| Author | Message | ||
     Patrizio New member Username: Patrizio Post Number: 1 Registered: 2-2008 |
I know many foreigners who come to Buenos Aires, like it and see it as a place to buy a residence or make a real state investment because of it low cost compared to international prices in similar cities. Well, unless you`re willing to lose aprox. 60 percent of your investment in a two year period, i would advice against it. Here are some hard facts you might want to take into account while making an investment in real state in Buenos aires. These are indicators of overprice and an upcoming general fall in real state. For this exposition we`ll have into account that is the internal market the one that decides the price of realstate because of its dimensions. Also the fact that the general population had had a chance to save up US dollars during the 90`s while the currency exchange was 1 peso= 1 dollar. Now the currency is 3.15 pesos=1 dollar, only that the prices of real state remained in dollars, since people had their savings in dollars and were able to make transactions with them for a while after devaluation (2, 3 years after 2002 and until more recently on cheaper propperties) Now salaries varies from 350 Us Dollars up to a $ 1000, for the general population, the latter one being the exception. In the other hand, a 1 bedroom, 1 living room appartment 50 sq metter aprox, in a decent neighbourghood like palermo is worth $80.000, $90.000 US. So, now there is no way average population are able to pay a 1 bedroom appartment unless they are willing to save up their entire salary for the next 228 years . Banks even tried to make the best of the situation, by giving credits for the entire ammount of the propperty (yes, you heard right, 100% financiation, no down payment), but the catch is that the person had to make more than 1700 US dollars salary, and they only finance up to 60.000 US.Again credit is not accesible for the general population. It is a rule that people will buy a thing when its cheaper to buy than to rent it. Then... How much is rent? Rent is from 3.000 US annually to $4800 US. That`s 3,75 % to 5,3% annual return on the $80.000, $90.000. Well, any other solid investment like mortgages loans will pay up to 15% annually (at least in BA), so we`re talking about that is 3 times cheaper to rent than to buy. In other words, instead of buying the appartment, you could rent three of them with the return you get investing the money elsewhere. So people who has the money wont buy, but rather rent. People who doesnt have the money cant get access to a credit to purchase. Internal market is stalled. Thats the first and stronger sign of descalibration in the market. Add to that , there`s a building frenzy in the city. In some neighbourghoods you get to see 2, 3 new buildings per block. Building companies who have the money to build buy a piece of land and build on it, would rather buy two pieces of land, stabblish martgages over them and build in two places making almost twice as much. The thing is the market is pretty much stalled by the factors i just explained. So the credits they took over the land have started eating the building companies up, including the buildings themselves (since its a mortgage on the land). Is not uncommon to hear the building companies saying that they`ll give you the possesion of the propperty with 90% of the money, and they will make the transfer of the propperty once an X pertage of the rest of the building is sold. This means that if they go into bankruptcy people will loose what they pay and the whole building goes to action. So you have no credit, an stalled market, Increasing offer because of the building frenzy and decreased demand, building companies that will end up having to either sell very cheap to cover expenses or go to auction, and last but not least , realtors. Realtors really multiplied over past years due to this building frenzy, and where there was just a bunch renown realtors, now there is an excessive ammount. There are some who put pressure on their clients to drop prices, other are turning to an international market (this is you guys), in order to try and save their businesses from bankrupcy. So, everytime you see about thet great prices of argentina keep in mind that they are just squeezing the last profits in a market that is very close to dropping very hard and very fast, in my oppinion and looking at the indicators a little over 60 percent of their price. I know there is going to be some very angry people ready to contradict me, and its okay, i`m sure they`ll have their interests compromised by this Article. Enjoy and i hope it clear up the scenario for those who are thinking on investing here. If you already invested here, its a great time to sell with a profit (if you are in fact able to sell) and enjoy the show. PS. This article reffers to houses and appartments, i dont think this can affect country lands for harvest, since they are tied to international prices of the commodities. Also coomercial propperties will be the least affected but not excluded, since their value is tied to production and sales as well. //Patrizio | ||
| Apartmentsba.com Advanced Member Username: Saint Post Number: 394 Registered: 5-2005  |
This is very simple. If you don't want to invest in Argentina, don't believe in the market or feel nervous...it's simple. Don't invest here. No need for long posts arguing with you as many people have already posted for the past years why they would disagree with your post. Just go to the "real estate in Argentina" section and you can read all the reasons why much of what you wrote is wrong. I heard and read from MANY people like "Patrizio" over the past 4 years. Real estate here is almost all cash over the table so the claims of 60% losses over a two year period are pretty comical. Banks here don't loan out 100% or 125% of the value of the properies like they did in the USA or the UK. Again, almost all are cash over the table. I've purchased hundreds of properties including apartments, houses, land and buildings. All of them were cash over the table. People aren't getting loans to purchase. They are paying with cold hard cash. So people should read the real estate in Argentina section on this website to learn a bit about real estate here. If you want to look at bubbles you can look at the USA and the reasons for the overvalued real estate with the ridiculous loans. Those don't exist here. Then you take the situation where the locals don't trust the banking system here so they don't keep their money in the bank. They buy real estate. There are no credible/safe investments in Argentina besides real estate. THAT is why prices keep going up. Remember it's not foreigners driving the prices up. (Sure, they aren't hurting) but the real estate market is still driven by LOCALS paying cash. As I've always said since I've moved to Argentina several years ago. Investing in real estate in Argentina is NOT for the majority of people out there. As I said before, public message boards are around for a long time. So let's see a year from now if Patrizio's prediction of a 60% fall is correct. I would disagree with it. Good luck to all. | ||
| Simon Fawkes Member Username: Expatba Post Number: 59 Registered: 1-2007  |
I agree with Mike on this. Almost all real estate purchases are in cash, which reflects the true supply and demand value. Prices here have not been hyper-inflated by the availability of easy credit like in some countries. There may potentially be an issue with oversupply of new build developments - however new builds are not indicative of the whole real estate market. Some new builds have been priced "speculatively" to appeal to foreign buyers - in some areas they are marketed at double the going rate in Recoleta for the same square meterage in an older property. By global standards this appears cheap, but by local standards it's ridiculous. I know many locals who laugh at "stupid foreigners" who will pay these prices and think they are getting a bargain. When they come to sell they may well find (in the short term at least) that they can't achieve what they paid. That's not to say that all new-builds necessarily represent poor value for money. It all comes back to the old adage "buyer beware". If you choose carefully what you buy and do due diligence your investment should go up over the long term. As I said before new-builds are not representative of the market as a whole. Simon Fawkes Author, The Complete Guide To Real Estate Investment in Argentina, ISBN 1430303980, http://www.amazon.com/exec/obidos/ASIN/1430303980 | ||
| Apartmentsba.com Advanced Member Username: Saint Post Number: 396 Registered: 5-2005 |
I agree with Simon and also on his comments. Also, something I forgot to mention is that I think you have to separate and look at real estate by neighborhoods as well. For instance, I do NOT buy anything in Puerto Madero and really haven't for a few years now. I did buy there several years ago and the property prices have doubled since I bought but I stay away now. There are some developments which are up to us$ 5,000 per sq. meter. I don't pay that much for real estate when you can go to areas like Recoleta and Palermo Soho and pay $2,500 per sq. meter. Again, not to say that all new builds are bad because they aren't. I'm not even saying the buildings in Puerto Madero will lose value in the next few years. I think the opposite. I think they will continue to go up in value. However, I think Recoleta and Palermo will go up in value at a much faster rate. Real estate here (and in any place in the world) should NOT be purchased as a "get rich quick" type investment. It's certainly not. However, many investors have different reasons for buying real estate in Argentina which inclue but are not limited to asset diversification, asset protection, tax reasons, estate planning reasons, getting some money outside of the USA/UK/Europe (wherever they are from), cash flow via rentals, future capital appreciation potential or some people just love the city and come over and over and they want a "home base" when they come here since 5 star hotels are charging upwards of $450/night + with the 21% tax. Many are intelligent businessmen that come over and over to the city and their companies give them up to $400 per night to spend on a hotel. Instead, I showed them that they can buy a property, stay in their own property every trip and bill their company less per night staying in their own place essentially having their company pay for their place. Everyone wins as the company is actually paying less per night than a hotel. I have some clients where their companies over the course of a few years ended up paying for their apartment because they stayed in their own property. All perfectly legal and not breaking any rules with the corporations. Also, consider that Patrizio's numbers are based on locals or property owners renting to other locals. That isn't the case with many owners now. Many owners have seen my business model that I created back in 2002 renting to foreigners instead of locals. Their returns are MUCH higher than Patrizio is claiming. In fact, many properties here the owners are making more rent than they could make in the USA or Europe on a property that costs 3 or 4 or 5 times more. Also, the expenses here are a fraction of the cost back home. Expenses here are very very low. Expenses in pesos and income in dollars. I'm talking like $5 a month water bills; $15 a month electricity bills, $5 a month gas bills. There are lots of reasons why people buy real estate here. VERY rarely is there only one reason. Cheers all. | ||
| Arial Intermediate Member Username: Arial Post Number: 159 Registered: 10-2006  |
Patrizio, my son has an Argentine friend who is renovating large buildings in San Telmo. He holds your viewpoint. So you have at least one savvy professional with a lot of Argentina experience in your camp! He fears that Argentina is getting ready to stage a repeat of past performance and does not want to be caught in it--again. I think that you could be right. No one has a crystal ball. However, one additional factor that has been added to the mix is that Argentina is a resource-rich country. Commodities are now in one of the biggest bull markets in history. This has not been the case for many years. Might this make a difference for this country? I hope that it will. Thank you again for giving us your analysis of this market. I appreciated it. | ||
| Apartmentsba.com Advanced Member Username: Saint Post Number: 397 Registered: 5-2005 |
Arial, Definitely I think different viewpoints on a message board are healthy. Certainly the world would be very boring if EVERYONE thought the same way. In fact, as an investor I wouldn't like it as there wouldn't be the opportunities to get in and get out if everyone thought the same way. There have been lots of savvy professionals here that have called the real estate market wrong the past several years. In 2004 they said it topped, same in 2005, 2006 and also in 2007. Now, I don't have a crystal ball, however, I'll say since 2002 pretty much every single forecast I've made has come true in both the USA and Argentina as well as other places around the world. This includes with the economy, real estate markets, exchange rates, gold prices, etc. Now, I'm NOT advocating speculation projects. I agree with the risk there both from an inflation standpoint and a possible exchange rate change. Costs are priced in dollars and expenses are in pesos. So I don't like those plays and I don't really invest too much anyone in total speculation projects. However, when I want to build a building up. I can go out and get all the investors together and get 100% of the millions needed to fund the project. I can buy all the materials to shield the possible liability of inflation but labor is still something you have to deal with. However, on pre-existing properties. Ask your friend if these people sold their properties, what are they going to put their money into? Most people sell their properties to buy another piece of property (either upgrading or downgrading). I mean, sure, many have off-shore bank accounts but with the Patriot Act these days it's almost impossible for a foreigner to open up a USA bank account and other countries are tough as well. So ask your savvy friend what he feels is honestly the safest investment in Argentina. Ask him if he would rather put money in the banks here in Argentina or buy a property. Ask him what he would do or what he would select? I doubt he will say putting it in the bank here. Ask him to give you a list of the top investment opportunities other than real estate (apartments, buildings or land) that are predictable and safe here in Argentina. I'd be curious to see his list. (Or you, Patrizio..... please give us the top 5 investment picks you give. Since you are predicting a 60% fall in real estate in 2 years here.... throw us out your list of your top 5 investments for Argentina that are safe... I'd be curious to see your list as well. Ask any local what the safest investment for locals has been over all the years here with the instability of Argentina... I can almost guarantee they will tell you it's "bricks/walls" that are the safest investment that has consistently been the safest. You have to factor all this in mind to realize the dynamics of why prices are what they are. Never forget that when these banks gave people that had their savings in the banks here a fraction of the actual savings they had and cut off their supply to money for several months, limiting the amount they could take out....remember where many of these locals "cashed out". That's right..they sold their properties for 100% cash over the table.... Many people don't really understand that part of the equation. And understand that point. In fact, if there is more instability here, I think it will make real estate even more attractive as it's considered a "safe investment" here for the locals. Rents prices went up 27% in 2006 and another 26% in 2007. That trend isn't likely to change. So think about all of these things when you say real estate will fall 60% over 2 years. Investigate the entire scenario here and why people buy. Good fortunes to all. | ||
| Patrizio New member Username: Patrizio Post Number: 2 Registered: 2-2008 |
Well, the price is going down, the question is when, and it is related as to how long contruction companies in debt will be able to hold to their propperties before they go out to auction, or how long till market stalls complety. A real state system can`t live exclusivly of foreign market because they aquire it as an investment, as soon as it stops paying a good return they`ll sell. Small appartments are easy to sell, but bigger appartments market has pretty much stalled. | ||
| Apartmentsba.com Advanced Member Username: Saint Post Number: 398 Registered: 5-2005 |
Ok...so you went from "you will lose 60% within a 2 year period" to "the price is going down, the question is when". That is quite a drastic change in the course of a few hours. So, again, please list the other investments you feel are better than real estate in Argentina. I'm sure all these locals that are buying real estate would LOVE to know your long list so they can sell their properties and get in that investment. Also, I'm not sure where you are getting the idea of "real estate system living exclusively from the foreign market". I'm not sure how involved you are in real estate in Argentina but foreigners are NOT a "majority" of the real estate market here so you might want to check your facts. Cheers. | ||
| Gloria Melgar Estevez Member Username: Glorita Post Number: 54 Registered: 12-2007 |
Patrizzio, As an Argentine who knows alot of people in Argentina in the salary range you state (350-1000), I will cast my vote to say that these people tend to want to get into their own home/apartment. Now you state that such people would have to save their entire salary for 228 years to cover the current home prices. I know alot of people who got into their own homes with their savings in addition with savings provided by family members(such as parents and grandparents). These family members once they have secured their own home, any monies gained after that tend to use it to help their children get into a home because what are the other options?....the banks or under the mattress....and both of these are risky propositions. You as an Argentine(depending on your age) should have plenty recollection of the instability of the country in the past and how this has made "bricks/wall" the safest investment for "MOST" Argentines. Also, there are neighborhoods and there are neighborhoods. I tend to think that anyone investing in Recoleta and Palermo can rest easy as these places are not just reknown to Argentines but the world over. One more thing, how have you come up with this observation? I have been reading "La Nacion" and have not come across such information as of yet. | ||
| Arial Intermediate Member Username: Arial Post Number: 160 Registered: 10-2006 |
Interesting discussion. I would like to find a book (Spanish is okay) on the economic history of Argentina. Anybody have one to recommend? I have read in the past how wealthy Argentina was at one time. Supposedly "Rich as an Argentine" was a common expression. In the past it has apparently been a very expensive country as well and I tend to assume that what it has been before it will be again. If that is the case, real estate prices probably have a ways to go. But when did it change? And why? I donīt expect answers but would like some resources if any of you know of any. | ||
| Roberto Board Administrator Username: Admin Post Number: 1558 Registered: 12-2004 |
> Rich as an Argentine. There was a time when a few wealthy guys would walk with their cows -just like dogs on their leashes- through Florida street, one of the first streets in the city map of 1814. That was the time when argentines would *import* french architects for developing their mansions. We grew up with the belief that if you spit on the ground something will grow -anything- and that 1 crop would pay our entire debt (it was true back then... it may become a reality again!). All to our detriment as we won't be learning the important lessons. You will find many answers after studying the transition from the oligarchy of the beginning of last century to the advent of Juan Domingo Peron in 1945, an event that changed everything to this very day. We are living his legacy (minus/plus), so to speak. Two books I highly recommend are: El ejercito y la politica en la Argentina 1928-1945 (Robert Potash). This one might be in english too. And I believe he wrote the second part too. De Pellegrini a Martinez de Hoz (Mario Rapoport) There is an essay -can't find it now- called 'La Guerra de las carnes" which is critical to understand how the influence of the US increased during the 20's and led to the events of 1930, our first military coup. | ||
| Patrizio New member Username: Patrizio Post Number: 3 Registered: 2-2008 |
I think its important to take responsability for threads (all around internet) offering B.A. as one of the hottest realstate spot. What i`m doing is not sitting idle while some people with loose morals take advantage of others unaware of the market in a comunity that is suposed to help each other achieve our goals and not to take advantage of each other. What you say since you`re getting an advantage out of it, we should all stay quiet while lots of people makes lousy investments? Its just an article for business people in a business forum making an analisys of reality. Btw, its a worldwide trend, see how the analisys done by CNN is sort of similar in this article about U.S. http://money.cnn.com/2007/11/06/real_estate/home_p rices.fortune/index.htm | ||
| Gloria Melgar Estevez Member Username: Glorita Post Number: 56 Registered: 12-2007 |
Patrizio, I think that a lot of the foreigners on this thread that bought in ARgentina, did so some years ago when the "real estate was one of the hottest" places to buy in comparison to similar placesin other parts of the world....and B.A. being one of the hottest(in certain locations). I doubt that any foreigners, at least in this website, recommend buying "NOW" at the current prices. What they are arguing about with you is the fact that you stated that in two years prices could fall 60%. Now, let's hypothetacally say that they do fall 60%.....I, as an Argentine would prefer to have my home(even at a 60% devalue rate) than to have it in a bank in ARgentina....why?....well, you do recall the "corralito", right?....with your home, you have it and live in it . And real estate fluctuates so you can see it go back up eventually. Now with the money in the bank, you can kiss that baby good-bye. Perhaps you have misread some of the posts. I don't think there is no intent to misdirect and take "advantage of others". I think perhaps you have not taken the time to read through the posts in other threads to find the facts and to also understand that we state opinions(which may be incorrect or even if correct not accepted by others). Perhaps also, a language barrier could be making you misunderstand. Sincerely, Gloria | ||
| Gloria Melgar Estevez Member Username: Glorita Post Number: 57 Registered: 12-2007 |
Patrizio, Sorry, I type at the speed of light sometimes and mistate things...I meant to say..."I don't think there is "INTENT" to misdirect and take "advantage of others". Gloria | ||
| Roberto Board Administrator Username: Admin Post Number: 1560 Registered: 12-2004 |
Patrizio, I wouldn't think of someone who tries to maximize profits as having loose morals. Perhaps shrewdness is a better word? In any case, I think you may be underestimating americans when it comes to business. As stated earlier, in the US, citizens are very familiar with the motto 'buyer beware' and in case you still have doubts, they are the founding fathers of capitalism and if they aren't, they have perfected it. Finally, I would think that someone buying real estate is probably considering it as a long term investment, not something they can flip in a year or two. Where do you see real estate prices in dollar terms 10 years from now? | ||
| Apartmentsba.com Advanced Member Username: Saint Post Number: 401 Registered: 5-2005 |
Patrizio, The information provided on this board is accurate information. Take the time to read over the past few years all the information given and maybe you might learn something. The plain fact of the matter is that some of us have been spot on target about the market here. When doom and gloom type of people were talking about Argentina the past few years, they were exactly wrong. In fact, posts like yours that try to imply that foreigners are the "majority" of the buying here are totally false. It's locals driving up the prices. Supply and demand dictates prices on real estate. Especially in Argentina where it's all cash. Now, I'm probably one of the only people in Argentina that turns WILLING investors away every single day. (In fact, I know at least a few members on this board that I turned away that wanted to invest and if they choose they can confirm that). I've said many times on this forum that investing in Argentina is NOT for everyone. In fact, I've continually said it's not for most investors. The information here is accurate. No one forces anyone to buy real estate anywhere in the world. Real estate investments are VERY serious and I think you will see that there are some responsible, ethical and knowledgable players that only take on clients that they think are a good candidate for investing in Argentina. I've said it before, I believe real estate is a long-term investment not something that you buy and flip. Especially in Argentina where the buying costs are VERY high when you add in the realtor's fee, legal fees and closing costs, money transfer fees, possible stamp taxes, etc. No one can guarantee the direction in real estate. No one. And any investor realizes that. Again, information on this site has been accurate. Also, something interesting is many people that have called the real estate market here the past several years aren't just telling other investors it's a good investment. They also invested their hard earned money on real estate here. And they continue to invest here. I know. I'm one of those people. I don't just tell my clients the merits of buying. I buy real estate here every year. In fact I bought more in 2006 and 2007 than I did in 2003 and 2004. And I'm still buying in 2008. The best thing for an investor if they have doubts, don't feel comfortable, don't feel knowledgable enough is to stay away from the investment. And this doesn't just apply to real estate. It applies to corporations, stock, oil, gold or anything else. Really understand the investment before you invest in it. I'm not one of those people that say buy real estate just for the sake of it. Those that follow this board know the calls I made for people to exit the real estate market over the past several years. There are reasons why I started investing in Argentina. You really need to take a good look what is driving the prices up. So again, please enlighten us on what better investments you recommend for locals to invest their hard earned money in. This is a pretty simple question for you so not sure why you can't answer it. If you are saying real estate is such a bad play here..... do tell what you recommend? Do tell what locals would feel more comfortable investing their money in instead of an apartment or land? I think you will have a very difficult time answering and there in lies the answer why real estate prices keep going higher. Unless there is a fundamentally systematic change where people trust banks or there is something safe that is good to invest in, I feel comfortable in my real estate positions and adding to my portfolio. Cheers. PS -- Definitely I think public message boards are always a good place for people to post their opinions. As long as the information is accurate I think definitely people should post. But you posting about people with "loose morals" is just wrong. Especially considering some of us that forecasted real estate trends here have been EXACTLY 100% accurate! | ||
| Benco Junior Member Username: Benco Post Number: 39 Registered: 4-2007 |
Interesting discussion. I do not have a particularly negative or positive view of the market, since I am lacking the necessary experience and inside information. But there are some points that I think are important to take into account: When looking at past performance of the market, take into account the devaluation of the dollar. Rising dollar prices are in part explained by the weakness of the dollar and have nothing to do with the performance of the real estate market in Argentina. Look at your charts in Euros as well, or better use a basket of currencies. As mentioned before on this thread, real estate is not a uniform market and highly depends on the area. Recoleta is not Buenos Aires and Buenos Aires is not Argentina. Prices have been rising fast in certain areas, but not at all in others. Check if your arguments are really able to explain these differences, general observations (safest investment in Argentina, all cash on the table, etc.) are of limited value. You need to make the right picks. Investing in Argentina is risky, and real estate is no exception. I think property prices fell by 50 percent within weeks during the last crisis (others probably know better). Do not only look at the years after the crisis, look at the long term (short term you will loose anyways due to fees and taxes). Not sure if over the past decades the return on real estate investments in Argentina has justified the relatively high risk. Of course it may be different in the future. For a foreign investor there are obviously all sorts of alternatives, like stocks, bonds, currencies, commodities, and you can invest anywhere in the world. No need to invest in Argentina. But the same is also true for wealthy Argentineans, who can easily buy real estate or other assets abroad (and they do, e.g. for tax "optimization"). I wouldn't put much weight on the argument that real estate is the safest investment in Argentina and that there are no good alternatives. People know how to get their money out of this country. I do not see why a dramatic downturn in the real estate market should be about to happen, although I am not really optimistic on the general economic outlook on the long run (that is another post...). Good luck to all. --- By the way, with respect to the original post let me point out that when saving 350 USD per month it takes 228 months to save 80000 USD. Months, not years. So that is 19 years, in contrast to the quoted 228 years. Please check your maths, since a factor of 12 matters to most investors. | ||
| Arial Intermediate Member Username: Arial Post Number: 163 Registered: 10-2006 |
Question: Is there any reason that Argentines cannot invest in precious metals, foreign currencies (probably not the best since all currencies are devaluing), commodities, etc? Why would it have to be real estate? Just wondering. | ||
| Apartmentsba.com Advanced Member Username: Saint Post Number: 407 Registered: 5-2005 |
Benco, I think you are making excellent points but I think much of it is common sense when you buy real estate. Certainly I am NOT saying ALL real estate is a good buy. I assumed that was understood from anyone buying real estate (it least it should be). I believe in real estate no matter in the world you are talking about the 3 most important things are 1) location, 2) location and 3) location. I'm VERY selective where I buy real estate and I assumed people understood that. I still say real estate is probably the safest investments for locals. You can try to argue with me but anyone that disagrees should explain their side objectively and explain what are some other good investments INSIDE Argentina for citizens here. Certainly at no time did I ever say real estate in Argentina is the safest and best investment for everyone in the world. In fact, again, I'll point out MANY times I've said it's NOT for the majority of the investors out there. In real estate buying in the right location is so critical but especially in Argentina. I'm very careful where I buy. For example, several years ago I bought several properties in Puerto Madero but I haven't purchased anything there for years. Some developments are between $4,500 and $5,000 per sq. meter. I do not find that to be a good value play. I still think properties can appreciate but I can still good good deals on real estate in Recoleta and Palermo and I feel those are the safest areas with the best return potential on both cash flow and capital appreciation so that is where I buy. I agree that for a foreign investor there are lots of risks if you don't know what you are doing, you don't know the areas well, you don't understand the laws well and know how it all works. Also, if you have a bad property manager you can have things go REALLY wrong. I can tell you horror stories. I literally get 7-10 calls/emails a day from both locals/foreigners that want me to manage their property. I simply don't. I don't manage anything I didn't buy for myself or my clients. For foreign investors there are LOTS of various investment options. Lots. But I think people are a bit confused. Many of the foreigners investing in BA are very savvoy investors that are well diversified and many have done well on real estate deals throughout the world. The same thing is played out all over the world....people have value plays and they move in and then move out when they don't think it can go up anymore. For the foreign market, BA is still a value play. Now, trust me. I've been all over Europe and the properties there it's Simply IMPOSSIBLE to get the yields that are possible in a town like Buenos Aires. People buy for various reasons including tax reasons, estate issues and tax planning, diversification and a hundred other reasons. For the local market, of course the really wealthy can send money abroad. There are Billions and billions of dollars from the locals abroad. But I can tell you for the middle class or upper middle class it's not so easy these days and they still believe real estate is a good play here. Lots of the buying here is NOT from just wealthy families. Quite the opposite. Lots of people have been saving for years, they are families that pool money together, parents that help out their kids buy a SMALL flat in a good area. The dream for a lot of locals is buying a property and they save up and eventually buy. Argentina is for the most part NOT an "I want it NOW" society like the USA where everthing is on credit and financed. Real estate certainly it's a goal for families and they save up and they buy and it's an investment they feel safe in. They know the government is not going to come in and take that away from them like even their own money in the bank. So Benco, I'm NOT saying real estate is the only play in Argentina. But give some examples for a local that you feel are great investments for them INSIDE Argentina. I'm not talking about investing their money overseas. I'm talking INSIDE Argentina. Sure, people know how to get money outside and do but I'd like to hear some arguments from all of you that are implying there are lots of good options to invest INSIDE Argentina.... present them..... Definitely anything can happen here with the Economy. History has been a pretty good indicator that things have a history of being unstable here, but I still say that in that unstability it makes real estate is better play. Also, consider at the crash it was one of the most devasting times for Argentina and consider why real estate prices went down. You had people that did have plenty of money in the banks but remember the banks closed and didn't allow people to take out their money. Now, I'm not talking about middle class. Imagine if you are a millionaire and your money is in the banks and you can't access it. The smart money got their money out of the banks but imagine what would happen in the USA or the UK or anywhere else in the world for that matter if the banks closed overnight and you couldn't access your funds. Certainly even people with money would be in trouble as we don't keep our cash under the mattress. One of the only ways for people to access their money was selling real estate. It was desperate times for locals. Even people that HAD money couldn't access it (or only access a few hundred dollars per month). Now these people needed to access their funds that were rightfully theirs. But some of them couldn't even pay their bills so it was a desperate struggle just to get by. So they had to sell. The sales were cash on the table. THAT is why real estate took a sudden downturn. No buyers and people selling. It's supply and demand. Now, once the banking got stable again and people could access their funds the prices rebounded VERY quickly. A lot of people simply don't understand this. So you can say prices skyrocketed since the crash but what they neglect to understand is that the prices were artificially deflated in the first place. Imagine the SAME exact situation if it were to occur in the USA. Where access to funds got cut off. (Certainly I'm NOT saying this will happen). But just close your eyes and stop and imagine IF it DID happen. What would happen? You would have nuts blowing up banks, it would be chaos. Look at all the crazy right wing groups in the USA. I'm sure people are shaking their head and saying things like "oh..Americans are very civilized people....things would be more orderly". That is NOT true. Let me ask you something. Why did the nuts blow up the Oklahoma City building? Because they weren't happy with the government. That's the answer plain and simple. Now imagine a scenario where you cut off access to funds from Americans. There would be pure chaos. How unhappy with the government would these people be then? That is what you need to think about. You can argue that it will never happen in the USA (and I would tend to agree it will never happen). But nevermind that. Just for the sake of argument.....IMAGINE if it did happen and ask yourself what would happen under that scenario and it's pretty remarkable to see how civilized these citizens of Argentina are. Please don't mistake my message either. I am VERY proud to be American. I still think the USA is the best country in the world. I think the business environment is the best in the world. I think the level of ethics is better than any country in the world. I think the way Americans do business is the best. I think the education system is the best in the world. In short, I love America and maybe I'll even move back to the USA someday because my passion for the country, it's people and the way of life. It's a country that I'd be proud to raise my future children in. But I'm also a realist and I'll always tell it how it is. There ARE some "broken" things about the USA. I realize now country is perfect and living in Argentina the past 4.5 years has shown me that. But I think we need to realize the faults of each country. So, you have that situation and that is why people simply don't trust the banks here. I can tell you the banks here are HORRIBLE!! Locals simply don't trust them and opening an account in Uruguay isn't so easy anymore for locals. Many, many banks in Uruguay are asking for documentation from the locals of were the funds originated from and a good percentage of the population in Argentina evades taxes so it's not so easy. I think intelligent discussion is great and the purpose of message boards. But more times than not over the past few years, I hear or read from someone or read on some message board a random post like "investing in real estate is dangerous...it will go down 60% in 2 years...". Then when I call them out on it or ask them to explain their position, or ask them to present other good investment opportunities for locals INSIDE Argentina.... funny thing....i usually never hear from them again.... Benco made a great point which ANY investor in real estate should be a given.... location, location, location in real estate is always important. Even those in the USA have been sheltered by investing in the right places. There are some areas that haven't fallen at all (not too many). Also, being very selective and investing in the right type of real estate in the right areas....many investors are still getting great cash flow via rentals on their properties.... (some not so much). Remember, all of my posts are MY opinion. Certainly I'm not saying I know more than anyone else. But for those that have your opinions, provide OBJECTIVE arguments for your side. Cheers all. | ||
| Benco Junior Member Username: Benco Post Number: 40 Registered: 4-2007 |
Arial, I suppose you just open an account with a broker and then get access to the assets traded on the various exchange houses. Personally I haven't done it but I think it is similar to opening a bank account. I suppose it is straightforward to buy foreign assets as well, what I do not know is how safe your titles/certificates really are when the argentine government tries to steal them. To some degree you will always depend on the integrity of financial institutions and the local judicial system. ApBA, you are certainly making valid points and yes, what I wrote was just what I think is common sense. Nevertheless it is often overlooked, e.g. people say "wow, the dollar price of this property went up 40 percent over the past years" without acknowledging the decline of the value of the dollar by the same amount. And you are right, I can not present a list of good investment opportunities inside Argentina, my point was that few people are restricted to invest inside Argentina. An interesting case are the private pension funds (AFJP) who were recently forced to sell their foreign assets, mostly in Brazil, and invest in Argentina. Now what did they buy? Apparently they have no good ideas either. A large part of their money is sitting on bank accounts, driving down the interest on fixed term deposits. Rates are below 10 percent, with inflation around 20 percent. In other words, real rates are negative and this is a clear sign of missing investment opportunities. My personal solution is to keep my money at home where it is not eaten away by inflation, and only bringing in what I need to develop my own business activities. So at least I know what I am buying... Happy investing to all. | ||
| Apartmentsba.com Advanced Member Username: Saint Post Number: 408 Registered: 5-2005 |
Hi Benco, Yes, I think you are right about many people not using common sense. It's ironic and really strange to me that some foreigners buy property here yet they rush into it. I literally get phone calls on a DAILY basis from foreigners that bought real estate here but then they had MAJOR problems after because some mistake was made or they didn't due proper due diligence. For example, many foreigners buy here without having an architect's inspection or an engineers report. Now, back in the USA they would never dream about buying a house without a proper inspection. But here in Argentina where there is more risk, it's 100% cash over the table, they don't speak the language, they rush into deals that they know little about. That can very often be a receipe for disaster. Certainly I'm not saying there is no risk here in real estate. Quite the opposite. There is a LOT of risk if you are buying in the wrong areas, you are buying the wrong types of real estate and you are buying "defective" properties. Common sense always prevails so that should go without saying. I think that is an obvious point that no one is saying ALL real estate will go up wherever you buy in Argentina. That isn't true. Be very selective where you buy. The plain fact of the matter here in Argentina is people simply trust cash or bricks. I've never seen a country quite like it. For the most part, the locals here don't trust in the stock market, they don't typically invest in start ups or their friends businesses or any other simple investments that are common in the USA. Here they are so distrustful (for Good reason!!) of the government and the banks. Investing in real estate all comes down to a "flight to simplicity" for them. They can easily understand it. They understand you save up, buy X apartment for $x and you will have that apartment until you sell it in the future for $X. You can have $X each month in rentals if you rent to a local or you can make $X each week renting to a foreigner (tourist). Another thing I have looked at over the years in my travels to many countries around the world. I typically take a good look at the investment portfolio (if possible) of politicians. Politicians I don't care in what country typically have an inside edge as they know many influential businessmen and they in fact regulate certain laws determining the fate of those industries. In Argentina I noticed that MANY politicians own pretty extensive real estate portfolios. Look at the Kirshners alone. They own something like 25 properties (apartments/houses/storefronts/buildings) and they are generating millions of pesos per year in rental income. Do you really think they are going to pass some law that is going to punish real estate holders? Very doubtful. Why? They would be shooting themselves in the foot. They would be punishing their colleagues, their friends, their family and their constituents. Not going to happen, IMHO. Look at the example of the former Economic Minister in the "toilet gate scandal". She was found with u$s 100,000 cash in her bathroom. Her response? "My brother loaned it to me to buy an apartment". That was her answer. Some of you just don't see the real dynamics of why real estate is going up here. Another thing. Keep in mind I've purchased literally HUNDREDS of properties in Buenos Aires over the past 4 years. I've purchased from several politicians including some high level city politicians. Now, it was interesting in several of the purchases I had to keep the politicians honest. What do I mean by that? I mean that in several purchases it looks like the politicians picked up these properties VERY cheap at some public auction and unexplicably they never paid any taxes on the property. Now, maybe a local wouldn't force them to pay but I told them they must pay all the back taxes before we would buy and we would have an obligation to inform AFIP (local IRS - taxing authority) if they didn't. Of course they paid all the back taxes. One case took 10 months to solve but we finally get our client through it. It's interesting all the ways these politicians are picking up real estate here. Now, I've always maintained that it's difficult here if you don't know what you are doing. Take this example I just gave you. I was retained by an American ex-pat living here for the past 5 years. His wife was a local and they didn't have any clue how they can solve this problem. They already paid a 30% boleto down payment which the politician didn't want to give back. Definitely you take this situation with some foreigner that has no clue and there is a LOT of risk. I completed the deal for him and he bought with all the back taxes eventually paid before the closing. I refused to close until the politician paid all the back taxes. It literally took 10 months to keep this deal on track. I agree with you Benco. I advise people that live in Argentina if they are foreigners to keep all their money offshore outside of Argentina. There is no advantage to having a bank account here in Argentina. NONE. As I mentioned before, the banking system here is horrible. It's quite amazing to think about but banks here have a debit and a credit tax. They charge you 0.6% every time you deposit a check and they charge you 0.6% every time you write a check. Benco is spot on target about keeping funds off shore. Also, there are plenty of other investments out there as well around the world. As I mentioned before over and over again. Investing in real estate in Argentina is NOT for most investors. It's for a certain type of investor that has the finances for it. Most investors around the world and the majority of the population doesn't have hundreds of thousands of dollars of CASH sitting in their accounts that they can easily access without leveraging. This isn't for everyone.... | ||
| Gloria Melgar Estevez Member Username: Glorita Post Number: 60 Registered: 12-2007 |
Mike, you are so on target on your analysis on how "Things work in Argentina"...it makes me question the fact that you are an American....are you sure you don't have any Argentine blood in you? Let me add something to the above post....in terms of houses that go to auction and in particular high end homes in good neiborhoods, the "average Joe" can forget on trying to obtain such property...the auctioneer is bought off even before the auction begins(la famosa "coima" Argentina). | ||
| Apartmentsba.com Advanced Member Username: Saint Post Number: 409 Registered: 5-2005 |
Ha, ha. Funny Gloria. Now, if I got a dollar for every time a local told me the same exact thing..I'd be a very wealthy guy. Yes, I've heard the same thing over and over here from locals. Before I moved here I studied the market VERY closely and since living here that has given me incredible insight on how things work in Argentina. You are also 10000000% correct about those public auctions. In the beginning I was convinced I would pick up properties cheap this way. Well, I quickly gave up as I determined EXACTLY what you mentioned. It's impossible. Coincidentally various politicians have picked up properties in these types of auctions. I tried in the beginning and then gave up as it wasn't worth the time. I came to the SAME exact conclusion as you mentioned. | ||
| Benco Junior Member Username: Benco Post Number: 41 Registered: 4-2007 |
Hmm, I am wondering how exactly they are cheating in a public auction. Is the buyer placing an artificially high bid and later pays much less (plus a bribe) in the actual transaction? Like registering a high value on the title with much less cash on the table? Sometimes there is not even an auction, as in the privatizations under Menem... what a corrupt country. | ||
| Gloria Melgar Estevez Member Username: Glorita Post Number: 61 Registered: 12-2007 |
Benco, yes as you say....a previous arrangement is made, coupled with a bribe. Bribes are very common in Argentina and you can find them in many business dealings. Business ethics is an oxymoron to many Argentines. Distrust of the government has led to years of disrepect of the law and consequently to such things as tax evasion for example. Many Argentines structure their business dealings in such a way to avoid taxation. Many business owners will prefer to pay a bribe then to pay a tax. This mentality is so ingrained in the citizenry that I can't see Argentina becoming a successful and respected country unless/until this is addressed. | ||
| Benco Junior Member Username: Benco Post Number: 42 Registered: 4-2007 |
Gloria, I agree on the mentality problem, and it is unlikely to change anytime soon. There are obvious things that need to be done to address corruption, e.g. the "Oficina Anticorrupcion" should be independent rather than depending on the government, as it is now. Are they going to examine the extraordinary income of the Kirchners? Certainly not. (I am not saying they are corrupt, but I would still love to see an independent investigation of their income sources. There must be more than rentals, and they should disclose it.) What I still donīt get is how an arrangement in a public auction would work. I mean you have the banks and other creditors who will check that the highest bid wins and that the corresponding amount is paid. They are the ones losing money after all, so they will check. Maybe I am missing something... | ||
| Apartmentsba.com Advanced Member Username: Saint Post Number: 410 Registered: 5-2005 |
Benco, Obviously you have NOT lived in Argentina long enough. The fact that you seem surprised by how this all could happen shows me you probably don't really know how corrupt this country truly is. Argentina ranks as more corrupt than many African nations for example. Almost daily you can read about some story in the paper about some corruption scandal here. Mayors bribing business owners (just happened again the other day I believe in Pinamar). I agree with Gloria. It's all a mentality and state of mind. Argentina can NEVER become a first world country without a systematic change. Many locals I'm sure don't like my company. I get 7-10 emails per day of people wanting me to manage their properties and I never work with the locals anymore. I stopped even trying almost 2 years ago. Why? I think my firm is the only apartment rental company in town that actually forces our clients to pay taxes on their rental income. When I told locals this a few years ago that they MUST declare the rental income they looked at me like I was crazy. That is when I knew I couldn't work with the locals. Even at some business seminars that I've attended there have been round-table discussions and I talk about all the high taxes for having employees and they all say I'm crazy as I have all the salaries in "white" and the payroll taxes here are extremely high. Also, paying all the required taxes and insurance makes them look at me as if I'm the one doing something wrong. I have hope that someday that will change but I'm not holding my breath. As I've always mentioned, it's a very tough place to do business in. Fortunately, real estate is a good field to be in as you don't have governmental officials trying to get bribes, etc. If you are paying the required taxes then you are fine. It's not like owning a bar or some club or some other seedy business where you might have to pay off cops or government official. That's what I truly like about real estate. It's a fairly "clean" business and I believe that's why locals like it so much as well. It's easy to understand and as long as the property is legitimate and the Escribano makes sure the title deed is not cloudy, as long as you pay your taxes you are fine (albeit most locals do NOT report any rental income on that property). Benco - I doubt you will get anyone to explain the ins/outs of how corruption works. Many Argentines don't know all the details but like Gloria mentioned, they know it goes on. Your mistake is trying to figure out how they can cheat you in a "public auction". That isn't the right way to look at it. The right way to look at it is more "how NOT can you get cheated". Yes, you are missing something. Same way that I'm sure there are commercial projects that probably have a bidding process but some how bids seem to always go to certain companies or contractors, etc. Don't think for a minute that there might not be some kick back arrangement. In fact, there have been scandals in the past and for every one that becomes public there are probably another 100 examples out there you never here about. Now, I love Argentina just like I love the USA but as I mentioned before, I believe in being honest and pointing out flaws in the system here. Benco - remember a better way to think and honestly I believe the question an Argentine would ask is NOT "how in the world could they cheat". They would ask, "How will they NOT cheat!!" | ||
| Gloria Melgar Estevez Member Username: Glorita Post Number: 62 Registered: 12-2007 |
Benco, I'm afraid that I can't tell you the details of any dealings that involve bribery as I have not ever been previ of such an account. I assume that each dealing is different and that in many, more then one participant has to "be payed off"...perhaps not even monetarily. I have heard of accounts that at times family of employees were given jobs in certain government positions in "exchange of misrepresenting information, repressing information, and fudging figures, etc. News of corruption is so common that the average ARgentine has learned to live with it as a part of the culture. Mike, I would love to be able to be a part of a meeting where an American tells a bunch of Argentines that they must be up to date on their taxes....hahaha...I would pay to watch and see the faces these people make at such advice. | ||
| Keith Mangan New member Username: Kreation Post Number: 17 Registered: 9-2006 |
Hi; Just to put my two cents in on the auction game: It is possible to buy in these auctions quite legally;but you will pay a "your not in the gang" tax. I don't have first hand experience of this but am about to walk into the game in a few weeks. Like I said I don't have first hand experience but from local knowledge; it is controlled from a "cosa nostra" experience..You can go with all the cash you like to public auctions but you will not get a thing.Someone is always there to outbid you.However whatever you bid is taken into account and it can/may be sold to you at that price but a lower book value..i.e,you go 240K it will be sold to you at 200K + a forty backhander; its an agents fee at the end of the day; it's up to them to pay their taxes.Not quite what we are used to; but if papers say 200 you end up in the white; but a wee bit out of pocket. For entertainment I am going to look into this for buying a car here; chances are I won't follow through on anything but I feel it could be good to see how this works;whether this comes as a warning or an omen is still to be seen..... I'm laughing at myself for even considering the idea but if something is worth it its worth it and at the end of the day we don't know who's paying what to who; government or otherwise. Benco (I am not saying they are corrupt, but I would still love to see an independent investigation of their income sources. There must be more than rentals, and they should disclose it.) In principle; I agree but when it comes down to it; if they done it and got away with it; leave it be.Whatever they done is small money in comparison to what it costs to find out; and this comes out of the taxpayers pocket.Forget about the past; just make sure it cant happen again.(check out Ireland Tribunals;ref Charlie Haughey and Berie Ahern) C.H raped the country for millions and bought an Island with it...(funny but true; I'm not sure how people didn't notice it) but the tribunal has gone into the high millions paying lawyer's to find out facts with nothing resolved after 18 years... Bertie ( Irish Pri-Minister; Taoiseach) is being investigated for not reporting 5,000 Irish pounds for tax purposes in the 80's yet the case has ran into millions for the taxpayer.Lets hope Argentina never makes that mistake.The only winners are the lawyers If I go through with the going to the Auctions; I'll let ye know. Chances are I may be talked out of it..  Keith} | ||
| WTMendoza.com Intermediate Member Username: Welcometomendoza Post Number: 161 Registered: 7-2007  |
So one day Juan called his good friend Pablo in the government: Juan: Hey Pablo, my kid just graduated college and I was wondering if you could help get a job in government? Pablo: Sure, look..I have a great position for him, the salary is 15,000 pesos a month, and your son doesn't even have to show up for work at all, in fact it is a direct deposit into his bank account. Shall I sign him up? Juan: Well Pablo, I appeciate that but isn't there something more down to earth that will give him experience? Pablo: I have another position that pays 5000 pesos a month, your son has to come once a week to show his face, and one at the end of the month to pick up the paycheck. Juan: Pablo..really ..thank you but I want my my son to have a job that will give him real world exprience, something where he has to work his way up the ladder. Pablo: Well Juan, okay but the only job posting I have for that pays 1100 pesos a month, he will have to send hs in resume for consideration, and he will be cometing with dozens of other applicants. | ||
| Benco Junior Member Username: Benco Post Number: 43 Registered: 4-2007 |
WTMendoza, I guess you describe what people here call "noquis"... Recently Macri, the new head of the city government in BsAs, and his team showed up surprisingly in government offices, counting the number of "real" workers with shocking results. Some noquis have been fired since, but there are legal problems. I had to laugh out loud when I read that Telerman, the former head of the city government, said he would have done the same in a second term. That comment really made my day. ApBA, to understand the level of corruption you donīt have to live here for long. As you say, it is in the newspapers every single day. Some examples of the last two weeks: - Pinamar with Porretti and Leonian, asking club owners for bribes, or they would close their clubs "for selling alcohol to minors" or other reasons. It also emerges that the former administration was not any better, that the clubs were "arranging" for decades and never paid for the use of public space. - The scandal about car imports by diplomats, involving cancilleria and aduana - A story about "La Rural" in Palermo at Plaza Italia, which was given away by the state several years ago at a ridiculously low valuation. - The scandalous accounting practices at the Obra social de Buenos Aires (OBSBA) - Thales Spectrum, a trial about a rigged tendering procedure under Menem - The Antonini case, making Cristina sweat And the list goes on and on. You learn that quickly - what comes with the years is probably frustration and resignation. Now public spending and concessions and such are notoriously prone to corruption. But an auction about real estate in foreclosure is so simple. The highest bid wins and you canīt walk away from a bid. Even in Argentina it should be possible to organize that properly. Maybe Keith will find out more details about how they cheat. More often than not everybody (except the foreigners...) knows what is going on and there are some political interests protecting the system. Hope you keep us updated! Cheers all. | ||
| Gloria Melgar Estevez Member Username: Glorita Post Number: 63 Registered: 12-2007 |
Benco, I have two friends that use to work in PAMI...the stories they have told me about the corruption in PAMI would make your hair stand on ends. It's frustrating as you say and to me when it concerns the most frail, in this case the elderly, it just breaks my heart. I love my country, and wish it were different, however I don't think that things will change in my life time. I often say I want to go back and live over there for many reasons...family, friends, the culture, food, ...but then the thoughts of corruption sober me up and I just give thanks to God that I have the choice to live somewhere else. | ||
| WTMendoza.com Intermediate Member Username: Welcometomendoza Post Number: 163 Registered: 7-2007 |
Gloria, growing up here for people like you, must make it difficult to justify "why to return" when you touch on these kind of topics, but don't forget the corruption in the US is much more hidden and sometimes huge - like Enron, implied Haliburton, look at the CDO/SIV's etc, etc..the list goes on... Why deprive yourslf of the family, friends, culture, and food when at least you can say you know what's going on and there is no way you can be fooled. Plus, you have a whole anchor now in a different country. Comon - take re-plunge cheers | ||
| Apartmentsba.com Advanced Member Username: Saint Post Number: 412 Registered: 5-2005 |
Gloria, I also heard from some people like you and the horror stories. I think there are probably 100 different ways those auction markets can be manipulated. I also agree most likely we won't see a systematic change in Argentina in our lifetime. It's just so embedded in society here. That will take a VERY long time to change. There are positives about Argentina as well but I think maybe you can have the best of both worlds owning a place in the USA and also a place here in Argentina. I plan to pick up a few houses in the USA starting in 2009. There are some things I miss about the USA after living in Argentina for almost 5 years. I miss the variety of food as well as other aspects of the quality of life in the USA. There are great things about both places. I know you mentioned you have a child and I'd say the educational system in the USA is one of the best in the world. You have private schools here in Buenos Aires but they are just as expensive as private schools in the USA. Both countries (the USA and Argentina) are great in very different ways. A shame that they both can't learn a bit from one another. | ||
| Roberto Board Administrator Username: Admin Post Number: 1571 Registered: 12-2004 |
It appears y'all scared Patrizio... School discussion can continue in education in Argentina | ||
| Apartmentsba.com Advanced Member Username: Saint Post Number: 427 Registered: 5-2005 |
Benco, One more thing I'll mention about public auctions just because I read an article yesterday in the paper that reminded me about how shady the system is. A judge here is facing impeachment for participating in an illegal association that stole property from detainees during the 1976-1983 dictatorship. Judge Emilia Marta Garcia worked as an employee of a notary office, where she allegedly signed documents changing the legal deeds of property belonging to people who were killed or disappeared. Now, if you are saying to yourself, "yeah but that was 30 years ago and doesn't happen today". That isn't true. Just last year the City arrested a big ring of people that included engineers, architects, judges, lawyers that were finding people that died and selling their properties (in many cases at public auctions)illegally. Now, they will be in jail for a very very long time but that doesn't make it any easier for the people that paid 100% cash at public auctions for these properties and fighting the next of kin on properties that should have never been sold in the first place. The thing is these public auctions I'm sure there are many legit deals but from what I've seen, there are lots of shady deals as well. My theory is why take the chance on having problems or issues. I use probably THE best Escribano in town and a former ex President of the Buenos Aires Escribano Association. I don't buy properties at auctions and make sure there are no issues with the title deed. You will find most reasonable people do the same thing. Roberto - I hope we didn't scare Patrizio off. That was not my intent. I truly believe it's good to have other sides of the argument if the other side fights for their side/cause objectively but unfortunately many times on public message boards that is NOT the case. They write something that can sound alarming anonymously and then when you call them out on it asking for objective, detailed facts, they disappear. If there are other sides of the argument. Post objectively. Tell all of us your experience in real estate in Argentina. Tell us if you own here, ever purchased here, your experience in real estate in Argentina, your returns, your other investment options. Then let people of the board read the posts objectively and let them decide. | ||
| WTMendoza.com Intermediate Member Username: Welcometomendoza Post Number: 170 Registered: 7-2007 |
There are a number of these cases across the country of tryng to get back property "taken" by the military from the 1976 to 1983 period - much is just starting - there was and still is alot of fear that there may be retaliation for making such a re-claim. There s a rather large tract of land very close to where I live that allegedly was taken by the military, divided up sold off in lots, the new owners, regular people , built home that are now 25 years old, and the original owners of the large tract,who live in another ountry now, are making claim back to all this property. What an issue....more so how important it is to be aware of the local history of what you are buying. In the aforementioned case, it would seem logical that the Argentine government should restitute the original owners with cash y listo. | ||
| Benco Junior Member Username: Benco Post Number: 47 Registered: 4-2007 |
Here is a piece of bad journalism about real estate prices in Barrio Norte, Buenos Aires: http://www.clarin.com/diario/2008/04/09/laciudad/h -03803.htm The article says that apartments in Barrio Norte are more and more expensive and exclusive, that prices went up by 18 percent in the last year, and 38 percent between 2005 and 2008. You can also read citations from real estate agents who say the reason would be enormous demand and a shortage of available apartments. This article confirms the lack of common sense that I have posted about before on this thread. The devaluation of the dollar and peso is not even mentioned, although it fully explains the numbers. Nor do they mention inflation - just about everything you can buy has risen in price at similar rates. And why are the apartments more "exclusive" when you take into account that nominal salaries have risen as fast or even faster? And then they cite people from inmobiliarias with views that are distorted by self-interest in an obvious way. If the numbers in the article are correct, then the real estate market in Barrio Norte has been flat for the last four years (in real terms). | ||
| Roberto Board Administrator Username: Admin Post Number: 1623 Registered: 12-2004 |
Benco, you are right on the money. It is the same as oil at $112 per barrel. How much of that is inflation (or dollar depreciation)? It doesn't take a very sharp eye to see that internationally, countries need more dollars to buy the same barrels... even more so as the dollar weakens. Her suprising tone stems from the fact that such *high* sq. meter prices are unheard of. What she misses is that today's dollars have little or nothing in common to dollars of the past. In my recent trip to Argentina I encountered two different versions... some 'escribanos' telling me biz has soften a lot since mid 2007 whereas a few smaller developers continue to invest. | ||
| WTMendoza.com Junior Member Username: Welcometomendoza Post Number: 228 Registered: 7-2007 |
While the dollar has some to do with it, there have been a few articles in the press in BA how the construction industry has ground to a slow trickle over the last year- is this true? The unheard of prices are probably relating to areas and zones not used to being further developed in the recent past...I would think | ||
| Roberto Board Administrator Username: Admin Post Number: 1624 Registered: 12-2004 |
Perhaps, Sean. But I can't remember an apt. of 100 sq. meter valued at u$d 300,000 in that area in all my time in Argentina, about 30 years. And prices in dollars have remained pretty much steady over the years. You would have to go back to the time of Martinez de Hoz and the "plata dulce" period when argentines were buying real estate -and electronics- in Miami like hot pancakes. And even then, I am not sure about those prices. Question is, does the exchange rate at 3 to 1 indicate a cheap dollar -or an overvalued peso- as it was the case 28 years ago when Martinez de Hoz artificially -by way of La Tablita- created a strong peso? Something is not adding up... More about plata dulce (spanish) It would be interesting to know how many cows were needed back then to buy an apt. in that area and how many are needed today... or barrels of oil or oz/gold or swiss francs. To compare with a basket of commodities and currencies. | ||
| Apartmentsba.com Advanced Member Username: Saint Post Number: 466 Registered: 5-2005 |
Prices HAVE appreciated significantly in the Recoleta area (as well as most good areas including Puerto Madero, Barrio Norte, Palermo) over the past several years. I would disagree that they are as much as $3,000 per sq. in Barrio Norte. While there ARE some properties at that price it's few and far between. Also, much just depends on the condition of the property. But anyone expecting $3,000 (so far today) will be hard pressed to get it. I've sold several properties in Recoleta in the $2,500 range per sq. meters in good areas. But even today I list some very nice properties that are totally renovated including marble bathrooms, totally new kitchens, etc. even in the most exclusive areas like Avenida Alvear (across from the Alvear Palace Hotel) and the listing price is about $2,700 per sq. meter. Much depends on the specific location, the amenities of the building (i.e. pool, 24/7 security, gym, sauna, etc), amount of natural sunlight, uniqueness. Property prices HAVE appreciated significantly. This is what I forecasted many years ago. To give you an idea, last year I sold a 68 sq. meter apartment for $2,500 per sq. meter. I have received some other offers on properties I own and usually they are around $2,500 per sq. meter. You have to consider the fact of what I have mentioned so many times over the last several years. There aren't too many SAFE investments here for locals other than real estate. Supply and demand will always dictate what prices are. | ||
| Roberto Board Administrator Username: Admin Post Number: 1626 Registered: 12-2004 |
The $2,500 range per sq feet for Recoleta seems to be holding well and I think has been steady for the last few years. I remember on of your posts back then where you mentioned that bracket. | ||
| Apartmentsba.com Advanced Member Username: Saint Post Number: 467 Registered: 5-2005 |
Hi Roberto, I wish it was $2,500 per sq. feet but it's per sq. meter. I know you just made a typo. (10.76 sq. feet in 1 sq. meter). Well, really it hasn't been the past several YEARS on that price.... it's been in the last year or so in some areas. Before that it was less. (Some areas like Puerto Madero has some projects as much as almost $5,000 sq. meter which is a bit insane if you ask me for today's prices). Much really depends on the exact street/location and the amenities of the building and also the condition of the property. If it's in bad shape, it can be less. If it's totally renovated then closer to that price or a bit above. Really, many people that are buying investment properties are buying new construction now. Personally I find older buildings more charming and they are built with a much higher quality of construction but many foreigners buying real estate in Buenos Aires are buying as investment properties and the rental occupancy rates tend to be higher in buildings with more amenities like 24/7 security, pools, gyms, saunas, etc. So I've seen a real shift over the past 1.5 years or so into those newer properties. Almost all of the new properties I buy for myself are in newer buildings with full amenities now. Hard to find these types of properties in Recoleta so most are in Palermo or the various neighborhoods in Palermo (Soho, Viejo, Hollywood). As I mentioned earlier in this thread, these days I'm staying clear on new projects that are totally new. There is too much uncertainty in those types of projects for me with the insane inflation. I typically only buy in projects now that are 1 year or less from being done. That way there is less risk. I've seen a LOT of smaller players that are building here that don't have much experience and they didn't account for inflation. Remember that it takes about 1.5 to 2 years (or more for a skyscraper). MANY of them didn't account for 30% or more inflation while the project is being built. More expensive labor, more expensive cement, materials, fixtures, etc. So, those investing in totally new "hole in the ground" projects need to factor this into the risk/reward ratio. Cheers all. | ||
| Tom New member Username: Tomatalki Post Number: 25 Registered: 10-2007 |
Okay, I've read thru the whole thread and I'm not going to touch the corruption issues but as far as investments...... I bought an apt in Polarmo to keep forever. I'm moving down and I don't plan to sell. I'm happy here. I am a realtor in the US. The reason investing in Real Estate works so well in the US is leverage. When you buy RE in the US you put !0%, 20%, 50% down and finance the rest . You are making 7% per year to who knows how much on THE FULL VALUE of the property. You buy a property for $100,000 with 20% down. The property goes up 7%+ ($7,000+) per year on your $20,000 investment or about a 30%+ return. LEVERAGE!!! Location matters. In Seattle, where I'm from prices haven't dropped so I wouldn't invest there. Other places prices have dropped and they will go up again. Buy here if you want a place. Buy in the US (especially now) if you want to make money. That's my 2 cents. | ||
| Apartmentsba.com Advanced Member Username: Saint Post Number: 468 Registered: 5-2005 |
Hi Tom. I agree with you that the use of leverage in the USA is so key and helps ROI because you aren't having to front the entire 100% in cash. However, that is the reason why many of the problems in the USA real estate market are there today. The banks allowed people to leverage too much and in fact, the banks themselves are leveraged too much. Most investment banks today are still leveraged to a factor of 30 to 1. In Buenos Aires it's tough for most investors because for the most part it's 100% cash over the table. That's why I always say it's NOT an investment for everyone. I actually like the fact it's 100% cash here as it means that people that can't afford to buy simply can't here. Those purchasing are those that saved up the money and are buying so it's totally different than the USA where you put down a small down payment and pay for the next 30 years. I've always liked that aspect about it here and keeping the market stabilized for the most part. I agree prices have fallen hard in the USA but like most economists now....I think it can fall further throughout 2008. I don't see a recovery until at least 2009. The credit mess isn't solved yet. I do plan to buy in the USA but I'll wait a bit more. I think in many areas, prices can fall another 10% to 15%. I do agree with you for the long-term prices will come back but I think it will take many years for things to stabilize. Good luck. | ||
| Roberto Board Administrator Username: Admin Post Number: 1630 Registered: 12-2004 |
> I wish it was $2,500 per sq. feet but it's per sq. meter. Thank you for the correction, Mike. | ||
| d New member Username: Davidcarpediem Post Number: 1 Registered: 12-2008 |
i read of this topic of few other ...Now since the financial crise who is involving almost all countries ... i have some question - I do understand that the real estate market is healthy in B.A because evrything is paid in cash . But the fact tha many foreigner own flats , and if they are going to need cash the 1 st selling will be their overseas properties ..So did the market is not going to fall down ( and also the fact that many people will now hesitate or will not have the fund to invest ) ? - I am thinking to buy around march 2009 in Palermo ( small place around 70 000 dollard )? wise ? Thanks for all your comments , good or bad , it well thinking  Do some people have different name of escribanos( i do speak spanish) , real estate ( mike , your website have help me a lot but i am not enough rich for you  )? cheers | ||
| Simon Fawkes Member Username: Expatba Post Number: 76 Registered: 1-2007 |
Hi David Prices in BsAs have remained more or less static over the last six months or so. It is true that some foreign owners are desperate for cash and are selling their properties here, which could exert a downward pressure on prices, although it hasn't really done yet. Equally, many Argentineans are/have brought their overseas wealth back to Argentina as there is deep concern that foreign banks may go bust and they could lose everything. The locals don't trust the banks here either, and so are sitting on piles of cash. The best investment here for their cash is buying real estate, which will most likely create an upward pressure on prices. Currently, the majority of people who have repatriated their wealth are sitting on it waiting to see what will happen to prices and if there will be a price fall, so most are not spending yet. The consensus among realtors seems to be that in 2009 prices will remain static or may possibly drop a few percentage points (estimates range from 2% to 10%), but that significant increases are unlikely. Only time will tell. This should be set against the backdrop of people moving house anyway -the day to day transactions of the real estate market - not all real estate is necessarily bought or sold as a pure investment. I hope this is some help Simon Fawkes Author, The Complete Guide To Real Estate Investment in Argentina, ISBN 0557001927 http://www.amazon.com/exec/obidos/ASIN/0557001927 | ||
| Mark Junior Member Username: Lostintheandes Post Number: 44 Registered: 10-2008 |
I think what has to be figured into this equation is that at the end of the day..an apartment simply represents rents. If rents reflect a ROI than prices are less likely to drop but if after paying taxes, utilities, management fees the return is minimal then prices will drop. I will even argue one step further...the very fact that there are no mortgages in Argentina is not a safe thing as suggested. It simply shows how scary the market is here as no one is willing to loan money on it. For a great lesson on how real estate works as an investment google Robert Schiller. You can make money as it fluctuates but thats it:it returns to the norm. If you still don't get it google Dutch Tulip bubble. Yep, a tulip is just a flower and an apartment is just rent. Mike and Roberto already made all the money. The rest of us should look for where prices are less than 10x rent. By the way before you get to upset at my point of view I am looking at real estate in Argentina.  | ||
| AMARAGGI New member Username: Amar Post Number: 14 Registered: 12-2006 |
Mark, I follow your posts with great interest and I am really learning a lot on investment and markets. Don't you think in the case of real estate that there are factors like attractivness of cities that have to be considered. A town like Bs As has still a great potential and not only because of Tango. Soon or later Argentinan politicians will have to face reality. If the system improves don't you think that this could have a leveraging effect on real estate? Most probably civilisation will learn to live without oil but food will always be needed and Argentina can provide some. I think that a positive bet on the development of a local middle class and of tourisme is not completely irrealistic. But I may be too optimistic. | ||
| WTMendoza.com Advanced Member Username: Welcometomendoza Post Number: 347 Registered: 7-2007 |
Actually there are mortgages in Argentina - typical terms are 10 year, max $300,000 pesos and high interest rates. | ||
| Arial Advanced Member Username: Arial Post Number: 299 Registered: 10-2006 |
In Buenos Aires, if you are a professional (high enough income probably) you can get a mortgage for 50% of the total price. You have to have the other 50% in cash. | ||
| Living in Patagonia Member Username: Soulskier Post Number: 64 Registered: 9-2008 |
In Bariloche, there are many good ROI properties from Cabaņas to private homes to apartments. BTW, we are very close to getting our final zona de seguridad approval and having the title put in our name (our friends just recieved theirs last week). When that happens, we will be celebrating as we scored quite the deal, and it was well worth the vale la pena! | ||
| Arial Advanced Member Username: Arial Post Number: 302 Registered: 10-2006 |
Perhaps I should read back through old posts but on what basis will you get approval? Has the government changed re the zona de seguridad? Please let us know if and when you are able to change the real estate to your name. And thanks for the update! | ||
| Living in Patagonia Member Username: Soulskier Post Number: 65 Registered: 9-2008 |
Arial, contrary to what you might have heard, virtually everyone gets approval, it just takes time. Our escribania only has one case of someone not being approved, and that was from lack of paper work submitted, even after repeated requests. There is a lot of misinformation out there, but I can list more than 5 foreigners that have received approval and the title is in their name, including one this week. My wife wrote an article on the whole process, I am happy to send it to anyone if they like. | ||
| Arial Advanced Member Username: Arial Post Number: 306 Registered: 10-2006 |
Two big, important questions: Can you do it now without doing a trust first? And how much time? I am interested in the article. Thanks | ||
| Living in Patagonia Member Username: Soulskier Post Number: 66 Registered: 9-2008 |
Yes, you can get it down thru a power of attorney (we did this). Time for my friends was 18 months, and us will be close to 20. When Cristina took over, she changed the department in charge, causing a longer than normal delay. I will send you the article as I respect the admin's request not to post links on the forum. Suerte! | ||
| d New member Username: Davidcarpediem Post Number: 2 Registered: 12-2008 |
Living in Pantagonia -> you are completely out of subject, here it is Overpriced Real Estate market in Buenos Aires! so i do understand you need to do your promotion but please do it in another discution. You have many discution ( real estate in argentina...) where your conversation fit ...HERE, he dont and it is annoying ! | ||
| Living in Patagonia Member Username: Soulskier Post Number: 68 Registered: 9-2008 |
D, I saw that Mark started discussing ROI so I chimed in. I don't really care one way or another if others buy in Patagonia. In fact, judging by the tone of your post, I don't think you would be such a cool neighbor anyways. | ||
| Arial Advanced Member Username: Arial Post Number: 307 Registered: 10-2006 |
Soulskier, thanks. After my last post, I wondered if we are on the same page. You mentioned good ROI properties in Bariloche which indicated to me you meant foreigners could now buy apartments or houses in their own name. Of course we could always buy lots and build business type stuff in our own name, subject to approval, of course. The problem was with the ready-built structures. But thank you for clarification about what is going on. Interesting info. | ||
| Living in Patagonia Member Username: Soulskier Post Number: 69 Registered: 9-2008 |
Arial, yes, we purchased a property with 3 structures. We live in one, and have the other 2 on a short term rental program with occupancy rates of 65% and 90% for 2008. | ||
| Mark Junior Member Username: Lostintheandes Post Number: 45 Registered: 10-2008 |
Amar, A nice touisty city fits into the equation by keeping the rents high and there for a better ROI. By the way I just helped someones ROI in Patagonia. The casita wes great thanks to the help from soulskier. m | ||
| Living in Patagonia Member Username: Soulskier Post Number: 70 Registered: 9-2008 |
Mark, hope you guys enjoyed it, pretty crazy weather for summer huh? | ||
| Georgio Armani New member Username: Georgio_93 Post Number: 1 Registered: 1-2009 |
Argentina is inexpensive simply because it has one of the most corrupt governments in the world. This is a red flag to major investors which is why the country is impoverished. The only people investing in Argentina from abroad are middle to upper-middle class Americans and Brits that made a few dollars back home with their own property and believe they can do it again from Argentinas low price point. These Americans and Brits are naive. When you have a country with no credit then you can only depend on foreign capital to purchase real estate. Do you honestly think your going to buy and renovate a property and then sell it for 100k more to an Argentine that makes $400US/mo, doesn't have access to credit, and can't sell their own "unrenovated" property? Do you think you will sell it to an American or Brit at that higher price point when they can find their own poperty for half the price at argenprop.com etc.? If you ever get a chance to visit some of these "luxury argentina properties for sale/rent websites" you will know what I am talking about. The properties listed are rediculously overpriced compared to buscainmueble.com or argenprop.com where you can find the same square footage on the same streets in Recoleta that are both remodled to the same level for 100k less! And even on the Argentine websites they are overpriced and Argentines know that and expect to get offers less than they are listing them for. You have to be a complete moron to buy at that higher price point subjecting you to pay thousands more in wealth tax every year which Argentines don't even pay because most live in the same apartment till they die. (No foreclosures for default taxes in socialist countries) You have to wonder about a country that charges foreigners 2.5% on your incoming wire transfers forcing your currency into peso and then forcing you to convert back to dollars at another 2.5% in order to buy property. As if the 2001 bank stunt the Argentine government pulled on its people didn't sink in. Then you have to pay 1.25% wealth tax instead of .75% like everyone else. (Because you are a foreigner) Next you have to declare all your rental income when you work with these companies at aregentina's socialist income tax rates. Plus 15% commission and other so called "nominal" fees at the end of the month for website advertising. All of these taxes were pretty much invented to "screw over" the foreigner. If you want a safer investment... buy in Uruguay or Chile where the banking system is very stable and you can purchase property with just a passport. Although your limited to Punta del Este for Uruguay. If you really want to live in Buenos Aires... keep your capital offshore and use the interest you make in the banks or US treasuries to pay for your rent the entire year. Remember... when you rent in BA, utilities are included and you don't have to pay maintenance fees, ABL tax, wealth tax either. Over the years I visited real estate websites selling property in Europe and South America and you can see the same properties for sale at the same prices that still haven't sold after 5 years. Europe is basically 3rd world now just like South America but just 5 times more expensive because they think they get American dollars back via tourism. Britain is slummy, crime is high and illegal immigrants are flooding into Europe from African and the Balkan states further bankrupting their socialist pension/welfare funds. The only 1st world countries left are: US/Canada representing North America, Russia, Switzerland, Luxemburg representing Europe and Japan and Singapore representing the Orient. If you must move to a 3rd world country because you cannot afford to retire in a 1st world one I would suggest looking into Panama for Central America and Chile or Uruguay for South America. Smart Americans exploit cheap access to credit to turn fantasy dollars into real dollars when they purchase hard assets in cash. Too bad 70% of we Americans use credit to buy their next ipod and work 60 hour weeks trying to pay the interest on their mortgages, financed/leased cars and plasma tv's. These same Americans have a net worth of zero or less than zero when you subtract what they owe against the fantasy equity they have in their homes. | ||
| Living in Patagonia Member Username: Soulskier Post Number: 72 Registered: 9-2008 |
Hi Georgio, great first post. I am an American lving full time in Argentina since 2005. I have bought property in 3 provinces in Argentina. I have made excellent profits on both our farm in Mendoza and our apartment in the Recoleta, both resold to Americans. We are now invested in Patagonia, and could surely sell our remodeled property for a tidy profit if we choose. There are still many opportunites to buy property, fix them up, and resell them at a large profit throughout the country. The key is doing your homework and due dilligence, then marketing it correctly when it is ready to resell. So, I respectfully disagree with your position. I highly doubt I am the only one who has "gotten lucky" either. | ||
| Mark Junior Member Username: Lostintheandes Post Number: 49 Registered: 10-2008 |
Interesting post Georgio. You are right about the corruption and goofiness in the systems here. I am renting for the very reasons you outlined but will buy when the time is right. Soul Skier, the key to your comment is since 2005. Ask anyone who came here in 2000 how they made out. Just because a rising tide raises all boats does not mean you were lucky though. You had the forsight and timing to do what you did in a sea that was rising. Had you made those same investments in the US beginning in 2005 you would not be sitting so pretty. Congrats. | ||
| Living in Patagonia Member Username: Soulskier Post Number: 75 Registered: 9-2008 |
Thanks. I was recently nominated for the golden telescope award from a friend back home. For my wife and I, the writing was on the wall, "take the money and run" it read loud and clear. | ||
| AMARAGGI New member Username: Amar Post Number: 16 Registered: 12-2006 |
Dear Georgio, Your post is interesting although I disagree with your position. First may I remark that Argentinans living in Recoleta or bying there are not the ones with 400$ per month revenue. I had during the three years I spent to find the right property the opportunity to use the different web sites you mention but I found them not so much usefull. I had to go myself through agencies, untill I found the property at the right price. The main weakness (At my view) of your position is the supposition that Argentina has no chance to get on the right track and that things will remain the same on the next 5 to 10 years. I consider that they don't not have any other alternative than getting out of their poor governance because their neighbours are improving, because Cuba, the leftist centre in this part of the world will evoluate also and finally because the ressources Argentina can supply (Agriculture, water,air, sun and tourism) are the ones the world will need and develop. As far as Panama don't you think there is a real estate bubble? And unless you are a golf fanatic or swimmer what can you do living in the Panama's towers. Life in Bs As is a lot more exciting. You have also to take into account the exchange situation very intereting for euro owners. In a recent article of Le Monde (french best newspaper) first world countries are considered to get poorer (with large public spending) when emerging countries (like S America) would improve their positions. Of course I may be wrong. We will see in the future. Cheers. | ||
| Georgio Armani New member Username: Georgio_93 Post Number: 2 Registered: 1-2009 |
You are absolutely right about BA being an exciting city. It has French architectural flare with beautiful women and things to do like New York City. I hope I didn't come off too strong to people reading my posts. I am just trying to express my point of view since I have some indirect experience. My grandfather immigrated to Argentina from Italy and owned a shoe factory and made lots of money there during Argentinas more prosperous times. Eventually when he died those assets just disappeared and never went to my family... something that would never happen in America where we now live and started over. I am just trying to warn people of Argentina's history which tends to collapse every 10 years on the mark since the early 20th century. Live in Montevideo or Punta del Este and take the fairy over to BA and play and enjoy yourself... you will thank me later. If you live in BA long enough all the money you accumulate will eventually disappear. With the global recession of the 1st world countries taking place you can count on decreased tourist dollars and decreased foreign capital from these middle to upper-middle class Americans and Brits. Argentina is moving towards the left and I have read of some communist uprisings which is detrimental to anybody who is affluent. A common cold for 1st world countries is like HIV for the rest of the 3rd world countries. If you want safe investments... 25% of your portfolio should be gold bullion, 25% in US treasuries, and 25% in US municipal bonds for some tax free growth, and the rest in real estate paid in cash.... Financing anything is for suckers unless you finance 50% or less of an asset and use the proceeds from the asset to pay off your investment asap. As for Patagonia... your success can be largely contributed because you are targeting upper class wealthy people that can afford to lose what they invest in vacation homes in one of the most beautiful areas in the world... Bariloche is a hidden jewel to most people in the world that do not have traveling experience or world exposure. | ||
| Georgio Armani New member Username: Georgio_93 Post Number: 3 Registered: 1-2009 |
Also, I forgot to add that if you are set on buying in BA despite the risks I laid out... don't buy anything over 100k. I believe 30k is sheltered from the 1.25% wealth tax. Also, use a reputable company to acquire your residency ASAP to get your DNI before you buy your property. Once you have your DNI you get 50% off your wealth tax obligation every year. Use Argenprop or Buscainmueble.com to pick out your property and then use an American agency to puchase the property that you are interested in. If current market value is 100k for the property... declare 80k when you sit with the buyer and record sale price so you are subject to less wealth tax and he is sheltered from tax he would have to pay if he doesn't reivest his capital within a year. Declaring 20% less won't raise any red flags when you go to sell but 50% will! Have your rental income deposited in an offshore bank acount with privacy laws... Uruguay and Switzerland are good. Tax evasion is not a crime in Switzerland! And finally, if you never plan on selling your property you are at an advantage since AFIP doesn't check for origin of funds when you buy, rental income tax evasion, payment of wealth tax, or declared title value UNTIL YOU SELL. This means if you never sell you don't have to worry about these taxes. (NOTE* if you have your DNI number you are not under the microscope of the AFIP! The Argentine IRS only utilizes their resources to check if FOREIGNERS did everything correctly on the buying and selling of real estate because they know they can get the money from you and not their own people that have nothing!) The best thing is buying an apartment for 70k with black funds, fixing it up for 20k, and renting it out tax free until you get your money back and then some and just never sell. You will save and make more money that way then if you declare everything that these agencies want you to declare. PS. Agencies just want to you declare everything because they are fearful for their own business. Which is why most people are confused when a construction company tells you to declare half the value and an American agency tells you to declare everything! Also... ask the owners of these American agencies if they are renting or have purchased their own home in BA. The answer is that they rent and want you to buy! | ||
| Mark Junior Member Username: Lostintheandes Post Number: 50 Registered: 10-2008 |
Not in total agreement but your last point is fabulous. And its true the world over Real estate agents make money talking you into investing, not investing themselves. I've always thought if the Ford salesman doesn't own a Ford than don't buy a Ford from him. | ||
| Mark Member Username: Lostintheandes Post Number: 51 Registered: 10-2008 |
Patagonia, My telescope is only silver. I got out of the US market in 2007 but got here too late. In spite of my giving apartmentsba such a hard time, I think his may be platinum. By the way my favorite wine is by Santiago Acheval. | ||
| Georgio Armani New member Username: Georgio_93 Post Number: 4 Registered: 1-2009 |
Apartmentsba sounds like a reputable company and I know for sure they will want you to do everything on the "up and up" but I guarantee it will be an expensive endeavor. If things go wrong, they are an American company subjected to American lawsuits but after much research I know for a fact that this Michael Koh is no dummy. I have noticed that he in fact does rent in BA and he has sold the majority of the properties that he had bought after the 2001 crash. Which means only one thing... he is cashing out and knows about the cyclical crashes that I am talking about. He is clever in that he is now not directly owning assets in BA but rather using foreign capital to generate rental income off of your properties via commission which pays his rent and allows him to live a very comfortable lifestyle within poor argentina. If there is a huge crash he can simply dissolve his company and move someplace else overnight and all the people who bought properties from him won't be able to sell without his help (since you need advertising exposure on the internet). Argentina will only get worse, the bubble ended in 2007. Be smart and wait for the next crash. (Which I am sure he is prepared to do since he has liquidated most of his real estate there) Real Estate tips: 1) Buy the cheapest property in the best neighborhoods (even if it needs a lot of work so long as there are no major structural problems) 2) Buy the smallest home on the block... real estate goes up by higher percentages on smaller than larger properties relative to their purchase prices and maintance costs. 3) Before buying, take into consideration maintance fees (are they capped or will they continue to rise... is there an itemization sheet documenting monthly expenses to all tenants?) 4) Property taxes- learn their structure and how they are collected (i.g. my aunt pays 12k per year in New York for property taxes on a 600k home that I wouldn't pay more than 50k for.) 5) Never rennovate your property until after you have paid off your mortgage (argentines and most italians don't have this problem- they most likely already have their properties paid and most likely will never rennovate lol) This is why, you rennovate before the mortgage is paid, you lose your job, your forced to sell in a down market you now lost your rennovation money and have a higher balance on your mortgage forcing you to walk away from your property with little to no gain. 6) Make sure your costs of ownership are no more than a weeks worth of work... if it is more than YOU CAN'T AFFORD THE PROPERTY... this is why most Americans never pay off their home and are forced to retire in the deserts of Arizona or New Mexico. 7) Never buy leasehold properties... always buy freehold. 8) Always look for political stability in a country... expropriation can and still does happen. 9)If you must finance your home, stay away from interest only loans, negative ammortization loans, ARMS, and pay-option mortgages. If you can't afford payments of a 30-year, 15 year, or 10 year fixed mortgage YOU CANNOT AFFORD THE HOUSE! 10) Typically homes are better investments than apartments/condos in the US because they appeal to families and families are the majority market. Outside of the US apartments/condos are better because the city is the only place to find work... suberbs/rural = poor for the rest of the world since they do not have the infrastructure like America has to put 5 starbucks within one block of eachother in a small town. Hope this post helped some people out! | ||
| AMARAGGI New member Username: Amar Post Number: 17 Registered: 12-2006 |
Hi George, Your points are quite interesting indeed. I tend to disagree with the society conception that they involve. I think you don't take nto account the cost of pleasure to live in a property you like and you eventually rent which is the case I guess of many retirees. Very frankly also I don't see any objection to pay a reasonable level of taxes and get back from the state services that allow a society to live and prosper. When you compare Italy to Germany guess which economy and society is the wealthier? The same should apply to Argentina. If they can get out of Peronism and back to a more structured aconomy you can be sure that the country could recover its past glory. If this happens real estate will be at a higher level than today. Does this sound completely unrealistic? | ||
| Mark Member Username: Lostintheandes Post Number: 52 Registered: 10-2008 |
Georgio, Michael says he has been personally buying apts in Recoleta/Palermo and has been quoted as saying he believes those areas will increase in value by as much as 12% so I am not sure I buy your assertions on him. Taking profits is part of business so if he is re-investing it back into BA then this does not mean he is cashing out(all though I think he should). As to whether he rents or buys: as I stated before "I wouldn't buy a Ford from someone driving a chevy" and I wouldn't buy an apt from someone who rents, but I have no reason to doubt his sincerity at this point. cheers | ||
| Living in Patagonia Member Username: Soulskier Post Number: 76 Registered: 9-2008 |
Georgio, I couldn't agree more about Bariloche and the Lakes District being a hidden jewel. I am still in constant amazement of the beauty of the area. Check out our pic of the week from the blog this week, that was taken on a hiking trail 5 minutes from our house. We feel extremely lucky to have found this part of the world and are pulling it off down here. | ||
| Living in Patagonia Member Username: Soulskier Post Number: 77 Registered: 9-2008 |
Mark, a year is a long time from now, are you sure Santiago will still be your number one buddy in 2010? | ||
| EAST WEST 3000 New member Username: Eastman Post Number: 3 Registered: 1-2009 |
One thing is for sure this Global Financial Meltdown will affect everyone. I think that we can safely say that the rule book has been thrown out the window on this one. What has happened to the Argentinean Middle class over the last 7 years is about to happen to the USA .... So Argentina can kiss all those US & EU Tourists goodbye! The Tourism industry in B.A has been Booming here in the last 7 years. It is just a mater of time before Argentina defaults again due to a (never seen before) global Slow down in the export/import industry. Argentina has little or no more cards left to play. Sit back and watch the Taxation laws change! Beware the foreign investor. | ||
| Georgio Armani New member Username: Georgio_93 Post Number: 5 Registered: 1-2009 |
Well Michael Koh has stated that he rents in BA and its on his website so I guess you won't be buying from him, right Mark? Also, he is not lying when he says "BELIEVES Palermo will increase in value by as much as 12%"... its not a guarantee! Secondly lets do some math... 200k apartment with projected increase of 12% = 24000 gain 24000 - 2500 (wealth tax 1.25%)- 300 (ABL)- 1800 (utilities and maintance fees for the year at 150/mo) - 3600 (15% commission for rental services)- 4080 (17% for argentine income tax) = 11720 profit This is a 5.8% net gain and this is IF you get 12% return. I personally would rather get 3.5% from a US treasury and not risk 200k for a measly 5.8%. But THIS IS JUST MY OPINION! lol The only reason Germany has a better economy than Italy is because they are arguably more capitalist, have more natural resources, and embrace industry more than Italy. Italians are borderline communist and the illegal immigration that is flooding there is putting a huge burden on the state (in my personal opinion Italy joined the EU to eliminate billions of dollars of debt and now is breaking every EU rule so it can get kicked out and regain sovereignty... I could be wrong with this theory though) I am Italian and I have to say that Italy went from being a 1st world empire during the Roman Empire to a 3rd world fragmented country... Italians still don't call themselves Italian but rather from what region they come from. 70% of Italy's GDP is based on tourism while a similar percentage of Germany's GDP is based on German car export which both are going to slow down when Americans stop buying them or traveling because of the recession. I am a true capitalist and believe that if you can lower taxation (especially on homes) you will increase the amount of $$ each family can spend on other things therefore supporting companies and businesses and increasing growth. Not everyone agrees with me... many believe in high taxes and more government control is better for a country than establishing a private sector. Yes... as I stated earlier, the global financial 1st world recession will kill 3rd world countries including Europe due to the fact that Brits and Americans which hold the majority of the wealth in the world per capita will cease to invest and travel over the comming years in aims to recover. Argentina is talking about being more leftist... (they just nationalized all the pensions. Now the pensions will be a slush fund for the government to pay off debt like the US has been doing with its social security pensioners) this is embracing Peronism/socialism, not moving away from it, which is why Argentina's future is looking grim. All Argentina has to do is get rid of the wealth tax and the bank transfer fees and they will get so much foreign capital it will be disgusting. They also need to establish credit at least for foreigners who have the ability to repay. They also need to establish a functional judicial system. This will make properties sky rocket in value but they don't want to do any of these things because they are such a huge welfare state and are against globalization and favor isolationism. Which is fine... BA will remain to be the 148th cheapest city in the world out of 150. | ||
| Living in Patagonia Member Username: Soulskier Post Number: 78 Registered: 9-2008 |
Georgio, while Argentina is at it they should also do away with famous Zona de Seguridad area and really bump up foreign investment. | ||
| Mark Member Username: Lostintheandes Post Number: 53 Registered: 10-2008 |
Very interesting debate....no I won't be buying from Michael. Your math forgot a very important point..rental income. He is saying you will get a 12% increase in value plus rent. It is the very problems you mention however that make this place a paradise for me. Its a beautiful country, the people are friendly, and my dollars go a long way. m | ||
| EAST WEST 3000 New member Username: Eastman Post Number: 4 Registered: 1-2009 |
Mark, Its beautiful but unfortunately very neglected.... the country is run by a bunch of greedy slobs. Yes, the food here is the last luxury that makes this place feel "cheap" However the inflation is out of control at over 20%. Prices of Vehicles i think we can safely say ... "is off the Chart" it is at least 30-40% more expensive than Europe and the US, plus 21% VAT !!! ..... I thought California was expensive !! | ||
| Georgio Armani New member Username: Georgio_93 Post Number: 6 Registered: 1-2009 |
I believe in the 12% annual rental income return because he charges a lot for his apartments relative to the initial price and renovation costs. I don't however believe in the capital appreciatiation per year. I periodically check his website and much of the information about price per square meter in Recoleta has been the same for a few years now at $2000/square meter. I still find most properties on argenprop.com and buscainmeuble.com for $1500/square meter in Recoleta. Argentina is nothing like the US. They don't actually have a "real estate market". In the US... when jobs decrease and wages go down (or there is a recession), so does the real estate market in the given area. (IN RECOLETTA THE AKING PRICES STAY THE SAME) Prices in the US are also calculated based on comparables (what a house actually sells for within a 1 mile radius with similar square footage. Appraisals are conducted and priced up or down based on whether you have a pool, landscaping, etc. Also, people in the US can't just make up a number to sell their house for because a real estate agent will not list something that is too much higher than market value due to appraisal and financing constrictions. For example, if I have a 500k home paid for in cash that I am listing for 700k. When the buyer applies for financing and is approved for 80% of an appraised value for my home of 500k he will only receive a 400k loan from the bank. This buyer has to come up with an extra 300k cash and knows the licensed appraiser only gave a 500k value and is aware that the home is overpriced by 200k. No mortgages, appraisals, or bank equity assurance departments to deal with here in Argentina. Therefore, some guy asks for 200k for his 100k valued home and it just sits on the market for years on end. (Value is determined by square meters, neighborhood, floor, luminosity and whether it is located in the front or back of the building)But this "value" is subjective depending on who you talk to since there are no institutions or appraisers that can confirm or measure value officially) So most people just agree on the price per square meter rule... $1500 for Recoleta, $2500 fo Puerto Madero etc. Basically they wait years for some stupid American or Brit with money to buy their overpriced home. In short, every Argentine's house is a potential lottery ticket that they hope to cash out on. It is a sad state of affairs. Occasionally they do get a fish "hook, line, and sinker" but most of the time there delapidated apartment just sits on the market for years. The only beautiful spot in BA is Puerto Madero because it is new and clean. Recoletta has people with money and it is safe too but a lot of the buildings look delapidated and the rest of BA is a slum outside the tourist hotspots but it is a city. NYC and LA have really bad and ugly areas too. Dollars do go a long way, won't argue there. Reasons for living in BA over most other cities: 1) Cheap... dirt cheap. As inflation rises, we Americans are sheltered because we just get more peso to the dollar 2) Beautiful women and really easy to get. In California, women are only interested in your $$$. Actually women all over the world are only interested in your $$$ lol. Except in BA you only need 400 pesos while in California you need a net worth of at least a half million lol. This way they can divorce you after a year and get 50%. Gotta love community property states! 3) Food is great! 4) Utility costs are laughable! Run the AC all you want! 5) Things to do... theater, music, art, soccer, horse races, restaurants, shopping (not my favorite thing to do but chicks love it). | ||
| Georgio Armani New member Username: Georgio_93 Post Number: 7 Registered: 1-2009 |
I am not to concerned with the price of cars issue. You don't need a car in BA and most of Europe because so much capital is invested in cheap public transportation. In the US if you don't have a car you DIE! Can't even buy groceries without walking a couple miles. I don't look at VAT taxes too much... I just care about how many US dollars it costs me "out the door". Even if they have a VAT tax of 100%. If it is 100% of 1 peso for a tube of toothpaste, than it is still $1.50 US cheaper than what I am used to paying. Currency conversion is the most important issue you should be worried about which is why I would never retire in Europe now. | ||
| EAST WEST 3000 New member Username: Eastman Post Number: 5 Registered: 1-2009 |
Euro has never looked so attractive for US investor ??? The Dollar has been slamming the Euro the last 6 months. ..... in a years time you will wished you did get out of the dollar to euro! Right now Swiss franc is looking sweet for the dollar!! oh ps. HSBC bank will transfer any amount of funds ($100,000 min) to any location of the world Free of charge! inc Argentina. | ||
| EAST WEST 3000 New member Username: Eastman Post Number: 6 Registered: 1-2009 |
Another thing. Cheap is not always good. Most of the the produce here in Argentina is the lowest of the low from China! Crap that would never pass US & EU regulations, so it gets pumped to the 3rd world countries. That cheap toothpaste you mentioned could be loaded with lead! Hey if i wanted cheap i could just by all my goods from a 99c store, Right ? | ||
| Living in Patagonia Member Username: Soulskier Post Number: 79 Registered: 9-2008 |
EastWest, for those with dollars, Argentina is still a very cheap place to live on many fronts besides food. True cars and electronics are more expensive, but how many times to you buy those? | ||
| WTMendoza.com Advanced Member Username: Welcometomendoza Post Number: 353 Registered: 7-2007 |
Happy 2009 to all ! Here is horseback that we and some friends and all of our kids did on Jan 1 at 10,000 feet in the high Andes behind Mendoza City:  Georgio you make some interesting points, and I dont defend real estate prices because I defend buyers, but you should be aware that there are more than just middle upper Americans and Brits investing in Argentina You are identifying a certain segment of the market place but that is not the only thing happening. Also, its not the country that charges you 2.5% incoming wire fee, and its not the country that forces you to convert the pesos back to dollars. These are all terms that a buyer negotiates with a seller. Trouble is, most buyers dont know about this until it is almost too late. This is why it is important for buyers to have proper representation with them when they negotiate for the first time in Argentina. It is not surprising you may have had bad experiences in buying in Argentina you have to know the language and traditions well, and like I said , be represented properly. Not being represented properly is probably the biggest problem many foreigners have. Argentina is not for everybody. It is a very unique culture here, much more exciting than Uruguay and Chile, but as you say, more risky if you mis-step. In fact, as many have often pointed out, once you can do business here, you can do it anywhere. Its good training ground, lol. Great job on some of the rest of your points and tips and tricks Jamie that is an excellent picture!!! | ||
| AMARAGGI New member Username: Amar Post Number: 18 Registered: 12-2006 |
There is something basically wrong with the cycle theory (see Galbraith) it is the belief that nothing changes and everything repeats. Why should 10 years be such a special date for Argentina? Why should this country be condemned to never get out of its problem? If you look at what it can offer in view of the changes that the climate reorientation will force I think it is not unrealistic to agree that Argentina has some cards to play. I think also that many people would be quite pleased to get a 6% or 5,5% return on investment with a garantee capital. Most of them don't have any telescope at all and don't read on the walls. So they are like me loosing some money (fortunately not a lot) in banks collapseS like Fortis, Amro, Royal Bank of Scotland or Lehman Brothers not to mention Madoff. So real estate can still be attractive for some poorly trained investors. And Argentina offers in Bs As a cosmopolite and cool life that is rather unique. | ||
| Georgio Armani New member Username: Georgio_93 Post Number: 10 Registered: 1-2009 |
Nice pictures you guys! Fantastic views! I would never convert my US dollar into Euro until I get a 1/1 ratio or better and I was planning to move all my eggs to Europe. Otherwise I rather move my money to British pound if and when it ever gets to 1/1 like it did one time in the mid 70's. British pound has less currency in circulation so it will always remain more powerful than the US dollar or Euro unless there economy collapes like it once did in the 70's. Which will make it a good time to buy. I am not a fan of the Euro... currently it only has 25% of the worlds cash reserves and isn't backed by any hard asset like gold. The US has tons of gold (although it no longer has as much gold as currency anymore) and has 70% of the worlds cash reserves. The US dollar is still the king of currencies. All you need is US dollar and gold and you are stable. | ||
| Mark Member Username: Lostintheandes Post Number: 54 Registered: 10-2008 |
Amaraggi, <cycle> Before an outcome changes(another crash) an input has to change. What is different now. 1. Corruption is the same, 2. peoples expectation that the govt. needs to take care of them is the same, 3.and a complete lack of fiscal responsibility by the powers that be is the same, driven by numbers one and two. m | ||
| AMARAGGI New member Username: Amar Post Number: 19 Registered: 12-2006 |
Hi Mark, Many things have changed: dictature is no more a possibilty end of cold war globalisation devElopment of neighbours (Brazil, Chile) Energy crisis (need of bio oil) End of Castrism (death of Castro, new US administration) End of Chavez (he will not be allowed to represent himself) Opposition inside the peronist party Impossibility to inforce laws (look at the defeat in the agriculture tax conflict) Corruption of course is a problem but it should decrease and after all it is present in many first world coutries (Dick Cheney, Bill Richardson, Eon, Maddoff, Dumas (in France), Siemens etc, etc) In all counties people are looking for state assistance. The finance crisis in the US is the best example of extreme "socialist" measures. It was just impossible not to adopt them. For the same reasons the bet that Argentina improves does not seem too irrealistic. | ||
| Mark Member Username: Lostintheandes Post Number: 55 Registered: 10-2008 |
ahh the eternal optimist. As someone who lives here and loves it, I hope you are right. Unfortunately in a micro economic place like Argentina all the regular laws of logic apply. The US has avoided them because they are so huge but mark my words...no one can avoid the wages of fiscal irresponsibility. If you live on credit sooner or later you or your kids have to pay; even if you are the US of A. | ||
| Georgio Armani New member Username: Georgio_93 Post Number: 12 Registered: 1-2009 |
In response to Amaraggi: I believe you are an optomist. Most Argentines do not share your sentiments simply because they have been through so many tragedies. 1) Dictatorship is always a possibility, especially with a weak judicial system like Argentina has. 2) Neither the cold war nor global terrorism effects Argentina. These were/are primarily 1st world issues. 3) Argentine remains to be an isolationist country. Its only tie to globalization is exports. It's when you start importing mass goods (and not taxing them heavily) that you truely become emersed into globalization. Also, Argentina does not embrace free markets. 4) The development of Brazil/Chile is a result of embracing capitalism over socialism. Good for Brazil/Chile, bad for Argentina since there is no way for it to catch up with its current philosophy. 5) Argentina has plenty of oil which is why it is so cheap. Cheap oil isn't always good. They need to exploit that cheap oil to industrialize the rest of Argentina and connect the major cities more which they currently suspended. 6) The new US administration will not move towards the right but towards the left with Obama. You will see more entitlements and larger government which will hurt the US even more. Americans don't care about Cuba... the only thing we like is their cigars which we buy from online vendors in Spain and Canada etc. 7) Chavez and Obama are the result of liberalism's victory over conservatism. Don't elect the most competant individual, elect the minority. Because after all, diversity is more important than competance. White European rule was the best thing that could have happened to S.America and the only reason why you have cities like BA in the first place. Look what happened when Europeans pulled out of Africa, Mexico and most cental to south American countries like Columbia, Bolivia, Paraguay, Peru etc. Are those places you would want to live in now? 8) Opposition to the Peronist party is a start but unless the people understand that hard work, self reliance, and low taxation are the way to the future for their children then nothing will change. 9) They were always good at making laws but enforcing them seems to only happen when there is a dictatorship. 10) You can get away with corruption when the people have 3 things: food, shelter, and security. America has that, this is why America can get away with it. The assumption that socialism is going to fix America is false. There is not one superpower in history that was socialist. | ||
| Simon Fawkes Member Username: Expatba Post Number: 77 Registered: 1-2007 |
Sorry for coming to this a bit late. Georgio - some of your points are good and valid, others are not. To say all Brits and Americans who invest in Argentina are naïve is rather wide-sweeping. Sure, there are some naïve investors who fall for the websites aimed at foreigners that you mention, but there are many who do due diligence and see beyond these foreigner rip-off merchants (and yes, there are rather a lot of them). It is correct the wealth tax is higher foreigners than locals, however Argentina is hardly unique in doing this. Until recently even Spain did the same (until the EU ruled it was illegal to treat other EU residents differently from nationals - although I believe there's still a differential for non-EU residents). A good rental agency won't charge you for website advertising or other fees. They will take an agreed percentage of any rental they make (or agree a base level with you, and stick their mark-up on top). If they are managing the property on your behalf you can expect to pay US$60-US$80 a month for this service (plus the expensas). You shouldn't be charged any other fees. In 2006 whilst researching the first edition of my book I contacted nearly 100 agencies posing as both a potential landlord and tenant. Most agencies didn't impress me or make the grade and in fact there's only 2 currently in BA that I would actually recommend. There are many ways, both legal and illegal, to bring purchase funds into the country without paying exorbitant fees. A canny investor will research the possibilities. I agree that I don't think prices in BA will rise substantially in the short term - however neither will they drop like they have in some countries where demand, fuelled by easy borrowing, has driven up prices to ridiculous levels. Property transactions in Argentina are underpinned by hard currency (not easy credit) which leads to stability. A prudent real estate investor will look not just at capital growth but at rental income (yield). If you do the sums correctly and it shows a reasonable positive cashflow then a property could still potentially be a worthwhile investment. The moral of the story is that investors need to research the market thoroughly and do proper due diligence. Never accept anything at face value without checking it out throughly. Regarding buying anything over 100K - foreigners no longer get the property is less than 260,000 pesos exemption, and now pay wealth tax on the entire amount, regardless of value. As for expropriation occurring, this isn't going to happen. Property rights for individuals are guaranteed under the 1853 Argentine constitution. Even under dictatorship/military/peronist governments in the past this has always been respected as an absolute. Now, with global world media and the global economy I really can't see this changing. As for Britain is slummy yes, that's true in parts, but it's certainly not true for the whole country. Parts of Grand Buenos Aires are slummy, but I wouldn't tar the whole of Argentina with that label because of it. Cheers Simon Fawkes Author, The Complete Guide To Real Estate Investment in Argentina, ISBN 0557001927, http://www.amazon.com/exec/obidos/ASIN/0557001927 | ||
| Living in Patagonia Member Username: Soulskier Post Number: 82 Registered: 9-2008 |
Nice post Simon, you know what time it is! | ||
| Georgio Armani New member Username: Georgio_93 Post Number: 13 Registered: 1-2009 |
My sweeping statements about Brits and Americans fall for the majority investing in BA. Usually when I make sweeping statements, it is true for the majority group. I don't think anyone can express an opinion that holds true for everyone. The fact that a wealth tax is higher for one group of people vs another is yet another shining example of how Europe preaches equality via socialism/communism but doesn't actually practice it. Argentina has adopted many aggitating qualities from Europe. Apartmentsba.com charges website advertising fees. Does that mean they are not good? I have heard the contrary... its just if you want things safe you will have to pay double in Argentina which simply makes the country "not so cheap" anymore. Argentina is like my father's country of Italy. It is not illegal until you get caught (and you wont get caught because of the beaurocracy). Which is why EVERYONE cheats the government if they can. Hence the "black and white" and sometimes gray system you hear people talking about. Yeah, prices rarely drop... they just stay the same and never sell like Italy. Argentina is a stable country in that it will never garner its former wealth. I certainly have never advocated "lack of research". In fact I am hoping people read my posts to get a better sense of the reality of what it is like down there and to be wary of all of these investor sharks. All I am saying is that if you want to make money in Argentina it is through rental income, not capital appreciation. Thanks for the update on the "property exemption" being obsolete for foreigners. This just further supports my disdain about the wealth tax and owning property in Argentina. But if you read all of my previous posts you will see my comment about recommending the acquisition of a DNI number before ever attempting to purchase property in BA. Therefore the exemption should still hold true if you follow my advice. What about the property that was expropriated from all those missing persons in Argenina during the military junta? I think Apartmentsba mentioned that tricky title deed jive in an earlier post on this thread. Britain is slummy... sorry if I disagree. If its not the filth from London its the weather everywhere else in the UK. I live in Southern California. If you are from the east coast or the UK you really haven't been spoiled or understand that you don't need AC or heat all year round here. | ||
| Arial Advanced Member Username: Arial Post Number: 309 Registered: 10-2006 |
Simon, as always, thank you for your informative posts. I do have a question. When you write: It is correct the wealth tax is higher foreigners than locals, however Argentina is hardly unique . . . I thought I understood how this works but just to check, can you please define foreigners in this sentence? Is a foreigner someone who is not a citizen of the country and who has no residential status? Or is it one who is not a citizen but has temporary residency? Or one who is not a citizen but has permanent residency? Or is it any person who does not hold Argentina citizenship. Sometimes the meaning of the word "foreigner" is not clear on this forum. Thanks. Thanks, Arlean | ||
| Living in Patagonia Member Username: Soulskier Post Number: 84 Registered: 9-2008 |
I believe a temporary resident with a DNI has a more favorable tax basis than those without a DNI. | ||
| Georgio Armani New member Username: Georgio_93 Post Number: 14 Registered: 1-2009 |
If you are NOT a citizen OR do NOT have a DNI number then you are a foreigner. This rule is for how AFIP (Argentine IRS) catagorizes foreigners from non-foreigners for tax purposes. | ||
| Living in Patagonia Member Username: Soulskier Post Number: 86 Registered: 9-2008 |
Well as a temporary resident with a DNI, my tax structure is bueno, toque madera. I am pretty sure you can't get a DNI without being a temporary resident first. | ||
| Arial Advanced Member Username: Arial Post Number: 310 Registered: 10-2006 |
Okay, Soulskier. Thatīs what I wanted to know. I have a DNI but still consider myself a "foreigner" because I am not a citizen. So I was a little worried if the tax structure was worse for "foreigners." But if it is good for you--thatīs good enough for me. And of course you are right--you have to be a resident to have a DNI. Also, Mendoza, while I am at it, I think you wrote that the US gov would not deposit into a foreign bank. Just letting you know that you were right. In response to the Argentina governmentīs new requirement, I got a letter from my bank affirming that I do have an account. Also a letter from the Embassy stating that the US will not deposit into a non-US bank. My attorney is going to present both to imigraciones and see how they handle it. | ||
| EAST WEST 3000 New member Username: Eastman Post Number: 7 Registered: 1-2009 |
again .... HSBC Premier Account, will deposit anywhere there is an HSBC location in the world ...free of charge, with minimun of $100,000 us. | ||
| Arial Advanced Member Username: Arial Post Number: 311 Registered: 10-2006 |
Yes, Eastman, I understood what you wrote about HSBC. But the specific instruction from imigraciones was that I must change my Social Security deposit so that it is direct-deposited into an Argentina account. Not that I deposit it from another bank. However, my attorney now advises that he submitted the papers described above and imigraciones says they will accept it and everything is fine. So as far as I know at this writing, things will remain as they are. I am now awaiting my DNI renewal. If anything changes I will certainly let everyone know. | ||
| EAST WEST 3000 New member Username: Eastman Post Number: 8 Registered: 1-2009 |
open a us bank account in your country deposite the funds and give the the atm bank card to the person that needs funds. when emptied close the account. (bank accounts are like email accounts).... now come on ..... if it is a one time small amount ... wire it ! weston union etc etc. How is that !!! | ||
| EAST WEST 3000 New member Username: Eastman Post Number: 9 Registered: 1-2009 |
Whats a bit of plastic between friends !!!!  | ||
| Apartmentsba.com Senior Member Username: Saint Post Number: 674 Registered: 5-2005 |
I just got done reading this thread. I'm super busy now but I'll post an in-depth response this weekend. You all sure have been busy since I've been on vacation. There are some really good posts. I do agree there are some valid points but some of them are in correct as well. Georgio Armani - I liked some of your points and I'll respond in detail but already I'll say some of your posts about me are wrong. I own more real estate here now than I did in 2003, 2004, 2005, 2006 and 2007 so some of your statements that you made were inaccurate. Even today I have turned down a few offers I got on properties near my asking prices. So you need to be careful on making false assumptions. True, I did sell a few properties but with every sale that I've made I've invested that money back into other properties. Mostly selling bigger properties and buying smaller properties. Again, lots of good points. I'll go through this weekend and post in in-depth response. One thing is for sure. Things here are definitely getting more expensive. I came back to Argentina from a trip to the USA and I came back to an electricity bill that was 300% more than usual. Granted compared to other countries the rate is still pretty inexpensive but this isn't stable when a utility company raises your rates 300% overnight. Very troubling to see. | ||
| WTMendoza.com Advanced Member Username: Welcometomendoza Post Number: 365 Registered: 7-2007 |
AptsBa welcome back - yeah daddyhood certainly changes things doesn't it? congrats. Electric: There is for sure no overnight factor here This has been an going topic in the news for the last 8 years now, even since the 2001 devaluation. To sum it up quickly, the rates have been pretty much frozen for years, to help protect the average Argentine Joe against rate increases after th devaluation. International observers warned this is not a good long term plan. Inventors, and foreign residents in Argentina absolutely have been loving this, because it means electric bills much, much lower than in their home countries. Several weeks back, the government announced the inevitable, that they would be "unfreezing the rates and getting them back to "normal market standards" through a tier structure that charges a higher user more money (I believe anybody over 1000 kw a month) For example, in our case for a 3 bedroom house in Mendoza where we use waaayyy too much electricity already (averaging about 1400 kw a month, we have been averaging about 110 pesos a month. Based on the new tiers our rates have now gone up to close to 200 pesos a month. As you can imagine, this is an evolving story, and everybody and their brother is really upset about this, registering official claims with the electric company. Apts Ba I suggest you register the claim with the electric company, to keep with the evolution of this topic. Good luck. | ||
| Apartmentsba.com Senior Member Username: Saint Post Number: 675 Registered: 5-2005 |
Ok. I will give my 2 cents on some of the past few comments. (Thank God I type very fast). Georgio - again, some of your comments are good and I actually agree with some of them. I respond to some things I read below. Georgio wrote: "The only people investing in Argentina from abroad are middle to upper middle class Americans and Brits that made a few dollars back home with their own property and believe they can do it again from Argentina's low price point. These Americans and Brits are naive." Mike's response: I disagree with this point Georgio. While true some are in that category it isn't limited to just that group. I should know as I work with lots of investors. I do agree many are upper middle class but there are also lots of very wealthy and also funds buying real estate in Argentina. Also, lots and lots of foreign investors here that sold off part of their stock portfolios to buy here in Buenos Aires in real hard assets don't feel so naive. I would think the typical investor in Citigroup, Lehman Bros, Washington Mutual, Wachovia or pretty much anyone that invested in any type of bank or financial institution the past few years feels more naive than an investor in property here. Keep things in perspective. Many of those stocks will never recover and went to $0 or are going to $0. The same can't be said for real estate in Buenos Aires or Argentina so keep that in mind as a comparison. Many of these people did sell real estate in their home countries and made a good profit and looking to repeat the same thing. However as I've mentioned many, many many times. You must really look at all your motivations and reasons for buying real estate here in Argentina. I've said 100 times there are lots of different reasons for buying and each person has to see their personal situation. I've said and I'll continue saying that for the majority of investors out there. Real estate in Argentina is NOT for them. Besides the net worth aspect of it and cash on hand, you have to think about all the other aspects of this type of investment. I consider real estate a long-term investment. I don't buy to "flip". Sure I've flipped before but I don't go into real estate buying to turn around to sell quickly. I don't think that is prudent. Real estate anywhere in the world is tough on rental properties but I think here in Buenos Aires it's even tougher with all the aspects dealing with the local system. Many people just don't have the mentality, patience and fortitude to deal with the possible many problems so I'll repeat again that investing here is not for the majority of investors out there. Georgio wrote: "When you have a country with no credit then you can only depend on foreign capital to purchase real estate. Do you honestly think your going to buy and renovate a property and then sell it for $100k more to an Argentine that makes $400/US month?" Mike's response: Even with the big boom with foreigners coming to Argentina and buying property here over the past several years. LOCALS have always been the driving force and the # of transactions have always been the force behind the # of deals and sales. Foreigners certainly didn't hurt with their buying here but make no mistake. There are lots of locals with lots of money. Tremendous amounts of net worth have been built up with families here over the past Century. Also, again, Argentina is NOT the country to try to go into the business of buy, renovate and flip. I've said countless times real estate is a long term investment. Any one trying to buy real estate to buy and flip here quickly is being foolish. I've outlined before all the costs of buying here including stamp taxes, realtor's fees buying, legal fees buying, transfer taxes, legal fees selling, accountant's fee getting AFIP permit to sell as a foreigner, money transfer fee getting money into Argentina, etc. I think you should go into real estate with a long term vision. Georgio writes: "If you ever get a chance visit some of these luxury argentina properties for sale/rent websites" The properties are rediculously overpriced. And even on Argentine websites they are overpriced. Argentines don't even pay wealth tax every year because most live in the same apartment until they die". Mike's response: I think you really need to compare apples and oranges. You can have the same apartment in the same building on the same block and you have to see what each unit has. Now I've done over 100 renovations in Buenos Aires. Some of those renovations I've spent up to $200,000 US on so you really need to see what it would cost to duplicate that renovation. Apples to apples. I think some things on the market is overpriced and some are underpriced. The fact remains that many sellers aren't motivated to sell and won't sell unless they reach a # they set. I've been in that position before and I think each seller should get the highest price they can. None of my clients hold a mortgage on their property and it's paid free and clear so there is not any big rush to sell. Same with all my local friends here that I know. As far as Georgio's comments about most locals evading taxes I'll say I agree with him on that point. I don't think it's fair that the government of Argentina doesn't enforce the property taxes for locals yet they force foreigners to pay this. If Argentina only enforced collecting property taxes for all it's citizens they would be in much better shape. NO NEW taxes or tax laws are needed. They only need to enforce existing laws. Georgio wrote: "You have to wonder about a country that charges foreigners 2.5% on your incoming wire transfers forcing your currency into peso and then forcing you to convert back to dollars at another 2.5% in order to buy property. As if the 2001 bank stunt the Argentine government pulled on it's people didn't sink in". Mike's response: "Georgio I 100% agree with you on this one. Argentina is being totally ignorant on this point and it keeps billions of dollars of foreign investments out of Argentina. It's totally senseless. I've gone both routes of legal money exchange firms and also banks and I never use banks anymore. There are legal money exchange firms here where you can get a flat fee to do all the conversions and it's less than what you write Georgio. But in principle I agree with you this is ignorant. Georgio writes: "Next you have to declare all your rental income when you work with these companies at Argentina's social income tax rates. Plus 15% commission and other so called nominal fees at the end of the month for website advertising. All these taxes were created to pretty much screw over the foreigner." Mike's response: I agree with you the tax rates are VERY high here Georgio. The thing is that most locals that rent out their apartments are NOT declaring their income and evading taxes. Foreigners don't have this luxury as they can't sell their property unless they pay their taxes. Many foreigners don't know this. AFIP (Argentina's IRS) when a local sells their property doesn't scrutinize anything. When a foreigner sells it's an extensive study of the taxes, etc. I think I'm probably the only company in Buenos Aires that forces property owners to pay full taxes. I've never heard of another company in town that does that but I think it's the right thing to do and will avoid problems. But Georgio is right in that the taxes are VERY high at 21%. As far as taxes created to "screw over the foreigner". Well, no one likes paying taxes but these taxes were created for all people making money in Argentina. It's just that most foreigners are paying it and most locals evade them. I believe Argentina should force locals to pay it just like they make foreigners pay it. Georgio writes: "If you want a safer investment..buy in Uruguay or Chile where the banking system is very stable and you can purchase property with just a passport. Although your limited to Punta del Este for Uruguay". Mike's response: I agree with Georgio that Uruguay has a very solid banking system. None of this 2.5% to get money into the country BS. I've been very impressed with the banking system there. I also own real estate in Uruguay (Punta del Este) and I agree the system to buy (and sell) there is much simpler than Argentina. Georgio writes: "Remember when you rent in BA, utilities are included and you don't have to pay maintenance fees, ABL tax, wealth tax either". Mike's response: This isn't necessarily true about the expenses. It just depends on if you are signing a short-term or long-term contract. True on short term contracts utilities, condo fees, ABL fees, etc. are typically included but on most long term contracts the person renting pays all utility fees. I've been renting the same apartment for 4 years and I pay my own condo fees, utility fees, ABL bills. I know many locals that rent long term and they pay all utility and condo bills as well. Georgio writes: "Smart Americans exploit cheap access to credit to turn fantasy dollars into real dollars when they purchase hard assets in cash. Too bad 70% of Americans use credit to buy their next Ipod and work 60 hour weeks trying to pay the interest on their mortgages, financed/leased cars and plasma TV's. These same Americans have a net worth of zero or less than zero when you subtract what they owe against the fantasy equity they have in their homes." Mike's response: Georgio I couldn't agree with you more. I've been saying for the past several years what is playing out in the USA/Europe was going to happen. Most people are shocked or surprised by it. Not me. I knew it was all going to happen. For me it wasn't a matter "IF". It was only "WHEN". I wholeheartedly agree with you that many Americans have a net worth of Zero or negative Zero. I agree with Georgio when he says this isn't really a "flip market". Another poster wrote that there are many opportunities to buy property, fix them up and resell them at a large profit throughout the country. While I think there might be opportunities to do this, I'd say there are much better places around the world to "flip" properties. I don't think Argentina is the best place to do that. I NEVER buy a property, renovate attempting to flip it. The costs involved are very high with 3% (or more ) realtor's fees, legal fees, 2.5% stamp tax, money transfer fee bringing in the funds, AFIP permit fee an accountant will charge you to get the AFIP permit, 1.5% transfer tax when you sell, etc. AMARAGGI is spot on target when he comments that the Argentineans buying in Recoleta are not in the $400 US a month revenue bunch. In fact, the last few properties I've sold in Recoleta were not to Americans, British or Europeans. The last 4 or 5 deals were all sold to local Porteņos and none of them are renting out short-term. A few bought just because they got their money out of the USA/Europe and brought it back to Argentina. 2 bought the flats for their children to live in. People forget that many of the locals in Recoleta, Palermo, Barrio Norte, Puerto Madero and many of the Northern Suburbs have quite high net worths. These are the people buying in these areas. Remember what I've been saying the past several years. There is simply NOTHING really solid to invest IN Argentina besides real estate. I maintain that point and I think any local would agree. As far as the question of if Argentina will ever change and dig themselves permanently out of this mess. That is a very tough question to answer. I'm certainly not as optimistic as AMARAGGI. I'd like to think someday they would get their act together but after living here full time for the past 5 years, getting my DNI and having permanent residency here I'd say it would take a VERY long time. The inefficiencies of the government and the banking system and society in general here is at an extreme level. Argentina does have tremendous potential with Agriculture and green energy, etc. but they need a good solid government in place to achieve that potential. Georgio's comment about his family's shoe factory here is a good one. I think Roberto and many other locals can tell you similar stories. Argentina is a brutally tough place to do business. Argentina's history of shooting itself in the foot every 10 years or so is well known and well established. Some of Georgio's comments about the percentage of taxes sheltered are out of date as the laws have changed from year to year as Simon has mentioned. It's best you talk to your accountant here to get the most accurate and up-to-date advice. Also, just because you have a DNI doesn't mean your taxes will go down as there are certain taxing categories of living here vs. not living here certain months of the year. It can be a bit complex sometimes. Georgio writes: "The best thing is buying an apartment for $70,000 with black funds, fixing it up for $20,000 and then renting it out tax free until you get your money back and then some and just never sell. You will save and make more money that way then if you declare everything that these agencies want you to declare". Mike's response: Georgio on one hand you complain about Argentina and how corrupt it is and then on the next you are advising people to do a totally illegal transaction, bring in money illegally, evade taxes for the entire time they own their property and basically break all the laws". Therein lays the problem of Argentina that on one hand you are saying it's corrupt and on the other you are advising people to break the law, evade taxes and forget the rules. For me part of the solution of Argentina is forgetting that type of mentality completely. If Argentina is going to make a fundamental change then you need a shift away from that type of thinking. NO ONE likes taxes. No one but unfortunately in most civilized societies they are a necessity. I agree with you that the taxes are excessive here in Argentina. Now, I'm a permanent resident and I pay lots and lots of taxes and don't like it but not too much I can do about it. I could complain but who would listen? Ha, ha. Georgio writes: "Also, ask owners of these American agencies if they are renting or have purchased their own home in BA. The answer is they rent and they want you to buy". Mike's response: Georgio I agree with part of this post. There are many foreigners that came to Argentina and working illegally. Many of them do not have DNI #'s nor residency status nor working visas. Many of them are on tourist visas. Many of them are illegally working in Argentina and many of them have never purchased properties here. I do find that wrong that they are working here illegally. However just because someone rents doesn't mean they don't own a home here. I can't speak for all foreigners from other agencies but I can speak for myself. I'm a good example. I own several properties in Buenos Aires yet I've rented for the past 5 years vs. living in one of the properties I own. Why? It's simple. I can make more money renting out the properties I bought vs. living in the property. For example, I can rent out my units and with that rental income I can live in an even nicer property in a nicer area that is bigger. So it all comes down to rate of return for me. I do agree with you that lots and lots of foreigners that work here in real estate or tourism or this business don't own here or never purchased here but don't assume just because someone is renting doesn't mean they don't own here. Mark posts: "I've always thought that if the Ford salesman doesn't own a Ford than don't buy a Ford from him". My response: BINGO! I totally agree with you Mark. When I lived in the USA many years ago and I was deciding between a BMW and a Mercedes and test drove several cars at both dealerships I asked the salesman at both which units they owned expecting them to be one of their own cars. Well when I was at the Mercedes dealership and the salesman told me he had a 525i BMW naturally you can guess I didn't buy the Mercedes. I agree with this philosophy. Georgio, you mistakenly wrote that my firm is an American corporation. That is not true. We are an Argentina corporation subject to Argentina laws, taxes, etc. So once again you have made another mistaken assumption. It's ok for you to speculate on something as long as you're not posting things as facts as that can confuse people. I'm glad that you think "I'm no dummy". Yes, I rent an apartment in Buenos Aires but you are wrong that I "sold the majority of the properties I bought after the 2001 crash". You couldn't be more wrong in both your post and assumption. As I posted yesterday, I own more real estate now than at any time before. Yes, I have sold off some properties. Most of them were unsolicited purchases or I only listed it for sale after I got an unsolicited offer but I've always taken the profits and re-invested it in Argentina typically on smaller units. I'm well aware of the 10 year crashes of Argentina but when you say I'm "cashing out" you couldn't be more wrong. I've recently had the chance to sell a few units at close to my asking price and I decided against it. Am I saying that I think real estate will keep going up at the rates/values it has for the last few years? No. In fact, if you read my past posts in detail you will read where I pretty much forecasted the recession and financial crises going on around the world. I will say again that in times of severe worldwide recessions, real estate values pretty much everywhere around the world will fall. I don't think Argentina is any exception to that. What I AM saying is that when I invest in real estate it's not a quick flip. I invest for the long term. Georgio, you make some good comments but also some of your comments are just false including several you posted about me. Posting things like "he liquidated most of his real estate there" is a patently false and totally misleading post and it couldn't be more wrong. Those that know me know that I'm a "straight shooter". I can honestly say I own more properties now than at any time in the past 6 years. I'm very happy with my investments in the past 6 years. I am very happy that I decided to invest a large chunk of my net worth in tangible and REAL assets vs. other investments like paper/stocks/bonds. In fact, see my posts from last year where I suggested people to lighten up on their stock portfolios as the market was going to start to tank. In this kind of worldwide environment, I continue to believe that having hard assets that are producing cash flow and having no debt and not over-leveraging yourself remains the intelligent play. I will continue to give the advice that buying real estate in Argentina is NOT for the masses. In fact, I'll say again for the 100th time it is not for the majority of investors out there. You really have to look at all your motivations for buying here and do your due diligence well and factor in all possibilities. Mark, for the record I haven't updated my website for a while other than when a tax law changes and I have my staff make an update. So admittedly some of the information needs to be adjusted which I'll do when I have more time but which I do let people know when they email me. As you CORRECTLY pointed out, taking profits and selling and reinvesting those proceeds doesn't qualify as "cashing out". As to the reasons why I rent vs. live in something I've purchased is common sense. If I can buy a few properties with $500,000 and make much more money and take that rental proceeds and rent a much larger property and still have plenty of money left over there isn't anything wrong with that. That is the prudent thing to do. East West 3000 is absolutely spot on target when he/she says that this Global financial meltdown will affect everyone. This is absolutely true. Honestly, I don't know one single person that isn't affected in some way by this. I do also agree that tourism will take a big hit in 2009 and possibly 2010 as well and I've already seen big slowdowns in tourism resulting from the massive worldwide recession. In times of severe economic slowdowns and heavy unemployment, international travel will definitely slow down. Vacations as well as corporate travel. Definitely tourism will suffer in Argentina over the short-term. NO doubt about that. I do agree with Georgio's point that Argentina could get rid of some of the things they do and the taxes they have and banking fees and it would create many more foreign capital investments which honestly is what Argentina desperately needs. I agree with him also about them needing to establish a functional judicial system. That is desperately needed as the current system is broken. There are alot of positives and a lot of negatives of each countries including Argentina. I think everyone could write a book about the frustrating things and a book about all the positive things. I still haven't met many people that didn't totally love Buenos Aires. Even locals that moved out of Buenos Aires or Argentina to have a better life in the USA or Europe still really love the city. Georgio, as I pointed out to Mark the information on my website hasn't been updated in a while but you are right that it's almost impossible now for most people buying to get those types of rates of returns as the costs on real estate have gone up, as well as renovations as well as furniture. The inflation has been very high. Many owners that live here and can take a more hands on approach to management can make double digit returns however it is more difficult now. I disagree with your point about how "Puerto Madero is the only beautiful spot in Buenos Aires because it is new and clean. Recoleta has people with money and it is safe too but a lot of the buildings look dilapidated and the rest of BA is a slum outside of the tourist hotspots" I couldn't disagree with you more and in fact I really don't like the Puerto Madero area much at all. I think there are lots of beautiful parts of the city outside of Puerto Madero. I also disagree when you said Britain "is slummy". I think every single country has good parts and bad parts but you make many sweeping statements that I don't agree with, which is ok. It's good people have different opinions on things. I do think Buenos Aires has bad parts of the city but many are also beautiful. I liked AMARAGGI's post about people not having "telescopes". That's true. My friends swear that I have ESP but I assure them I don't. The problem is that many investors want to "hit a home run" every year and that just isn't realistic. Many people also didn't know what they were invested in. I personally know a few people that lost money with Madoff and they are hurting from it. And when Amaraggi says "some poorly trained investors". Well many of Madoff's clients were some of the best trained investors out there. The point is that many "paper" investments you just don't know what it's truly worth anymore. Many have so much toxic waste on their books it's impossible to see the true worth of the company. I still believe that it's good to have some hard assets in your investment portfolio that you understand. Mark - I agree with your point that the USA has avoided many problems for a long time but the wages of fiscal irresponsibility and credit will catch up sooner or later. I've always said the USA will have huge huge problems and we are starting to see that play out today. Many banks in the USA are basically insolvent and without the massive bailouts would have gone under. I think there are a lot of interesting points on this thread while I was gone. I think that it's ok for people to have different opinions and often times spurs more research and debate which I think is healthy. The only thing I'm against is people posting patently false information. | ||
| Apartmentsba.com Senior Member Username: Saint Post Number: 676 Registered: 5-2005 |
Mendoza, Thanks. I just saw your post. Yes, definitley when I said "overnight" I was using that as an expression of speech but you are right. It has been building up. I know rates were frozen but nonetheless it would have been better for the government to have raised them a bit each year vs. the whamo up to 400% increases. Sounds like electricity is VERY cheap in Mendoza. Here in Recoleta my flat is 150 sq. meters and we don't usually use too much electricity. My bill is usually around 100 pesos to no more than 160 pesos every bill which runs in 2 month cycles. Well we were gone most of the past month so that would only account for 1 month of usage and no one was using our flat while we were gone yet the bill we got the other day went up to 500 pesos. I heard on the radio yesterday people complaining and one lady said she got a 2,000 peso bill. Yeah, we called the utility company but like many things here in Argentina... what can you do.... life here.. Still, I predict it's going to cause massive problems once people finally get their bills. The utility companies are saying it won't affect 90% of the people and probably most people think they won't be affected but I can tell you that I don't buy the government nor the utility company's % of people that will be affected. Once people start getting their bills you will see the real protesting. | ||
| Living in Patagonia Member Username: Soulskier Post Number: 90 Registered: 9-2008 |
On behalf of the other board members, thanks Mike for the long and detailed post. Very interesting points indeed! | ||
| Apartmentsba.com Senior Member Username: Saint Post Number: 677 Registered: 5-2005 |
Living in Patagonia, You are certainly welcome. I think intelligent and open discussion has always been really beneficial. I think people can disagree with one another as long as they are respectful with one another and give their points backing up why they think the way they do. My feelings on things are pretty clear as I've been transparent and posted quite a bit how I feel and think over the years on this board as well as other boards. Some people mistakenly think (without taking the time to read all my past posts) just because I own a lot of real estate in Argentina I think it's a slam dunk for everyone when that is simply not true. I've posted in great detail over the past few years that this investment is not for everyone. The simple fact remains that many many investors aren't in a position to pay 100% cash on a property here in Argentina or in their home countries as well. Also, even if they can afford it financially or have a lot of cash. A certain type of person shouldn't buy or invest in Argentina as a vacation rental if they can't deal with the ups and downs of the economy here, the problems that can occur (water pipes breaking, electricity outages from time to time, new AC units breaking down or not working, waterleaks from building neighbors that cause problems with walls/floors/ceilings/etc. problems with internet/phone service from time to time), problems with buildings or administrations, along with a whole host of other problems. Rental properties really anywhere in the world are a lot of work and upkeep but I'll say in Argentina it can be more problematic sometimes as I think Argentina has a higher percentage of problems vs. first world countries. You don't really have to worry about things like the electricity going out on your block in the summer in the USA yet in Buenos Aires it can happen several times when it's hot. I think you have to keep all these factors in mind when thinking about investing anywhere and know what type of investor you are. Also, I still don't buy real estate anywhere in the world in less I really enjoy that city and go there over and over. I don't think that is a hard and fast rule but personally I'd never buy real estate just to buy real estate as it's cheap. I like to own a place where I really enjoy and will use the property over and over. No matter what anyone says, I will still make the case for owning real hard assets with no debt on them that are producing cash flow. No one is saying real estate in Argentina is the best investment in the world but on the other side of the coin over the past few years I can think of far worse investments. The stock market has taken a huge huge hit and some stocks will eventually come back. The problem is that some stocks went to $0 or will go to $0. Lots of small cap stocks went under or will go under in the next 24 months during the severe worldwide recession. So it's not even a matter of "buy and hold" with these stocks. The recession will force many publicly traded companies to go under. Cheers all. PS Also, something else that I found interesting and recently started is home exchanges. I've never done that before my last trip. My wife and I usually always stay in nice upscale hotels but recently someone mentioned the possibility of using the apartment rentals I own and exchanging them for time in other properties in other cities in the world. This has turned out to be really amazing. There are websites like www.homeexchange.com where you can exchange your property for another property all over the world. Within 24 hours of posting my property I had about 10 requests for exchanges and made an exchange literally within 24 hours of posting it. I went to Los Angeles and exchanged for a really high end property. Cancelled the hotel for those 6 nights which was u$s 2,700 saved. Also, we are going to La Jolla and exchanged for a property for 2 weeks in March. We are heading to Europe this Fall for over 1 month (London, Paris, Amsterdam, Monte Carlo) and have exchanged luxury properties in each city. Hotels for that time period would be $20,000 + for that time frame yet we just did them for an exchange of our flat in Buenos Aires. I look at this money saved as ROI as well. I was really impressed with the experience in Los Angeles and so far communications with the March exchange has been wonderful so I'd recommend this as well for anyone that owns a rental property. I've also exchanged for the future (not sure when I'll have time to go) 2 more weeks in La Jolla, 1 week in Ireland, 1 week in Miami and 2 weeks in New York (Manhattan). Anyone that travels frequently should look into this. Cheers all. | ||
| Living in Patagonia Member Username: Soulskier Post Number: 91 Registered: 9-2008 |
I would strongly echo Mike's comments about Argentina not being for everyone. The A-Factor, as we call it, can drive a person mad. Having patience and a good sense of humor in this country is a requirement. Just yesterday we spent the better part of 5 hours getting fingerprints for the second time, having them certified, etc for our Zona de Seguridad. | ||
| Arial Advanced Member Username: Arial Post Number: 312 Registered: 10-2006 |
I think this does not belong here but since the conversation started here I will post a follow up, always in the hope that someone else will benefit. You experienced ones will be saying "What a dummy" but I did not know the US has a Social Security Admin office in Buenos Aires (DUH!) That was all I needed. I went there and got a letter affirming my income, took that with two recent bank statements from my US bank showing the direct deposits of the same amount, to Imigraciones, returned a few days later for my DNI and I was done. As stated above, I also got a letter from SS stating that they cannot legally transfer money directly to a non-US bank and Imigraciones accepted that and dropped the requirement. I am "legal" again for another year with a lot less fooling around than if I had done it elsewhere. I didnt even have to have the documents translated since they were already in castellano! Arial | ||
| Apartmentsba.com Senior Member Username: Saint Post Number: 678 Registered: 5-2005 |
Arial, I agree this probably isn't the best area and Roberto can remove it if he wants but yes there is a Social Security Administration office at the US Embassy in Buenos Aires. I've been in the Embassy many many times for numerous things (renewing my passport, constantly adding more pages to my passport, document certification/notarization) so I've always seen the SSA window (the furthest window on the right hand side). They are VERY efficient. When my daughter was born I applied for her Social Security card here. I remember reading on the application it could take up to 4 months to get the card. But I found it ironic that they said that a US citizen applying for a card outside of the USA gets it much quicker as they don't go through the usual cue of people waiting in the USA. Sure enough 10 days later we got her card in the mail sent to our home in Buenos Aires. I was amazed with their speed and efficiency. I can't say enough good things about the US Embassy in Buenos Aires. When my daughter was born here in Buenos Aires and I had to apply for her USA passport, the Embassy had the passport sent to us within 10 days of turning in the paperwork. Amazing turn around. On the other side of the coin, applying for the Argentina passport for the baby involved a 5 hour wait at Immigrations. Waiting, waiting for paperwork to fill out, waiting for the photo for the passport, waiting for the fingerprint of the baby. Then it took over 2 months to get the passport. I'm not sure if they do it for everyone but the US Ambassador sent a personal letter to our home congratulating us on the birth of our baby. I've always had good experiences with the Embassy in Buenos Aires. They are a helpful bunch of folks. Living in Patagonia - LOL. Funny! I never head the "A-Factor" before but that certainly is a great word for it. I don't think people that don't live here understand just how difficult things are here sometimes. Many seemingly simple things here take forever and there is a line just about everywhere. Living - I went through the "fingerprint" process every year for the past 3 years each time I had to renew my DNI. It's a good feeling getting permanent residency and never having to go through that process again. Terribly frustrating. There are certainly positives and negatives of Argentina and people have to be prepared for both. I've lived here 5 years and I'll still say that the quality of life here can be very high if you are already moving here with savings or retiring here with on-going incomes/pensions in dollars/pesos/Sterling. I know many that have retired here. Although the costs have skyrocketed upwards over the years, it's still more affordable than living in the USA/Europe but some things can be very frustrating. (Waiting in line for everything, especially supermarket, trying to retrieve a package at the post office, the horrible traffic and the worst drivers in the world, pedestrians not getting the right of way, a horrible banking system only to name a few). But all in all it's still a great country. | ||
| Living in Patagonia Member Username: Soulskier Post Number: 92 Registered: 9-2008 |
I have some excellent examples of A-factor I have kept a note of that will make others laugh. Do you think it would be appropriate to start a thread? I await the board and moderator's response. | ||
| Mark Member Username: Lostintheandes Post Number: 61 Registered: 10-2008 |
Mike, vacation seems to have done you well. Your replies were great and minus the defensiveness you sometimes show. Great answers although i won't be buying an apt soon. You said the easy money had been made in financials....true but the credit card debacle is hitting the fan and I am short COF(as well as GS). I outlined my thinking on COF and any who followed are now in tall cotton as it is down 40%. I say anyone who espouses an opinion such as you on BA RE but has no skin in the game should just shut up. If I could short BA RE I would. You cetainly have skin in the game. In a year when Patagonia and I open a bottle of the good stuff perhaps you will join us. cheers,m | ||
| Georgio Armani New member Username: Georgio_93 Post Number: 15 Registered: 1-2009 |
Yes, I have gotton some percentages wrong regarding the BA taxes but that is only because they change so much. Argentina is so unstable and the fact that Mike stated that his electricity bill went up 300% is yet further proof. I lost lots of money in stocks in the past... stocks are for suckers unless you have insider information or are a stock broker who makes money by volume and with other peoples $$$. I only have gold, real estate, treasuries, and munies (munies can be dangerous if states are in a deficit/not insured). I am advocating the black way of doing business in Argentina only if you have a DNI and therefore are not considered a foreigner. Doing things in the black as a foreigner is setting yourself up for a world of hurt. And yes I will advocate cheating so long as the system is setup to reward them. Besides, in Argentina you learn that in one regime it is cheating but when the other takes over all the rules change and therefore it doesn't matter if you were abiding by them in the past. I believe Mike was born in America so it is no surprise he is brought up with the American mentality of (don't lie, cheat, and pay all of your taxes). This is true, you MUST follow these values in America because the American government watches and knows when people cheat and you are harshly punished for doing so. America only cares about one thing.... money. They don't care if you are black, white, asian, illegal imigrant or whatever. They welcome everyone and anyone so long as you bring your money, make money, and pay taxes. Europe and S. America are classed based societies despite all of their socialist retoric advocating peace, free love, and equality. Europe is not equal. In Italy there is a high level of nepotism. You have to be important or come from an important family to land a good job. Europeans, Canadians, French and even Argentinians are highly anti-semetic. My French friend and family are atheist but they put Roman Catholic down on his ID card because they descriminate when it comes to jobs. Think that is another one of my generalisations? Just look up the embassy bombing in which many Jews were killed in Argentina and the underground NAZI migration after WWII. Argentina is like the Idaho of S.America lol. There are very few minorities in Argentina and Brazilians feel it everytime they visit. Also, Argentina and Uruguay wiped out all of the indiginous people on purpose. As a European/S. American you HAVE to cheat or else you don't survive. Unfortunately, the wealthy in this world do not follow the same rules as everyone else. If you are filthy rich I guarantee they are doing something illegal. I admire Mikes passion for changing the mentality of Argentines and Europeans but you are preaching to societies of ancient ingrained habits. The only way Argentina will change the mentality of its people is if the government sets the example of being honest by changing their tax code and judicial system to reward the hard worker, investor, and wealthy instead of trying to bleed them dry with these rediculous taxes while keeping revenue for themselves and leaving the crumbs for the poor in the form of social programs to shut them up so they continue to vote for their constituency. America is a new country and it has really only been recognized as a super power since the end of WWII. It has only been 60 years since then and the decline of America is already becoming apparent. If Obama turns this country socialist (which he can do with a democratically controlled congress) and the creation of a North American Union takes place, I guarentee you will see people starting to live like Europeans and S.Americans. If I had to choose and recommend a country to retire in right now for those of you who are close I would highly advise Malta. They speak English, have affordable real estate (so long as you buy an apartment ~150k US, no property tax, no garbage tax, no HOA/maitenance fees and (tv, internet, mobile phone, regular phone is about 60 euro/month). Stable parliament government, temperate weather with sunshine all year round with no snow, and one of the top healthcare systems in the world ranked 5th. Can't do better than that. PS- I am glad there are people on this board that disagree with me. I guess you can say I am extremely malcontent. I really hope the majority of the world thinks like Mike instead of me. But most Europeans and S.Americans agree with me and that is why we have poor economies... we don't spend because we don't trust each other. Also, the US breeds a lot of ignorent people with their poor education system and embrace of illegal immigration which is the only reason capitalism survives. | ||
| Benco Member Username: Benco Post Number: 59 Registered: 4-2007 |
Georgio, your posts have certainly revived the discussion here which is great. And some of your thoughts are interesting indeed, although I had to switch to internet-reading mode in order to find them - scanning through lots of questionable statements trying not to miss the better points. One point I would like to comment on is the issue of paying taxes, since you insist on "advocating the black way of doing business in Argentina". Similar to ApBA I think this just isnīt right. Whether you may get caught or not is one thing, whether it is right or not another. I am wondering if your next advice would be to rob a bank (honestly I sometimes think they deserve it...) It is correct though that one should not be naive about this issue. If you are facing serious competition from companies who evade taxes then you either do the same or you are out of business soon. More than 40 percent of the workforce is employed in the black, which illustrates the magnitude of the problem. And of course, corruption and bad government do not help convincing people to obey the laws. Look at what happened to the pension system, where the savings of future pensioners are now dished out to boost consumption (and the AFJP were not any better with their administration fees of 30 percent). When you employ someone in the white, 20 percent of your cost goes into the pension system. If people feel they are not going to see this money again, then nobody should be surprised about their preference for partially working in the black. If the owner of a small retail store evades some taxes because he needs to stay in business and feed his family, then I wonīt blame him - he may not have much of a choice. But of course, a foreigner who deliberately decides to come to Argentina has a choice, and certainly can not justify evading taxes as a necessity. And many Argentineans also have a choice, and too often decide against public interest. With respect to any investment project, there is no doubt that one needs to carefully analyze it according to the special situation here. My advice would be to look for something that is out of reach for the informal sector and does not depend on the state. For example real estate is okay, construction probably not. Providing services to foreigners is okay, while hoping to provide services to public institutions is unlikely to work. Competing on price is tough, while competing on reliability and quality of service may be possible. Despite all the problems, I am convinced that in Argentina there are still tremendous opportunities that can be explored while living with self-respect and without compromising your moral standards. After all, I would not have come here otherwise. | ||
| Apartmentsba.com Senior Member Username: Saint Post Number: 680 Registered: 5-2005 |
Georgio, Thanks for your follow up post. Really, like I said before. I enjoy your posts and it's VERY clear that you have a good understanding of Argentina and how it works. I don't disagree with everything you say and in fact I will say that you make some good points. Yes, Argentina has its fair share of problems. There is no doubt about that. And to be completely honest, the longer I live here the less optimistic I am that there could be a sweeping change in the near future. I guess I like to think positive and believe that change can be achieved over time if you have enough good and positive forces in play. Although I'm optimistic I've always been a realist as well. In fact, I think I'm more realistic than I am optimistic. Argentina has many challenges. And coming back from a long vacation to see that utility rates went up literally 300% is a reminder of that. Granted, they haven't raised rates for the past several years and by most worldwide comparisons electricity is still affordable here. A 300% increase from one day to the next will cause chaos. I think those that want to live here need to understand the unstable aspect of Argentina. Certainly when I decided to move to Argentina I understood that nature of the country and accepted it. Georgio, I wouldn't go as far as you as saying "investing in stocks is for suckers unless you have insider information" but I will agree that people understand now that the market doesn't just move up in a straight line and "paper" isn't worth what they thought it was. I agree with you that owning hard assets like real estate (not being over-leveraged or not being leveraged at all if possible), gold and some treasuries is wise. You made a good point about municipal bonds. I pointed out last year all the problems that States would have and many are essentially bankrupt and we are seeing that play out today. I understand your point about recommending going "black" if you have a DNI. You are right that foreigners MUST obey by the laws are they will really suffer the consequences later as the government has two sets of rules. They have one for locals and another for foreigners which is a travesty of justice, in my humble opinion. You are right that the system rewards people that cheat or are "black". However, I'll say that I've had my DNI for several years now and I haven't changed my thought process. Do I get frustrated?? YES! On a daily basis. I don't honestly think one day goes by that I don't get frustrated in some way by this system. I didn't have this frustration doing business in the USA. Georgio is correct that it's almost impossible to make money operating in "white". I said it before and I'll say it again. Argentina is NOT the country you move to try to get rich. It's an extremely difficult country to make money in when you work in "white". I should know. All of my employees are in "white" and we operate in "white" which puts us in a huge disadvantage with other companies in the same industry. People don't realize the tremendous taxes that are in place both on corporate taxes and especially on employees. For every $1 you pay in salaries there is something like 47% in various taxes, mandatory insurance/benefit programs, government fees, etc. Georgio is spot on target when he says that most companies operate in the black because it's so difficult to make money here due to the system the government set up. Many companies pay their employees under the table to reduce their tax exposure. I don't operate that way and it causes huge amounts of taxes. I know some companies locally that are in the same line of business and they have no office, working out of their apartment, they don't have any corporate structure set up in Argentina, their employees are paid under the table, they pay no taxes, they own no property here, they only work with locals (who also don't pay their taxes). Several foreigners working or living here have no DNI and are here on tourist visas that are renewed over and over. This is illegal. Yes, Georgio I was born in the USA and lived there all my life until I moved to Argentina. I guess that is my problem. Ha, ha. The USA government has trained their citizens well. You are essentially right that the system here in Argentina is broken. However, I think that much of the problem is that most locals think the exact same way you think. I do think that there needs to be a fundamental change in the laws here and the way they structure things. I'm hopeful it will happen in my lifetime. I'm not trying to preach to anyone Georgio as some of your points are accurate about Argentina and how it operates. I guess my point is that there must be individuals that also change their actions and the way they do things or "change" will never come. Georgio, you are right that the USA is fairly a new country. Like you, I believe things are rapidly changing there and the decline in power and importance of the USA already started. I don't think anyone can argue with that. The USA will always be an important player in the world but there is no denying their influence and power is declining. I do agree with Georgio that depending how bad things get in the USA in the future you could see big changes and Americans starting to live like Europeans or people in South America. I am American and certainly proud of that fact. I still think that the USA is probably the best country in the world to live in. And from the fact that Georgio lives there it sounds like he does as well. The USA has its fair share of problems but every country does. When I found out I was going to have a baby in July 2008 I could have had her in any country in the world. I thought about having her in the USA where I am from and where I lived almost my entire life, before moving to Argentina. But I chose to have her born in Argentina and I'm happy with that decision. I knew that she would automatically get citizenship in the USA because I'm American and lived there my entire life. If I couldn't have gotten that for her I would have flown to the USA and had her born there. But I'm happy that she also has citizenship in another country as well. I'm happy to give her the opportunity to pass a USA passport as well as Social Security # as well as a passport and DNI from Argentina. People get this wrong idea that gaining permanent residency in Argentina is some easy feat. That is wrong. You would think that a poor country like Argentina would welcome foreigners from the USA/UK/Europe with open arms but that isn't true. Going through the DNI process and getting permanent residency here was a difficult task that I wouldn't want to repeat. Georgio - I hope you will continue to share your opinions. I think it's ok to disagree with people as long as people are doing it respectfully. I think the world would be a very boring place if everyone agreed with everyone else. Good luck. Mark - Yes, it was a really great vacation and coming back and playing catch up will take some time. Toughest part of a vacation. No problem with you not buying a property here. Certainly no one is trying to talk you into buying anything. You somehow make it sound like at times someone is trying to talk you into buying here which isn't true. The thing I've said more times than not is real estate investment here isn't for a majority of the people out there. There is nothing to be defensive about. I've given my opinions for several years and the truth of the matter is that I was right. I've said that for 2009 there probably isn't a rush to buy real estate anywhere in the world. In times of worldwide recessions real estate prices in most parts of the world will most likely decline. Benco - it sounds like you and I would get along. I've read your past posts as well as the last one and you sound like minded. Best to all and a great 2009. | ||
| Arial Advanced Member Username: Arial Post Number: 314 Registered: 10-2006 |
These are really interesting posts. I will read them more than once. It seems like a window into the Argentina culture. I think what Georgio writes is important. I came here from the US thinking things were done the same everywhere (DUH!) and almost really messed up one lawyer because I had no clue that something might be a little shady. I think Argentina people assume that others of us know how things are done. Maybe THEY think things are the same elsewhere as here. After all, I recall Roberto wrote that he got stopped three times in the US for not stopping at stop signs before he realized that in the US STOP really means stop. Although APTs BA and perhaps Benco advocates doing things in the "white," it is my experience that not too much in Argentina is in the white. | ||
| Apartmentsba.com Senior Member Username: Saint Post Number: 681 Registered: 5-2005 |
Arial, Yes, there are great comments here and I think people can learn from them. Yeah, I think foreigners should do everything in white. And even locals as well to potentially avoid problems. I know I'm in the minority but I'm the type that even has my maid in my house in white and pay taxes for her as well. I can't imagine that is too common. Funny about Roberto and the stop sign. I didn't see that before. Funny. Although I advocate the "white" you are right that most of the country doesn't operate in the white. And I will admit once when a police officer came up to my car when I was parked in a loading zone area and he said I shouldn't be there. I explained to him that I was just waiting to pick someone up and they were coming down soon. The funny thing is that he said well I will write you a ticket but maybe I could be convinced to change my mind. Then he asked me if I had change for a 50 peso bill. LOL. He didn't come out and ask for a bribe but it was pretty obvious what he was getting at. I have to be honest and say that I did give him "change" for his 50 peso note only he never gave me any change back and he did change his mind on giving me the ticket. LOL. I guess this would be considered "black" but most locals just consider this normal. | ||
| Living in Patagonia Member Username: Soulskier Post Number: 93 Registered: 9-2008 |
Along with mate, futbol and waiting in line, not paying taxes is a known Argentine past time. So some might argue, when in Rome,..... | ||
| Georgio Armani New member Username: Georgio_93 Post Number: 16 Registered: 1-2009 |
Yes, I live in the US. My family made money here that they would never be able to make in any other country. That is the beauty of the US. If you come from nothing... or in our case if a government of a foreign country strips your once acquired wealth because of communist/socialist uprisings (Ahem... Argentina), you turn to the US as your only savior. If you are fairly educated and work hard in the US you can make a lot of money. But I would like to point out that the US is ONLY good for making money. (There is no culture, the food stinks, fashion is out the window, the arts are pathetic, and there is really no social life for most because we are working all the time) The US rewards the young ambitious hard worker but punishes the old, ignorent and sick. What this means is that if you work hard and make a couple million dollars in your lifetime and you retire in the US you will lose all of your money in retirement with the cost of healthcare, constant rise in cost of necessities such as utilities and food, and the need to maintain a vehicle and property taxes. Property taxes in the US is the real wealth killer. Some people in the US on the east coast need at least a revenue stream of 10k per year JUST TO PAY PROPERTY TAX. Also if you own a home you need to constantly pay for repairs because the homes in the US are made of spit... wood and cardboard. Natural disasters can wipe out your flimsy house so this means you NEED insurance which will cost you another 2k per year on TOP of your property tax. Between utilities, property tax, insurance, repairs you are looking at around 15k per year just to breath the AIR IN YOUR HOUSE! That is unacceptable which is why when you retire you are basically FORCED to leave. The US government WANTS this! As soon as you become UNPRODUCTIVE you are financially forced out of the country. The NAZI's did the same thing accept they were overt about it. In truth I understand the system and it is really the only way capitalism can survive. Also, defaulting property tax can mean losing your home and all the equity in it! Socialist countries cannot take away your home for defaulted taxes. They can only receive defaulted taxes when your home is sold or transfers to your heirs. Also, in Europe you don't need wills and trusts (especially Italy). Everything goes to your family and the government doesn't tax or have probate. My advice about Argentina was nothing more than "When in Rome, do as the Romans". I understand why Mike has to be legit in Argentina, after all, he is running a company. But for a little ole individual cutting a few corners is not going to land you a prison sentence in Argentina. Personally I wouldn't invest in Argentina at all. If I had to move to S.America I would probably buy something in Montevideo or Punta del Este and just take a ferry to BA when I wanted to have fun and enjoy the exciting city. Basically... Spain has been extremely unaffordable and most spaniards are moving to Uruguay to retire NOT Argentina. There probly is a logical reason for this. Malta seems the best bet right now for reasons I explained above on my last post. It is also just a boatride away from Italy so traveling and seeing Europe becomes much less expensive. All you need are boats and trains to see Europe from Malta. Retiring in Europe is more pleasurable. In short, I guess what you can take away from my opinionated posts is that if you have no money and you want to make it, the US is your only option. If you already have money, you will live a much more fulfilled life if you live in Europe. | ||
| Living in Patagonia Member Username: Soulskier Post Number: 94 Registered: 9-2008 |
Georgio, try not to hold back and tell us how you really feel. | ||
| Benco Member Username: Benco Post Number: 60 Registered: 4-2007 |
And keep bashing *ignorent* people, please. | ||
| AMARAGGI New member Username: Amar Post Number: 23 Registered: 12-2006 |
Georgio, your description of US is quite apocalyptic. And I am not sure it is right. I guess they are plenty of well educated people working very hard and being poor. Do you really believe that because they are people who succeed from various communities that there is no racism and class stratification? I feel this is a very violent country with also a violent history not to mention the usual killings oF youngsters by their class mates. Corruption is everywhere (look at the Siemens case) but what makes the difference with Argentina is the separation between the different "powers". I mean justice and the parliament structure. Laws are inforced and there are enough medias of different opinions to bring cases to the public (remember watergate). In Argentina there is still this survivance of peronism which is a remain of the social organisation under fascist and national socialist regimes. Their economies at that time was also generating a huge inflation that they accomodated through wars and looting. But since facts are stronger than lord maires, I believe that rather soon the Argentinan economy will normalise. In fact having people paying the right price for electricity is rather good news. Maybe they will consume energy and water and ressources more normally. I believe that if a decent governement comes to power the total profit for Argentina and investors will be bigger than playing the black market and organising a weak state. Look at the most prosperous economies Sweden, Germany, Japan they work around a solidarity system and organised democracy. As far as playing the market I must say that I really enjoy taking lessons from Mike, Mark and Mendoza. I tend to agree with you that this is probably a casino game. I remember having read Edward O Thorpe "beating the market" about hedging but that was about mechanical relations between warrants and stocks in very particular situations, very far from betting. But I am a complete ignorant on these matters. What I can say is that this is my fifth trip to Bs As and I enjoy it more and more.It is a fabulous city and country.I bought a small house here and if it brings back 6% I will be perfectly happy. I think like Mike that on the long run I will also make a profit when will come the time to sell it.In Malta it would be like the waiting room of death. | ||
| Mark Member Username: Lostintheandes Post Number: 64 Registered: 10-2008 |
What a great exchange..I am learning more each day Mike, I will be buying.....I just hope for your sake its not distressed apartments in BA Georgio, Sorry about your stock market experience but I guess if you asked a guy about to jump out the window in 1929 and Warren Buffet what they recommend you would get different answers. Bottom line there are more self made millionares from the stock market than working at a job or from real estate. Patagonia, Never change your principals...only your habits. Everyone else, Black and white...it all seems grey. Covey says you can't break the basic universal principals, you only break yourslf against them. It seems this is the Argentinans curse; because you refuses to follow a higher code of ethics you are doomed to live in a system that has no higher code of ethics. | ||
| Georgio Armani New member Username: Georgio_93 Post Number: 17 Registered: 1-2009 |
Better to bash ignorance than wealth right? Quite frankly, breeding ignorance just makes it easier to "legally" steal money in our capitalist society. I believe the American economy will plateau for 5-10 years before it rises again but I can be wrong. But the formation of a Union and introducing socialized healthcare will force the cutting of our military budget. If you cut our military budget you can't wage wars... and empires are forged upon wars. Therefore, one can deduce that the introduction of socialized healthcare is the destruction of our empire. We simply cannot tax 80% of peoples income to maintain both. Europe depends on the US to save them when terrorism occurs... they spend little to nothing on military, it all goes to social programs. Sometimes I spell words incorrectly when I am speed typing. Sorry for that but English is not my first language. I am sure everyone on this forum has made a spelling error at one time or another. Hardly a way to measure one's intelligence. | ||
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