 pm:   Edit PostPrint Post

> It seemed to me that they were afraid to sell.

Arial, you are probably experiencing another side of our complex criollo personality... more like the schizophrenic part. As Mike stated "... without the owner changing their mind or trying to change the terms." This is very, very common. I have been trying to rent space in BA for the last 3 weeks and the owners keep changing their minds! One day they rent, next day they back out.
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Arial
Intermediate Member
Username: Arial

Post Number: 220
Registered: 10-2006


Posted on Wednesday, May 21, 2008 - 11:33 pm:   Edit PostPrint Post

I am laughing at you Roberto! Schzophrenic, huh? Well, the more I learn the more sense I can make of what is happening. When my son bought in Bariloche there was no problem at all completing the purchase. But ever since then there has been.

Yes about the realtors. I think they should have a legal contract with the owner that includes the price and any terms and they then should be locked in legally to sell at that price if the realtor brings a deposit from a buyer.

But thanks a lot to you both. Knowing all that is really helpful.
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Apartmentsba.com
Advanced Member
Username: Saint

Post Number: 493
Registered: 5-2005


Posted on Thursday, May 22, 2008 - 12:43 am:   Edit PostPrint Post

Yeah..it's common! Sales, renting, you name it. I think part of it is the locals always think they can get a better deal. From my experience here in Argentina I see here more than anyplace I've been the locals tend to have a short-term mind set. They are so used to getting screwed over by banks, government, heck...even friends....they have a short-term mentality that wants them to try to get the best deal NOW. They don't really think in terms of longer term mutually beneficial or long-lasting relationships. It's more like "tomorrow may not come, I may never do business with this person again so even if I have to change my mind or change the deal 10 times... I'll do whatever is in my best interest".

My best relationships I have here in Argentina (lawyers, accountants, banks, architects, vendors, etc) have been with people that I've showed it makes sense to think more in terms of LONG term relationships where both sides benefit.

Arial - I'm curious as you said your son bought in Bariloche. Is he a permenant resident here in Argentina or did he purchase setting up a trust or corporation?
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Gloria Melgar Estevez
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Username: Glorita

Post Number: 88
Registered: 12-2007
Posted on Thursday, May 22, 2008 - 9:58 am:   Edit PostPrint Post

Roberto, you are so right in bringing up the schizophrenic component in us Argentines...you made me laugh out loud!! My mother and her brothers and sisters have been having many schizophrenic episodes conserning the lands, and properties their father left behind. Now, to really appreciate how schizo they all are you must take into account that my grandfather passed away in the 1970. There have been many fights and many many times the properties have gone up for sale, or were about to go up for sale(in other instances), and always there is one of them who jumps out and stops it all.
I do agree with Mike in that a lot of people have no idea what they will do with the money if they do go through a sale of a property. For many Argentines selling a property represents all of their lives savings.
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Apartmentsba.com
Advanced Member
Username: Saint

Post Number: 494
Registered: 5-2005


Posted on Thursday, May 22, 2008 - 10:33 am:   Edit PostPrint Post

Gloria,

Your post is accurate and something that I've seen in MANY MANY property closings (escrituras) over the past several years. Many of these properties that I buy are passed on from family member to family member. Many times a property represents almost the "history" of the family and as you mentioned, it also represents their life savings.

It's been ugly at a few closings. Some of them really stand out to me. One was 3 years ago when I bought a REALLY old and decrepit house in Palermo Soho. I wanted to knock it down and just bought it for the land. In the house there was barely any electricity and many rooms had water leaking from the ceilings. Yet, when I went to see it the 95 year old couple showed it to me with such pride and said they lived in it all their lives.

I remember feeling sad that they lived here all their lives and the first thing I was going to do was knock the house down. I found out shortly after that.....the motivation behind them selling was they were just so old and they couldn't care for themselves too well so a few of their children offered to have them move in to their homes. I always thought maybe these were loving kids. That was FAR from the truth. At the closing it was a circus. We were in this bank and there was no conference room. It was a joke as the public could see through the glass windows us counting the money and everyone standing in line as well.

There were 5 kids and they were all fighting and like a pack of wolves waiting for the money. It seems they told their parents that once they sold it, they would split the money between them. On the day of the closing the father was so sick that he had to rush to the hospital and wasn't breathing well. Had an oxygen tank. I told my Escribano we should delay the closing to wait until he got better and half his family wanted to wait and the other half were brutally honest and said they wanted to close that day as if he died it would complicate things and they needed THEIR money. I couldn't believe it.

They sent the Escribano to the hospital to get their dad's signature (even though he could barely sign). At the bank, I've never seen anything like it.... The kids were fighting and yelling at one another. They were yelling and screaming for each kid to get part of the money. I calmly told them I'd pay the lawyer and then he could distribute it. You should have seen the lock in their eyes. Pure evil.

After that closing I had a really empty feeling. Here was a house this old guy probably worked his entire life to get and at the end while he was laying in a hospital bed his kids were all fighting over the money like a pack of wolves.

I had the same feeling that day as I did after watching the movie, "There Will Be Blood". Very empty and sad to see the power of greed.

Over the years I've seen lots of things as Gloria mentioned where the kids can't decide and the property gets taken off the market after an agreement is made but I'll never forget that property closing of that lot I bought at Pasaje Russell.
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Gloria Melgar Estevez
Member
Username: Glorita

Post Number: 89
Registered: 12-2007
Posted on Thursday, May 22, 2008 - 11:04 am:   Edit PostPrint Post

Mike, you can write a soap opera with all the schizophrenic scenarios you have had to spectate. My grandfather must have turned in his grave many times now seeing the fights between his kids. To add salt to the wound, last year my grandmother passed away and so their is no longer a mediator. My mother is of the opinion that if the properties stays in the family so that the three siblings that still live in Argentina are the "only" ones living in the properties and they maintain the properties, that they should not sell. What happens to my mother is what I believe(and you mention in your previous post), happens to many Argentines which is that these properties and lands represents the memory of their past and their parents and grandparents.
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Apartmentsba.com
Advanced Member
Username: Saint

Post Number: 496
Registered: 5-2005


Posted on Thursday, May 22, 2008 - 11:25 am:   Edit PostPrint Post

Gloria,

Absolutely I could write a book. Almost NO property closing doesn't have some kind of story. I wish it was boring and there were no story involved but many do have some crazy story to it.

Another is an old property I purchased in Recoleta on Pacheco de Melo. The owner was a VERY famous musician here in Argentina. We had to wait almost a year as during the closing he was going through a divorce from his wife in Spain and it got really messy and she was entitled to half of those proceeds. We did a boleto which guaranteed us the right to purchase it. It was frustrating waiting the year as I wanted to start extensive renovations on the property. However, the good thing is the property value appreciated about 20% during that year.

The lawyer (who had power of attorney to sell for this musician) kept trying to get out of the deal saying the property values have gone up. I kept telling him we have a legal document for $X price and the delay was his client's fault. Well, at the end of the story on the day of the escritura imagine our shock when this lawyer says flat out.... "I won't sign the closing papers and I'll hold this up indefinitely unless you give me u$s 2,500 right now under the table". And he was going to Europe that week and wasn't coming back for a while..... (There IS a reason why Argentina consistently ranks on Transparency International's list of one of the most corrupt countries in the World).

Now, I'm almost sure this musician didn't know what his own lawyer was doing but these are the kinds of things that do happen in Argentina. This is a totally true story. So yes, Gloria...I COULD write a book about my experiences on property closings alone......

As far as what you mentioned...yes I'm sure your mother feels a bit of nostalgia for these properties. It says a lot about her that she has these feelings and the hard work that your family probably went through to buy these properties in the first place. To most investors....they have never stepped foot in their investment properties or they don't after they buy it. They will sell it when they feel it's a good time to "cash in". For these locals the property represents something entirely different. It was their "homes" so many families always acknowledge that but in the end as well I still think many have the attitude..."if I sell....what am I going to do with the money that will be as safe".....
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Gloria Melgar Estevez
Member
Username: Glorita

Post Number: 90
Registered: 12-2007
Posted on Thursday, May 22, 2008 - 12:56 pm:   Edit PostPrint Post

Mike,

I do understand the attachment of the "old timers"(like my mother) to their pasts via their parent's and grandparent's properties. However, being a realist, I'm of the opinion that keeping the properties just serves to maintain family strife. In the case of my mother's family things have only gotten more and more chaotic as time has passed. My mother is a very giving and selfless person and I believe her family has taken advantage of her. Her family sees her as "the rich relative" that should not be entitled to anything despite the fact that for the past twenty years she has paid all the taxes on all the properties of which she never lived in beyond the age of 22(when she married my dad and moved away). Unfortunately my brothers and me in conjuction with my cousins will "inherite" this fight. I don't want to some day have to sever ties with my cousins because of our parents.
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Arial
Intermediate Member
Username: Arial

Post Number: 223
Registered: 10-2006


Posted on Thursday, May 22, 2008 - 3:23 pm:   Edit PostPrint Post

This discussion has meant a lot to me. It really changes things when you understand a culture sometimes.

Gloria, reading about your family properties reminded me that the man selling the apartment in Mar del Plata kept going on and on about how that was the last thing left from his grandfather. That man also has a brother. The one that doubled the price in Cafayate--a friendly neighbor there told us the owners had frittered away a huge inheritance, constantly had financial challenges and were now gradually selling land--were down to about 40 hectares. If we had bought the two lots, that would have been 38 left. And who knows. The Viedma farm might have also had a "family" connection. Perhaps it's just a matter of working through many challenges until you finally find the right seller! Now perhaps I know what I am looking for!

Thanks to you all.
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Apartmentsba.com
Advanced Member
Username: Saint

Post Number: 499
Registered: 5-2005


Posted on Friday, May 23, 2008 - 6:32 pm:   Edit PostPrint Post

Arial,

Yes, I agree with you it helps to understand the culture. There was a tremendous amount of wealth created here at the turn of the Century and there after. Also during the Menem years as well. Lots of inheritance and family money but also lots of that money passed on to other generations has been squandered or just swindled by the government, banks, etc. It's one reason why the locals have such a sentimental value on properties. It's hard to gamble away an apartment, or a house or a piece of land. It's not like buying a stock and having it's value disappear or 75% of it gone in a year.

I agree with you it's so vital to understand that part of the culture on the investment side and the 'sale' of it.
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Apartmentsba.com
Senior Member
Username: Saint

Post Number: 531
Registered: 5-2005


Posted on Tuesday, September 09, 2008 - 5:35 pm:   Edit PostPrint Post

I thought I'd resurrect this older post. I remember posting in my last post how real estate here in Argentina is not like losing 75% of it's value in a year like some investments. With yesterday's action on Fannie Mae (FNM) and Freddie Mac (FRE) and today's action on Lehman Bros (LEH) it's more like losing all that value in a single day let alone a year!

Also today I sold one of the apartments I own in Palermo Soho. I loved that apartment. I found it really comforting that I sold it for u$s 270,000 (with the furniture and garage). Much more than the value of the average HOUSE in the USA. This is pretty much how I imagined things would play out a few years ago... As crazy as that sounds....
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Dan Sandefur
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Username: Panamadan

Post Number: 18
Registered: 4-2007
Posted on Wednesday, September 10, 2008 - 8:39 am:   Edit PostPrint Post

This article comment is an interesting analogy or comparison of what is happening in the US now, to what happened in Argentina.
The next Argentine crisis may be in the US, not in Argentina.
-------------------------------------------------- ---------------
“All of the newspapers have missed something,” Chris Mayer kicks off today, with Fannie and Freddie in mind. “They have all missed this bigger point: This huge trend snakes its way through financial history.

“This action by the U.S. government does not really signify any sea change in financial markets. It’s just another step in a long journey on the same path. If you read financial history, you come to appreciate this overwhelmingly powerful trend. As Freeman Tilden wrote in his 1935 book A World in Debt:

“The whole progress of the legislative attitude toward the debtor, from the Roman Republic to the present day, has been steadily, though with occasional backward lapses, toward making debt easier to incur, lightening the burden of carrying and softening the consequences of default.”

“What does it all mean and how does it all end?” asks Chris.
“I suspect we are on a path similar to that of Argentina. One day, we’ll have some major Argentine-style financial crisis. We’ll have Argentine inflation and a similar loss of faith in the banking system and the currency. The government will chew away and destroy a lot of wealth in the process.”
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Living in Patagonia
New member
Username: Soulskier

Post Number: 2
Registered: 9-2008
Posted on Tuesday, September 23, 2008 - 9:53 pm:   Edit PostPrint Post

ApartmentsBA, my wife just did a great article on buying in the zona frontera, you might find interesting.

(Message edited by admin on September 24, 2008)
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Roberto
Board Administrator
Username: Admin

Post Number: 1748
Registered: 12-2004
Posted on Tuesday, September 23, 2008 - 10:06 pm:   Edit PostPrint Post

Soulskier... I liked your Mate article and considered it a valid link. However, in your three posts you dropped 3 links. Perhaps you misunderstood me when I accepted your first link or didn't bother to read the terms when signing up...

I will quickly ban any *new* account that tries to leak traffic out. Most posters who posts links have been part of this fora for an extended period of time and have contributed information in numerous ways, selflessly. I thought that was your case but I am starting to suspect there is an ulterior motive.
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Living in Patagonia
New member
Username: Soulskier

Post Number: 5
Registered: 9-2008
Posted on Tuesday, September 23, 2008 - 11:30 pm:   Edit PostPrint Post

Roberto, my apologizes. I thought I was contributing valid content that was realted to other's questions, such as Apartment's BA question about purchasing property in Bariloche, as a foreigner. I could cut and paste the info if you prefer. Me avisas.
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Arial
Advanced Member
Username: Arial

Post Number: 254
Registered: 10-2006
Posted on Wednesday, September 24, 2008 - 5:15 am:   Edit PostPrint Post

Not only that but I did go to the link. It took me to a portal landing page of articles, books for sale, etc. If the Bariloche article is there, I got tired of looking for it.

This may have been unintentional (anyone can make a mistake) but thanks, Roberto, for keeping the intent and spirit of the forum alive and well!
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Living in Patagonia
New member
Username: Soulskier

Post Number: 6
Registered: 9-2008
Posted on Wednesday, September 24, 2008 - 8:40 am:   Edit PostPrint Post

The link works if it is put in without the spaces. If you would rather me delete it, or cut and paste the information, I am happy to do so. My wife spent a lot of time and research on buying inside the zona de seguridad, and based on prior questions on this thread, I thought the forum would want to see the article.
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Apartmentsba.com
Senior Member
Username: Saint

Post Number: 556
Registered: 5-2005


Posted on Wednesday, September 24, 2008 - 9:13 am:   Edit PostPrint Post

Ariel,

Like you I gave up. I went to the link, took out the spaces and still couldn't find it. Living in Patagonia, can you just cut and paste the article. I'm curious to read it. I know the process about buying down there but I probably won't buy down there even though I'm a permanent resident. I don't generally believe in buying in any area where a foreigner can't EASILY buy real estate under their own name free and clear without having to set up a corporation or a trust. It makes it too complicated to sell it to the next person.

When I buy real estate I look at two things. One is cash flow via rentals and the second is capital appreciation potential. Also, I project out in the future and think about how easy it would be to sell the property in the future. The problem in that area is it's not easy for a foreigner to buy so in turn that makes it harder to sell. I still might buy a place down there for my family and keep it in the family forever but haven't gotten around to it yet.

Best.
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Living in Patagonia
New member
Username: Soulskier

Post Number: 7
Registered: 9-2008
Posted on Wednesday, September 24, 2008 - 9:51 am:   Edit PostPrint Post

The following was written by my wife, Shanie Matthews, for Transitions Abroad, September 2008 webzine. It can be found under "living abroad" section and includes some pictures.

Bariloche, Argentina is one of the last frontiers of decently priced properties, within a land of incredible, untouched, protected natural beauty. The views are intoxicating. A raw landscape beckons the outdoor lover and the bustling city located on the shores of Lake Nahuel Huapi offers a rich culture and international cuisine.

The area of Bariloche is a true paradise. It is a place like no other in the world because of its serenity and national parks. But what does it truly take for a foreigner to own property in the paradise of South America?

Bariloche is within the Zona de Seguridad or secured zone. It is possible to purchase inside this area, but it is difficult to find much data about the process and there is a lot of misinformation floating around in cyberspace. When my husband and I decided that we wanted to move to Bariloche permanently we felt it was in our best interest to do our own homework. We spent months researching this portion of the buying process before taking the leap into owning. In studying the situation, we found that there are certain aspects to the riddle that help in obtaining clearance.

Owning within the Zona de Seguridad, if not an Argentine citizen, can seem to be a labyrinth of a paperwork and bureaucracy. But with the help of Argentine lawyers, companies involved in the process, and submitting the correct paperwork, it is possible.

The Zona de Seguridad was a law that was created back in the late 1800’s because of government concerns regarding the conflicts between Chile and Argentina. It was set up to protect land within 100 kilometers of the Chilean border, the entire length of the country, or another way to look at it, anything west of Ruta 40.The Argentineans wanted to be sure that the land lining their borders was not bought up by foreigners, and, thus, creating a security concern. This law gathered dust until the 1990’s, when major real estate tycoons such as Ted Turner and Douglas Tompkins bought extensive plots of land. Once again, the fear of losing important property to foreigners brought this law back to the forefront.

Currently, with the new Cristina Kirchner administration, the entire cabinet has been changed to new blood. Many people involved in submitting the paperwork and dealing with the process believe that this is a good thing. Our lawyer helping us with the process, Escribania Dalessio who is based out of Buenos Aires, feels that this will eventually help the way in which the law is read. In creating a new Zona de Seguridad cabinet, it is believed that the new department head will be able to help speed up the process, though it is still an unknown at this point. The virtue of patience, which is needed in all facets of life in Argentina, is a true requirement when purchasing within Zona de Seguridad.

The process which can take anywhere from six months to two years, or more, is most easily understood and dealt with by obtaining a professional company to represent the buyer. There are lawyers and notaries that have created a needed business helping foreigners understand what is exactly required to obtain title. For clearance within the Bariloche area the most knowledgeable companies tend to be based out of Buenos Aires. It is extremely important to do the homework on which company would work best for the particular situation and to have the requisite paperwork in order before traveling to Bariloche. The paper trail needed, such as a police report and bank statements, are much easier to obtain while at home, instead of abroad. Also, it is best to start the process as soon as the property is chosen and the down payment has been paid.

The actual paperwork needed depends on each situation. Large plots of land such as ranches and huge agricultural farms, at this time, are slower to move through the process. This is due to more paperwork being needed and being subject to possible environmental studies. Also, a property that has no plans of being improved is not looked favorable upon. But each case needs to show a few details. For example, paperwork from an architect showing plans of improvement or building on the land, clean police reports, as well as displaying that the property is a possible resource of local jobs, will help in the acceptance The bureaucracy likes to see that the buyer is willing to help stimulate the economy. It is important to have these facts in writing and included in the first submission.

Once the property is decided upon, there are four different routes that the foreigner can take. They are as follows:

Fideicomiso: Also referred to as a trust, this is considered to be the safest and most popular of the options out there. The fideicomiso is a corporation or business that is created by Argentines. The trust is set up at the time of putting money down on the property. This is not a way for the foreigner to get around the clearance process, but instead is a way to purchase the property, knowing that they will never be denied ownership of the property because the title is held by the Argentine company. That is not to say that the foreigner is not able to try for clearance on their own while the property is in a trust.

There are reputable companies in Argentina that are set up for this purpose alone. With the fideicomiso, the foreigner is able to purchase the property under the company’s name. There is a special power of attorney (a poder) that explicitly confirms that this is the buyer’s property and that the company has no power over the property without said persons consent. The company, with the owner’s money, is responsible for taxes on the place, as well as paying for any major improvements on the land. In exchange for their services there is a fee, which varies from company to company, but is around US$1500 to US$2000 per year. If the owner of the property decides that they would like to sell the piece before obtaining clearance, they will be subject to the capital gains taxes applicable at the time of sale. Also, any income that may be derived from the property will also be subject to a corporation income tax fee because of being held in a trust.

En Comision: En comision is different than the fideicomiso, in that the buyer has a relationship with an Argentine that they trust. The person purchases the property on the buyer’s behalf, with the buyer’s money. This is all written out in a power of attorney (again, a poder). The poder strictly prohibits the Argentine to sell, rent or do anything with the property. It is also stated that the piece, in case of death of the Argentine native, goes to the foreigner, with this option, the capital gains taxes and corporate income taxes can be avoided. The important point here is that the Argentine is completely trusted, because if clearance is not obtained the property will remain in the name of the said Argentinean. It is extremely important that the buyer move ahead on trying to obtain clearance immediately to show that they are not trying to get around the Zona de Seguridad process.

En Comision #2: The second version of the en comision involves the seller of the property and should only be done if the buyer knows and absolutely trusts the seller. It is the same process as the previously mentioned option. The power of attorney is, basically, the title until clearance is issued. The poder is applicable for ten years. If at the end of ten years an answer has yet to be received, it can be written for another ten years.

Permanent Residence: The fourth option is only applicable to those that plan on living in the country full time and are willing to travel the long road to permanent Argentine residency. According to different companies that we spoke with, after two to five years of permanent residency the buyer of the property is treated as an Argentine citizen. They then go through the regular process that any Argentinean would have to go through to receive clearance.

As stated before, there is a way to work through the bureaucracy madness, if so desired. It just takes patience and an understanding that things do not work the same way as in other countries. When we found our place, with its million dollar view, we knew that we were up to the challenge of jumping through the hoops. For us, it was worth it. Each day that I look out my window and see the sparkling, blue waters of Nahuel Huapi and snow-capped Andes mountains, I know there is no other place on earth where I would rather be.
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Apartmentsba.com
Senior Member
Username: Saint

Post Number: 557
Registered: 5-2005


Posted on Wednesday, September 24, 2008 - 10:04 am:   Edit PostPrint Post

Thanks for sharing. That is in line with my own due diligence down there. Just out of curiosity, which option did you go with? (You don't have to share if you don't want to).

Personally, I'd never buy ANY real estate unless it was under my own name. I've heard of several foreigners that bought down there "en comision" and had problems later.

Also, your timelines are correct although probably more on the 2 year side vs. the 6 month side based on what others have told me that went through the process.

I think to live definitely it's a great place but for investment purposes there are probably other better places. Remember the 6 months to 2 years it takes people to buy....it will also take them that to sell.

I can still buy down there as I'm a permanent resident now but the thing that concerns me is not buying it. It's selling it later when I want to get out of the investment. When I buy any piece of property at the same time I'm buying it, I'm also thinking of my exit strategy at the same time.

Setting up corporations and trusts also have their own issues to deal with. In Argentina buying as an individual you have 0% capital gains taxes when you sell. Buying as a corporation you have a 35% capital gains tax which is a big difference. As well as a whole host of other fees each year. Also, buying as a corporation your taxes on the rental income (if you are renting it out) are higher than at the rate for individuals.

Thanks again for sharing that.
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Living in Patagonia
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Username: Soulskier

Post Number: 8
Registered: 9-2008
Posted on Wednesday, September 24, 2008 - 10:24 am:   Edit PostPrint Post

Apartments Ba, I don't mind sharing. I think that is the beauty of forums like these, to share experiences in this crazy country.

We actually we were very lucky and had mutual friends of the sellers, so we did a special power of attorney and boleto, that keeps the property in the seller's name until the clearance is giving. We had several lawyers and professionals review this to make sure we were protected in case of death, etc.

I understand your point about making it easy to sell when purchasing property. But for us, it was a no brainer because we know no where else in the world, where we can buy property like ours (the views from all 3 houses are amazing, I am looking at the lake, Andes Crest and Chile right now)for the price we paid. We believe this was definetly a "vale la pena".

I know of several extrajeros who have bought and since sold their properties here in Bariloche. The key is to find a buyer that is OK with the navigational thought process, as my wife wrote in the article.

I would like to believe, that as Argentina realizes foreign investment is good for their economy, they will loosen up this law, which was first being enforced to protect large parcels of land. Vamos a ver!
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Roberto
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Username: Admin

Post Number: 1752
Registered: 12-2004
Posted on Wednesday, September 24, 2008 - 10:54 am:   Edit PostPrint Post

Soulskier, the article is valuable and as you said the link works when spaces are taken out. We just need to be a little cautious in the linking stuff... otherwise we will be flooded with spam. Thank you for the article.
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Living in Patagonia
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Username: Soulskier

Post Number: 10
Registered: 9-2008
Posted on Wednesday, September 24, 2008 - 11:43 am:   Edit PostPrint Post

Thanks Roberto. I have to be honest, I didn't read the rules of the message board before joining. ¡Tampoco, no me gusta spam!
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Arial
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Username: Arial

Post Number: 255
Registered: 10-2006
Posted on Wednesday, September 24, 2008 - 4:04 pm:   Edit PostPrint Post

Hi Soulskier. I too appreciate the article. Thanks to both you and your wife for sharing it. Also Apts, thanks for your input about how selling it might be a challenge. That's something to think about. I do still sometimes think of returning to Bariloche. But buying there is still complicated. I don't know if it's worth it with all that Argentina has to offer!

Soulskier, do you know what the general price range is now for a two bedroom apartment in the good part of town with a nice view these days? Any idea? Arial
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Apartmentsba.com
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Username: Saint

Post Number: 558
Registered: 5-2005


Posted on Wednesday, September 24, 2008 - 5:53 pm:   Edit PostPrint Post

Arial,

Yeah, I think that in any real estate transaction people should not only think about the "buying" part of it but also the "selling" aspect of it. I've talked to many people that had problems in a number of different parts of South America because they didn't do proper due diligence on a property purchase. They were in a hurry to buy something but didn't really think about when they wanted to sell it.

Personally, I would NEVER buy something and have the title deed in someone else's name. I don't care how much I trusted them. Disputes come up between the best of friends and even family. The legal system here is a nightmare and assume you want to sell "your" property and the title deed isn't even in your name. You could have a real struggle and it could take a while to get sorted out. No one likes to think they will have a dispute with friends/family members but unfortunately that isn't the case sometimes. You will be barred from selling your property in the event of a dispute until it's settled. So that is something people also need to evaluate.

I think everyone has to evaluate their own risk/reward on any given property purchase but I'll never purchase anywhere in the world where the title deed isn't put in my name upon payment of the property. I don't care how beautiful the property is or what the view is like.

I'm not saying it's not worth it for "Living in Patagonia" but just on a personal level I don't believe in buying a property without it going in my name and I can assure you that the vast majority of investors (potential buyers) out there feel the same.
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Living in Patagonia
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Username: Soulskier

Post Number: 13
Registered: 9-2008
Posted on Wednesday, September 24, 2008 - 11:27 pm:   Edit PostPrint Post

Arial, I would guess around 150K for a nice 2 bedroom with a view in a new building. I am more versed in private homes outside the city center.

ApartmentsBA, just wondering, would you ever buy a property that the title deed was not in your name? Just kidding.

I have bought and sold property in both Buenos Aires and Mendoza province, and am aware of the real estate process in Argentina. Trying to sell a working finca in Mendoza province wasn't that easy, but we found an American buyer. I think with the proper marketing (at least until the last week or so), unique properties can be sold.

My experience has been many saavy investors will consider buying a property in a trust while the zona clearance is processed. IMO, it is just a formality, and is part of the reason properties are so well priced in a national park, with a booming tourism industry, and several 5 star hotels (Hyatt, Hilton, Faena) planning on being developed here.

Just to clarify, it does not take 6 months to 2 years to buy a property and/or sell a property. It takes that time frame to go through the zona seguridad clearance and have the title transferred into the foreigner's name. In the meantime, the property stays in a trust. The seller gets paid right away.

Thanks for allowing me to participate in this spirited debate.
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WTMendoza.com
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Username: Welcometomendoza

Post Number: 280
Registered: 7-2007


Posted on Thursday, September 25, 2008 - 6:02 am:   Edit PostPrint Post

Hi Jamie, good to see you on this forum and tell Shanie those are great articles, including the one about living in Mendoza. Here is the link again for Mendoza:

http://transitionsabroad.com/listings/living/artic les/living-in-mendoza-argentina.shtml

My 2 cents is that trying to “quick-play” real estate in Zona Frontera is much more challenging than investing or buying for long term personal reasons. And yeah Jamie, agreed "vale la pena"

I also want to point out, unless I missed it in the article, that it is completely possible and normal to buy land in Zona Frontera in your own name as a foreigner. I have clients that have done so, and one of them just received his approval 3 weeks ago, after waiting since September of 2007 - a 1 year process from start to end in his case.

I have a direct operational relationship with the top brass at the Minister of Interior, Zona Frontera office in Recoleta, and have been in that office many times, quite a place to be in, with their stacks of pending files and how they get shuffled from floor to floor. The Zona folks were out here in Mendoza in July also, in the middle of a Zona-wide tour throughout the country, addressing various questions for professionals and helping to clear the air on many doubts.

It's a bit of a long story but in a nutshell we are over the hump on lead times, since the yet-again change of staff happened at the beginning of the year in Recoleta, the biggest problem is a bottle neck with the Minister of Interior himself, who is only able to sign and approve so many applications per day vs. the stack of pending files which are many months and in some cases a few years old. The Zona Minister is quick to point any errors in applications, so even if there is just a small error, than it doesn't get signed, and then could be weeks before it gets back on his desk. Meanwhile, his tops staff has pre-approved many applications, just waiting for the Minister to sign. This bottle neck is excepted to diminish over the next 12 months as much as possible, and just maybe one day we ill get back to just a few months total lead time to buy zona property, unless they change all the staff again LOL.

I can’t express how important it is to make sure your file goes to Recoleta complete and error free. It is not that hard. It is like taking a collega exam but having a complete cheat sheet to work from, so there is really is no excuse except incompetence and ignorance by some people who prepare the applications.

There are also mean and ways to get 30 day approval on Zona property. It costs more, but I don’t recommend it, I recommend the regular route and to not try to quick-flip land in Zona Frontera anyway.

I think the law is good in general – it tends to keep out the riff-raff because of the criminal and terrorist checks, and it helps keep the area as pristine as possible in the end.

I am quoting my clients 6 to 12 months lead time on new applications currently, based on my experience and relationship with Zona Frontera, and again I expect this to get shorter as time goes on in the next 12 to 24 months. The current surge of foreign buying in Zona, that really started to ramp in 2003, has pretty much peaked out probably 12 to 18 months ago.
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Living in Patagonia
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Username: Soulskier

Post Number: 14
Registered: 9-2008
Posted on Thursday, September 25, 2008 - 7:19 am:   Edit PostPrint Post

Sean, thanks for the welcome. I wish I had known about this forum long ago. I have been posting on BAExpats, but quite frankly, the Anti Argentina tone that many have is a bit discouraging.

One question, with purchasing property in your own name as you mentioned, what happens to the title between the transfer of money and the transfer of title? Gracias!
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WTMendoza.com
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Username: Welcometomendoza

Post Number: 281
Registered: 7-2007


Posted on Thursday, September 25, 2008 - 7:47 am:   Edit PostPrint Post

Hi Jamie, you receive a "provisional" title until final Zona approval comes through.
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Living in Patagonia
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Username: Soulskier

Post Number: 15
Registered: 9-2008
Posted on Thursday, September 25, 2008 - 8:24 am:   Edit PostPrint Post

Thanks Sean! Are there any drawbacks/cons to this method?
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WTMendoza.com
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Username: Welcometomendoza

Post Number: 283
Registered: 7-2007


Posted on Thursday, September 25, 2008 - 8:35 am:   Edit PostPrint Post

None that I know of except the poential non-approval by Zona Frontera which I understand to be extremly rare because something is indeed wrong then and it was probably an "estafa" from the start in someway. Are there any cons you know of?
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Arial
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Username: Arial

Post Number: 257
Registered: 10-2006
Posted on Friday, September 26, 2008 - 7:58 am:   Edit PostPrint Post

When the government changed and disapproved all applications by foreigners in Bariloche, a real estate agent I knew there told me she hoped I would not leave Bariloche. Her advice was to rent for two years because everything always changes in two years.

Reading Mendoza's posts, I think the real estate person was right. If WTM is correct, it has indeed changed.

However, prices are also now out of sight by comparison. I could have bought a beautiful 2-bedroom apartment facing the lake for $60,000 then. Richard writes me that would be about $150,000 today. No thanks. Not that I don't think it's worth it today.

It is difficult for some of us to get used to how things are done in Argentina. It is so different from what we are used to and it can take a few years of orientation! But I am learning.

I probably could have held properties in a trust and then later transferred to my own name if I were willing to take the risk until the next regime came in or it was otherwise relaxed. One can say you should consult an attorney but we DID consult attorneys about that. More than one (I have also learned THAT in Latin America, get more than one legal opinion!) No one could anticipate the change in the government resolve at the time they gave the advice. Once they saw what happened we were offered the trust. But then one attorney got very angry because my son asked someone from the zona frontera office about the trust and he said absolutely not, that they would reject it if that had been done.

The attorney said that, in Argentina, you do NOT tell them what you are doing because if they get onto it they will take steps to plug the loophole and I would ruin it for everybody! He was so angry I have never consulted him again. But as a U.S. oriented person, anything like that was scary. I wanted no part of it.

But this is how things are done in AR. When you hear about some rule that will get in your way, there probably is a workaround that you don't know about unless some Argentine tells you. And then you have to be a little reoriented before you can believe them. AptsBA would not do it, and I obviously would not do it. But Argentines are very "creative" people. I LIKE them, to be honest! But it takes getting used to.

This is my take on it from my experience. If I am being misleading, I hope some genuine Argentine here will correct it.
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Living in Patagonia
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Username: Soulskier

Post Number: 17
Registered: 9-2008
Posted on Friday, September 26, 2008 - 9:10 am:   Edit PostPrint Post

Arial, I agree with you. Argentina is a lot different then the States on many fronts. It is safe to say there is a lot more mas o menos/gray areas. Coming from the States, it certainly took us a while to learn to go with the flow and get creative. One thing our new life (we have been full time since 2005) in Argentina has taught us is to be creative. We love it down here and as I mentioned earlier, "vale la pena"! Suerte!
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Arial
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Username: Arial

Post Number: 258
Registered: 10-2006
Posted on Friday, September 26, 2008 - 12:40 pm:   Edit PostPrint Post

Hi again, Patagonia. Out of curiosity I went to your web page.

Thank you for today's phrase in castillano, "the night is in diapers!" A new one to me! And a good one! Also I liked Shanie's article about the Argentina people. It mirrors my Bariloche experience. One thing I particularly like about them has been mentioned as a negative on this forum (I think I recall). They will argue politics until the cows come home. And like she says, they are passionate about stuff. They can even tell me all about politics in my own country! They are not one bit apathetic!

I HATE apathy! Some think the willingness to discuss politics a negative. But I see it as a good, healthy subject for discussion. Healthier (in my opinion) than a culture that thinks it rude to discuss politics at all.

I don't think the siesta is as observed in some places--BsAs, for example--as in Bariloche. I never got used to it. I could never get all my "business" done in one day. Because of the siesta it would require two trips to town. And there were no exceptions! You know how we USofAuns are oriented to get things done! Well Latin Americans don't seem to worry much about THAT. Like she says, family is much more important than efficiency. While I find it inconvenient, and have been known to fuss about it, I don't want to see it changed.

Another thing I like about the country is that there are not stupid zoning laws (as far as I know) that say you can't live in a business area. I go into shops where the family lives upstairs . . . or downstairs . . . or next door . . . and the teen-ager is minding the store! If the parents have a babysitter for little kids, they are still nearby. I LOVE it!

I hasten to add that Argentina is far from perfect. One has to learn to live with the imperfections. You know, a lot like getting married!

For those who do not yet live in Argentina I will tell something funny. A year or so ago, I was visiting in Viedma for several days. Now and then I noticed a pop bottle sitting on top of a parked car. I would think oh dear, I hope they don't forget it and drive off (which I admit I have done on occasion!) But I kept seeing it. Finally I commented about it to my Viedma friend.

"Oh," she said, "That means the car is for sale!"

Hahahahaha. If you haven't been to Argentina yet, come on down! You don't know what you're missing!
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Living in Patagonia
New member
Username: Soulskier

Post Number: 19
Registered: 9-2008
Posted on Friday, September 26, 2008 - 8:17 pm:   Edit PostPrint Post

Arial, I totally agree with you, Argies are passionate. I think it is great!

I believe the inefficiency is well worth the trade off for making time to spend with family and friends. Whenever I talk to friends back in the empire, they always seem to be really busy. It is refreshing to take time out in the day to relax, have some mates, and talk about life for awhile!
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Ricardo
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Username: Gromit

Post Number: 19
Registered: 12-2007
Posted on Saturday, September 27, 2008 - 12:28 am:   Edit PostPrint Post

I have only been living in BsAs for approx 9 months and this quote may have been floating around for awhile but I think it is appropriate based on this conversation.The pace and the inefficiencies do take awhile to get used to but "open your mind and breath deep".... for my wife and I the trade offs are certainly worth it. What a beautiful country/culture.

"It is true that Argentina is a bit of a step backwards when it comes to efficiency and infrastructure, but if you open your mind, breathe deep and enjoy the culture it is fantastic.
It's like the twilite zone here. One foot in the first world, one foot in the third world, one arm in the 50's and one arm in the 80's...... with many fingers in the 21st century." .---> Best to all!
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Living in Patagonia
New member
Username: Soulskier

Post Number: 21
Registered: 9-2008
Posted on Saturday, September 27, 2008 - 10:32 am:   Edit PostPrint Post

Really well said Ricardo! Does anyone else find it interesting that most regular Argentine folk are happier with a lot less than Americans are with much more?
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Mark
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Username: Lostintheandes

Post Number: 10
Registered: 10-2008
Posted on Sunday, November 02, 2008 - 6:05 am:   Edit PostPrint Post

Soulskier,

Mosy people have a hard time seperating needs and wants. Because there is so much available in the states many of those things turn into necessities but happiness does not come from having the things we want but by being content with the things we have.
Anyways I wanted to ask if you live or visit Bariloche as I am planning a trip there and would like to know what I should include and suggestions on where to stay.

Mark
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Living in Patagonia
Junior Member
Username: Soulskier

Post Number: 47
Registered: 9-2008
Posted on Sunday, November 09, 2008 - 1:14 pm:   Edit PostPrint Post

Mark,

You speka the truth. Things are so easy and available, it is almost as though they are needed. I live full time in Bariloche and we manage several property rentals. Feel free to contact me if you would like trip planning advice, happy to help.
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Apartmentsba.com
Senior Member
Username: Saint

Post Number: 615
Registered: 5-2005


Posted on Tuesday, November 11, 2008 - 4:56 pm:   Edit PostPrint Post

Ricardo - Argentina is a VERY inefficient country. I still go crazy after almost 5 years of working here. As much as I love the country, I will never get used to the inefficiency here and I want to pull my hair out almost daily. It's pretty bad. I guess if I was retired and not doing busieness then it wouldn't be a big deal but doing business here is VERY difficult.

Living in Patagonia - Yes, I do think people here are generally happier than most Americans. People here enjoy the simple things more in life. Family is more important and they don't need to spend a lot of money to enjoy themselves. I still go to the park almost every weekend with my family here and it's great to see it filled.

Mark - I agree with you. Most Americans confuse needs with wants. Now with the credit crunch people are getting a realistic sense of what is a necessity and what is a luxury. In many ways I think this financial crash was needed. As painful as it is.

I think this financial crises has been a real wake up call for many people around the world. Unfortunately I think that wake up call will become louder in 2009 as many people lose their jobs.
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Benco
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Username: Benco

Post Number: 57
Registered: 4-2007
Posted on Saturday, December 06, 2008 - 1:41 pm:   Edit PostPrint Post

I would be interested in what you guys think about the effects of the current crisis on the real estate market.

My view is that for the last years an average investment in real estate in Argentina has not paid off particularly well - of course, when you look at it in US-Dollars you got a decent return, but this was just because the dollar kept getting weaker and weaker. So you made money because it was the right decision to get out of the dollar, even though it was not such a great choice to buy Argentinean real estate.

Now the situation has changed. Investors withdraw money from emerging markets, and the dollar gets stronger and stronger. If you have bought stocks, bonds or about anything in emerging markets before the crisis, you are probably going to realize massive losses. Real estate prices may not have fallen yet dramatically, but the transaction volume is certainly drying up. During the last crisis real estate prices fell by 50 percent within weeks, and this was not just because of liquidity problems - the general outlook was bleak, as it is today.

Of course there are factors stabilizing the real estate market - the most important one is probably that many people keep their savings in dollars, or invested abroad, or in real estate in Argentina - so a devaluation of the peso does not reduce the dollar value of properties as much as one may expect. But most people do have their income in pesos, and a strong decline in income certainly affects property prices badly.
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Mark
Junior Member
Username: Lostintheandes

Post Number: 42
Registered: 10-2008
Posted on Saturday, December 06, 2008 - 6:56 pm:   Edit PostPrint Post

We have had some lively discussions on that Benco. My feeling is that any real estate prices anywhere that increases at the rate that Argentina RE has for the last 6 years are unsustainable. You can come up with any number of reasons why this time is different but the fact of the matter is its like the great tulip bubble...a tulip is only a tulip. A house is only rent and land is only potential farm income producing. Eventualy it all evens out and RE increases only at the rate of inflation over the long run as proven by Schiller and others. Thats not to say there aren't bubble periods with money to be made, but my guess is Apts BA made all the easy money and would be happy to sell you and me his inventory and let us hold the bag through the coming crisis.
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Apartmentsba.com
Senior Member
Username: Saint

Post Number: 671
Registered: 5-2005


Posted on Saturday, December 06, 2008 - 7:48 pm:   Edit PostPrint Post

Hey Benco,

Long time no see. Hope you are well. I've posted in some past posts I think in 2009 most countries around the world will be in a severe recession and I think real estate prices pretty much everywhere will stop appreciating or probably go down. I don't think Argentina is any different in that regard.

Mark - I agree that real estate here won't go up at the levels it has gone up the past few years. Yes, I got in and bought LOTS of real estate in Buenos Aires (mainly in Recoleta and Palermo) at good prices. I got in on real estate in Puerto Madero as well many years ago at good prices and it's appreciated.

Actually I've sold a few properties but more times then not I've turned down offers on properties that I own. Some of my clients are more motiavated as they bought properties in the USA and are so upside down on them. Or they lost lots of money in the stock market.

I do think in times of severe recession that you will see "deleveraging". Wealthy locals or even upper middle class or more affluent people had their money in the USA stock market or European markets and they are down BIG TIME so some of them need to sell properties in Buenos Aires (Argentina) to raise more cash. Yet many others brought back funds to Argentina as they are worried about the shaky American and European banks as well.

Make no mistake, in times of a severe recession real estate can go down. I've always said that. On personal properties I own around the world I don't hold mortgages on any of them. They are all earning cash via rentals and lots of my clients are in the same position. I've always said I think real estate is a long term investment and that's how I look at it and how most locals look at real estate in Argentina.

Will I sell you my inventory if I get the price I want? You betcha. In ANY investment it's about buying at the right time and selling at the right time. Real estate is no different but everyone has to look at their reasons and motivations for buying.

Volume is slowing down on transactions. NO doubt about it. But then again I think that is wise and intelligent as in times of severe recession I don't necessarily think that buying real estate is always the best thing. Certainly I don't plan on buying more properties myself for 2009. I'm in a wait and see mode and still looking at picking up something in the USA. My call on the USA real estate has been spot on target and I see prices falling even more as more foreclosures are inevitable.

2009 will be an interesting year and I think the best thing to do is hope for the best and expect the worst.

It will be interesting to see if the billions that have come back into Argentina by locals make it's way into the real estate market. I do think that locals will eventually put that money to work in the real estate market. I'm not sure if it will be in 2009 or 2010 but I do see it working it's way into the real estate market. There still isn't much to invest in Argentina besides real estate. And it's clear that lots of locals have lost faith in the USA and Europe which is clear is losing it's importance worldwide in their dominance of financial markets. Asia is becoming more powerful with their vast reserves. Lots of Argentines are seeing the situation in the USA and realizing the problems going on with the vast amounts of cheap, easy credit. And they look at the government printing endless amounts of money. It looks a bit like a ponzi scheme to them.

Ironic but lots of locals in Argentina that I know that earn a fraction of what my friends living in the USA and Europe make in salaries have a higher net worth. Lots of them own properties and none of them risk losing them in foreclosures. It's amazing what living within your means can do for your life...
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Georgio Armani
New member
Username: Georgio_93

Post Number: 8
Registered: 1-2009
Posted on Monday, January 05, 2009 - 12:44 am:   Edit PostPrint Post

I am not a fan of US property investing these days. Even if you buy a home in cash, the high initial cost of the home, property tax, insurance cost, and utilities/maintaince costs are too high versus the rental income you generate.

CA during the mid 80's home prices were 200k for a 2k square foot home. The same home is valued at 700k even after this recession. Even if I had 700k now to buy the house and rent it I probly would only get 3k or so per month. $7500 in property tax and $2000 insurance with $4000 utility/maintance costs would yield me only 3.2% per year. That is horrible. I am not sure which market you are looking at but the only parts in the US that I think are good are Florida, So Cal, Upper East Coast, and Seattle. Also as the recession deepens, people will move closer to the major cities for work and lack of jobs.

As for Argentina... I would not invest more than 100k with renovation costs built in to this price point. Anything more is too risky. Besides, the ten year mark for the next Argentina crash is coming soon! I'll wait!
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Georgio Armani
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Username: Georgio_93

Post Number: 9
Registered: 1-2009
Posted on Monday, January 05, 2009 - 1:27 am:   Edit PostPrint Post

In response to Apartmentsba, I don't forsee the US losing its dominance within the world. The US can simply print their way out of this recession and take the world for hostage since 70% of the worlds cash reserves are still currently in US dollars. What are the Chinese going to do when we make the treasuries they hold worthless? Are they going to change into an unbacked currency such as the Euro at an unfavorable exchange rate? Even if the US dollar becomes worthless, it will just make the Argentine Peso and every other S. American currency even more worthless since there whole real estate and financial markets are all in US dollars. Americans will still live comfortably in Argentina no matter what happens to the US dollar.

Europe lost its dominance a long time ago. So much of what Europe creates and manufactures is dependant upon US consumer spending. Have you seen how they live? They don't spend much on things other than food. Most people own their own homes in cash therefore eliminating the need for many bank transactions and lending.

Asia will never be a dominant power because it is impossible to create a middle class with nearly half of the worlds population living below the poverty line. Asia will always be a cheap labor source unless they fix their population problem.
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Living in Patagonia
Member
Username: Soulskier

Post Number: 80
Registered: 9-2008
Posted on Monday, January 05, 2009 - 8:14 am:   Edit PostPrint Post

I think dominance is overrated! Sometimes being the sleeper/under the radar country is good!
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Georgio Armani
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Username: Georgio_93

Post Number: 11
Registered: 1-2009
Posted on Monday, January 05, 2009 - 9:15 pm:   Edit PostPrint Post

You are right Soulskier. We are that sleeper country. Everyone in the world including ourselves have been pounding defeat, callapse, and the end of the world. That is all you hear in American media and media across the world. And yet our solution is to make more stimulus packages. If we are so much in debt, that would be the most illogical way to solve our problems, which brings me to the conclusion that we don't care because we have the world tied to us. If we fall they fall and in an act of self preservation, Europe and Asia will do everything they can to prevent that from happening. We still have the most productive and skilled workforce in the world next to Norway.
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Living in Patagonia
Member
Username: Soulskier

Post Number: 81
Registered: 9-2008
Posted on Tuesday, January 06, 2009 - 7:17 am:   Edit PostPrint Post

I compare the bailouts and stimulus package in the US to a heart attack survivor whose first meal after he survives is a juicy hamburger.

Companies and people overextend themselves, give them another loan, repeat again. Vicious cycle indeed.
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peter jameson
New member
Username: Pcj

Post Number: 9
Registered: 8-2007
Posted on Saturday, February 28, 2009 - 1:43 pm:   Edit PostPrint Post

Does anyone know what the price / sq m building cost is for a single family home in Argentina?

We are thinking of building in the Bariloche / SMA area.

I know this varies greatly according to location and materials used, so a range would be great.

Thanks...Pete
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EAST WEST 3000
New member
Username: Eastman

Post Number: 24
Registered: 1-2009
Posted on Thursday, March 05, 2009 - 7:29 pm:   Edit PostPrint Post

Georgio Armani, Its that typical American attitude that has got the world into this financial mess. The truth is the rest of the world is tired of supporting a sinking ship
and soon you will see countries getting out of the dollar and investing in something of true worth, like commodities and infrastructure .
AMERICA is good for Corn & electrics true, but dont forget who the REAL TITANS are here, GERMANY is the biggest exporter in the world !!! JAPAN is there too, and of cause CHINA... I think that when the Uk and Europe finally pull all is investments out of the USA you will be left with the real worth of your country and will soon realize that CHINA will become your new master.
Good day to you.
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Living in Patagonia
Intermediate Member
Username: Soulskier

Post Number: 121
Registered: 9-2008
Posted on Thursday, March 05, 2009 - 7:51 pm:   Edit PostPrint Post

Peter, around Bariloche you can expect to pay about 700-1000 dollars a square meter for middle of the road construction. Feel free to contact me if you have other questions. Suerte!
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WTMendoza.com
Advanced Member
Username: Welcometomendoza

Post Number: 418
Registered: 7-2007


Posted on Thursday, March 05, 2009 - 8:15 pm:   Edit PostPrint Post

EW, I agree that infrastructure is an important long term investment, and also to plant more of the world to create more agricultural supply, but if you are hoping that commodities as a whole get back to price ratios like they were last July, you might as well cut your losses and let it go. The world can't, didn't and won't stand that kind of food/price pain - good luck
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EAST WEST 3000
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Username: Eastman

Post Number: 25
Registered: 1-2009
Posted on Thursday, March 05, 2009 - 9:13 pm:   Edit PostPrint Post

WTM, Thats right with the falling dollar we will have an over supply of corn/wheat/soy
along with ARGENTINAS export.
I think the problem we are forced with now in the world is that there is to much supply and not enough demand as regards to all exports.
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Living in Patagonia
Intermediate Member
Username: Soulskier

Post Number: 122
Registered: 9-2008
Posted on Friday, March 06, 2009 - 7:18 am:   Edit PostPrint Post

On Argie real estate, stay tuned for some very interesting news about Zona de Seguridad.
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Paolo Meis
New member
Username: Paolo_from_italy

Post Number: 1
Registered: 11-2009
Posted on Sunday, November 01, 2009 - 2:17 pm:   Edit PostPrint Post

Hi Georgio, Hi guys

This is the more interesting thread about Argentinian real estate on the web.

Could you give me a update about the situation there ? How real estate prices are going now ?

I'm from an alpine touristic village in north Italy. I recently talked with some brasilian guys who send their sons to Bariloche, spending even 1,200 USD / week.
That is what you pay here for your ski week, with the difference that an apartment in a good location of the Italian Alps will cost you 14,000 USD /square meter (these are 2007 prices. Now no-one is selling anything by now. Here people do no use credit to buy so that they don't lower prices easily and the market becomes motionless instead of plummeting).
Hence any investment here has a very low ROI.

Anyway, I was thinking that a small hotel in Bariloche could be an interesting investment. Particularly taking into account that there's a new middle class surging in Brasil (and I guess in Argentina too).

Thank you for any input that you guys have !

Paolo
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Roberto
Board Administrator
Username: Admin

Post Number: 1946
Registered: 12-2004
Posted on Sunday, November 01, 2009 - 3:04 pm:   Edit PostPrint Post

Welcome Paolo!

> there's a new middle class surging in Brasil...

Probably second or even 3rd generation brazilian middle class. They have been growing steadily for quite a long time and have been visiting Bariloche for decades. I don't have a direct answer to your question but there are a few members here who are knowledgeable on real estate in patagonia. Maybe they will chime in.
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Paolo Meis
New member
Username: Paolo_from_italy

Post Number: 2
Registered: 11-2009
Posted on Sunday, November 01, 2009 - 4:21 pm:   Edit PostPrint Post

thanks Roberto,

A recent communication from an association of entrepreneurs here was suggesting its associates to extend their operations in countries where middle-class members are soaring. Among them they cites both Brasil and Argentina.

Reading this thread I guess there are still many problems. However there are many facts making investment interesting, particularly in relation to our situation here.

Europe is aging as no society before. The birth rate is way lower replacement (1.2 sons for woman, while replacement is 2.11). Mass immigration, seen as unavoidable for supporting welfare, is going to cause social unrest. Manufacturing is having terrible problems because of both the crisis and the strong currency. Money goes where ROI is higher, and it's not here anymore. I feel all this is something more than the periodical/cyclical recession. The air is that of an epochal change.

Argentina has been richer than many European countries up till the 60s-70s. It's younger and with a birth rate at replacement level. Eventually it will soon be more european than Europe and for an italian guy the more italian place in the world outside italy.

This thaughts make me think of investing there.

Hope to hear from you guys about Bariloche's real estate situation now and opinions about touristic investment there.

Thanks again

Paolo
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Living in Patagonia
Intermediate Member
Username: Soulskier

Post Number: 161
Registered: 9-2008
Posted on Friday, November 06, 2009 - 3:48 pm:   Edit PostPrint Post

Hola Paolo,

I run a property management company in Bariloche. Many of our properties (3 bedrooms and smaller) have done very well, even with a bad winter and swine flu.

I believe many good investments exist, but you have to do your homework.

Feel free to contact me directly if you have questions.

Suerte, SS
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Apartmentsba.com
New member
Username: Saint

Post Number: 672
Registered: 5-2005
Posted on Saturday, November 07, 2009 - 5:08 pm:   Edit PostPrint Post

Hi everyone. It's been a long time. I've been incredibly busy the past several months traveling throughout Europe with my family, finishing some big projects and high rise towers, moving family to Buenos Aires and expecting a new baby in a few weeks not to mention I had a new baby not long ago.


Needless to say it's been very very busy. I haven't read this board in a while and probably won't have time to post much and also I am doing consulting work for hedge funds and investment funds and they don't seem to like paying someone to give free advice to the masses on a message board. ;)

I WILL continue to point out that just about every single forecast I've made over the past several years has been totally accurate. If you go back and due the due diligence on this board as well as others, just about everything I predicted around the world has come true.

I covered on my massive short positions a bit early but you can see it was before the massive rise in the market again.

As far as my predictions on the USA real estate market... let's just say I think that speaks for itself. :-) I