The Golden Egg and Killing The Goose Thereof
In an article fabulously titled "Pagan hasta US$ 1.000 por semana por alquilar en Capital" (if only they'd used an exclamation point!), Clarín points out one of the unpleasant truths of the recent tourist boom. Namely, that attracted by the possibility of quick money, many Buenos Aires apartment owners are switching their rental units to the tourist trade and raising the tourist prices high enough that they're no longer really the bargain that attracted people in the first place. As you can see in the grid above (assuming the numbers are true), locals pay 30-50% of the foreigner price, hence the attraction for renting to gringos, frogs and limeys. But it's not that easy. As Clarín notes, "Las desventajas son varias: hay mucha oferta, pagas expensas muy caras, la inversión inicial es alta y competís con hoteles cinco estrellas, por eso tenés que incluir servicios premium." Also, because so many people are doing this, many Argentines have been left without affordable places to stay.Armando Pepe, titular de la inmobiliaria homónima, aporta: "antes los que alquilaban departamentos eran los que no accedían a un crédito y los estudiantes del interior. Ahora se sumaron los turistas, y los estudiantes y empresarios extranjeros. Más jugadores en la misma cancha. Hay muchos departamentos que se volcaron a este negocio y descuidaron el mercado interno", explica.Foreign visitors too have taken to complaining. Take Claudia Boyd Barrett, a reporter in town on a journalism scholarship.
Cuenta que fue a ver un departamento mal iluminado, pequeño, sobre una avenida muy ruidosa y le quisieron cobrar U$S 550. "¡Un alquiler exagerado! Lo peor es que me hablaban de los precios como si fueran totalmente normales. En Miami un departamento de dos ambientes con salida a la playa cuesta más barato...Not that short-term, foreigner-aimed apartments are a bad thing--my mother's stayed in several--but let's just say that it seems like a lot of people haven't learned that easy money is never that easy.
Con toda esta historia sus planes cambiaron radicalmente. Pensaba terminar de cursar la maestría y quedarse unos meses trabajando aquí en un medio local, pero eso no sucederá. Una vez que termine de estudiar regresará a Miami.
posted by Ian @ 10:46 AM
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12 Comments:
This topic gets my blood boiling as it hits close to home as a foreigner struggling to survive in this city.
I do not understand why its so difficult to rent a apartment long term . The rules and conditions attached greatly favor the landlords.
If I hear another Porteno say that things are cheap here I will scream . Rents in any decent area are as dear as any similar apartment in Europe or United States.
I have been shown apartments on avenues with 100s of buses screaming past with rents of 1000 dollars a month . To me that is incredible because you are not getting any value for your money.
Tell me Argentinian readers why do you try always to charge me more when you here my accent . Do you do the same to your richer Argentine cousins?
The richer argentines who are wealthier than most europeans these days pay the local rate while struggling foreign students are charged three times more.
The people here have no shame .
Rich Argentines are just a few. Rent is high for everyone and is hard to rent a decent place at a decent price for us too. Think our sallaries are in pesos and are really low.
About why so many requirements to rent, well, that's an easy one: if a tenant doesn't pay, it takes for ever to evict him because laws are old and badly administrated. And many times the tenants destroy the property in revange of getting evicted. At least that's what I came up with.
It is the law of offer and demand... If these prices exist it is because someone is paying them. When nobody could pay them anymore, they will go down.
Get used to it. Yes, it's supply and demand. Tourists will pay dearly as long as B.A. is on the hot list of tourist destinations. Also, tourists want a hassle free rental. Locals renting longer term provide potential problems for landlords. And I think it's going to get a lot worse for locals in the long run. Better start looking for rentals off the beaten path where tourists won't go. Expect high cab fares, more airport fees and hassle, and higher restaurant costs.
Renzo its called greed and mafia control by real estate agents in conjuction with owners.
I beleive rents should be fully controlled as they are completely out of sync with peoples wages here.
I do not see why foreigners who decide to emigrate here have to be exploited like this by cunning landlords.
Rents for an apartment in Buenos Aires should be around 500 dollars a month which is fully realistic to peoples earning potential here.
In Miami a 2 bedroom apt costs $.2000 ( not $550) per month!!! And if anyone feels like rent is so expensive, well, may be is time to go back to your country and be a local!
It is not true that a 2 bedroom apt in Miami costs $550. I live in Miami and the rent for a small 2 bedroom apat is $2000!
Let's compare in international terms... In Ottawa, a 1-bedroom apartment in DT costs around 900 CAD (780 USD) per month, or 2400 pesos. Therefore, those who say that rents in Buenos Aires are as expensive as any other US or European city are not properly informed.
I don't know how or why people can't understand this subject. Put simply, comparing local rents and rents to foreigners is like comparing apples and dogs-not even remotely similar like apples and oranges...
Local rents are *legally* 2 years in length. The laws are also on the side of the tenant so the owner makes sure he's covered by asking for a guarantor. Getting rid of a rent dodger is a nightmare in every country but with argentina's legal system it's worse so the owner wants to know he's going to get paid. This is no different than most countries where you need a co-signer on the lease. The difference is, the contract can be for shorter lengths of time in other countries.
Being a guarantor for someone in Argentina is a *big* deal. When i guaranteed on behalf of another english friend, my argentine friends thought i was crazy-it's not something they'd risk. foreigners can't get guarantors so they have to resort to paying 2 years up front or renting through a short term agency.
Ok, so the foreigner has to rent through an agency. Let's look at the costs:
I rented out my old property as an office. Equally it could have been rented out as an apartment. I rented it unfurnished for the local market rate (actually a little under as it was to friends) of 2250 pesos per month. 95m2, old french building, near plaza congreso, parking space and in perfect condition.
My costs on this? 100 pesos a month to be able to give them official receipts for their rental payments.
Their costs? 350 pesos a month in expensas, 180 pesos a month in internet and cable, 50 a month for gas and electricity (and now rising). Close to 3000 pesos a month in total for the tenants. And add the costs of furnishing the place to that list.
If i had rented it out as a short term let to foreigners i would have had to spend a good
us$10,000 on high quality furnishing and i would have been liable for all the costs mentioned above. And that's not even mentioning the 15-25% commission to the short term letting agency. I could have rented the apartment out for a maximum of us$2000/month or 6000 pesos.
That's 6000 minus about 1000 in expenses. 5000 pesos at 100% occupancy. Let's say i get lucky and over the year i get 75% occupancy. 4500 pesos. Minus 20% commission.
That's 3600 pesos a month if i'm lucky. With the huge amount of short term rentals on the market, 75% would be a dream for many owners.
So i'd have to shell out us$10,000 in order to earn an extra 1300 odd pesos a month. And also have the extra stress of worrying whether i was going to get tenants that month. Sounds like a great business, eh? People think owners are making a fortune out of these rentals but they're not.
They' re possibly getting a little more than normal but they're taking a risk in order to get that bit extra.
So all the foreigners who whine about the cost of renting in BA: either make local friends and get a guarantor and a *2* year contract (because that's the law) or pay *2* years rent up front. And then spend even more money on a TV, sofas, beds, cabinets, tables, desk etc.
Long story short:
-Local rents do not include expenses, utilities, internet, cable, any furnishings but they do include a two year commitment.
-Short term rents to foreigners include expenses, utilities, internet, cable, all furnishings and the chance to leave whenever you want.
-Short term rents to foreigners are not as lucrative as you'd believe.
A dirty one bedroom in Miami costs 1000 a month, a semi decent one 1300 and a two bedroom 1800 - 2000
And we aren't talking about nothing luxurious.
I agree with Sergio!and I still find that rental prices in Argentina are cheap compared to other, major cities in the world, including Santiago, Chile.
Agreed with the above comments about rent prices in Miami, where I lived for 11 years before relocating to BsAs. Also, try finding a decent 1 bedroom in any large city in Europe for under $1,200-$1,300 a month. Damn near impossible. I was in Barcelona for two months recently, and in addition to high rent, it's difficult just finding a place due to a housing shortage. Sure, rent increases for expats in BsAs is frustrating, but the same holds true for alot of portenos who are being forced out of some areas. In addition, no amount of bitching and moaning by expats is going to change things.
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