What to do today with an empty apartment: sell, rent or wait?

Silvana Saldisuri

09/01/2021 6:00 AM

• Clarín.com

• Services

Updated 09/01/2021 6:00 AM

As a consequence of the pandemic, the real estate market suffered during 2020 a

significant

paralysis

that still continues so far this year.

In this context, and added to the new Rent Law, many owners doubt about what they should do with the

apartment

that they have

empty

.

Rent,

sell, or wait 

a little longer?

Having an empty property is not a business, the property 

has to be in constant motion

, according to experts.

Either rented, or for sale, to cover expenses, or to buy another good with better characteristics.

In this context, the director of Real Estate Report,

José Rozados

, explained to

Clarín

that "it is difficult to establish general conclusions that may be applicable in all cases."

But as he highlighted

personal issues

, such as the need or objectives of why keep the property and turn it over to rent or get rid of it, it will be an

important factor

to take into account, beyond the current context.

According to experts, having an empty property is not a business, it has to be in constant motion.

Photo: Andrés D'Elia.

"Perhaps for

someone of middle age

without the imperative need to have the capital of the sale, the option will be to dump it to rent and for

someone who is older / retired it

may be better to sell it and manage the amount of the sale in a more accelerated way that what he would obtain for monthly rental rent ", quoted Rozados by way of example.

However, there will be those who do not have particular needs and are only looking to

make the value of their property perform better

.

What is the current situation of the real estate market

Recently, the College of Notaries of the City of Buenos Aires reported that the

total amount

of real estate

deeds

in the seventh month of 2021 totaled a total of 2,457 records, for a total amount of transactions that amounted to $ 23,401 million .

Does this mean there is an improvement?

Any comparison with the same month of the previous year loses sense, due to the stoppage as a result of the strict confinement that was imposed in July 2020 when only 573 sales were registered. 

The average amount of the acts was $ 9,524,556, equivalent to $ 94,023 according to the average official exchange rate.

"

Sales today are very depressed

, it is going through after 2020, the worst year in terms of deeds," said Rozados of Reporte Inmobiliario.

On the other hand, he explained that the rent is also leaving an

income

historically

low,

between 2 and 3% annual gross

at best.

The total amount of real estate deeds in July totaled 2,457 records.

Photo: Andres D'Elia

I have an empty apartment: should I rent it? 

When evaluating whether it will be convenient to put the property on

temporary rental

, it will be necessary to consider the particular context of this segment.

This alternative, before the pandemic, was highly demanded both by tourists, as well as by students who came from the interior of the country or abroad and was very attractive for the owners due to the high

profitability in dollars

.

As detailed by the commercial director of Zonaprop in Argentina and Uruguay,

Leandro Molina

, "nowadays

this market is restricted by the pandemic

and by the change in profitability since the properties

were turned over to the local market

, therefore, mainly, they are rents nominated in pesos ".

In this sense, he indicated that in AMBA the queries for temporary rentals oscillate between 5% and 10% of the total.

This is a figure that is increasing, because in 2018 the demand for this type of property was between 3% and 5%.

On the other hand, if you choose to put the property up for rent, it is essential to take into account that, from the new

Rent Law

, the

contract

is extended to three years and the increases are no longer agreed between the two parties, but are governed by the Rental Contract Index (ICL) established by the Central Bank.

What does this mean?

It means that it is important that the landlord knows that during this period he cannot terminate the contract, unless he financially compensates the tenant and he accepts.

And you cannot know for sure what profitability you are going to obtain from that property, since you cannot stipulate the increases.

However, "unlike what happens when

the

property

is

empty

, have

the

rented property allows to cover expenses 

and generates a profitability, which according to our reports, in CABA is 2.94% per year, "said Molina de Zonaprop.

Unlike when the property is empty, having the property rented allows you to cover expenses.

Photo: Archive

This makes it possible to maintain the unit and not have to face expenses while hoping to find a more prosperous market to sell when the contract ends.

In the event that there is no urgency to sell the property, you can choose the traditional or temporary rental options depending on the needs of each owner, but without incurring losses to cover the expenses of that property.

I have an empty apartment: should it be put up for sale?

In case of putting the

property up for sale

, it will be necessary to bear in mind that

the prices continue to decrease

.

It is currently going through, after 2020, the worst year in terms of deeds.

"

There are many oversupply

in most segments and therefore, whoever is evaluating this option will have to be very flexible in the intended price to be able to sell it since this situation will hardly change in the short or medium term," he warned Rozados of Real Estate Report.

During 2021, in Federal Capital, prices accumulate a depreciation of

4.2%

, while in GBA North it is 2.6% and in GBA West-South it is 3.3%.

"It is important to clarify that we see this with published prices, then in operations there is usually a decrease in the value of the transaction between the published price and the closing price," said Molina.

As he explained, currently the supply of properties for sale in Zonaprop increases at an annual rate of 25%, it is 1.45 higher than the stock they had in 2017.

In this sense,

there is a need for more competitive prices

for a market where the stock of real estate accumulates given the lack of mortgage loans, which enable access to housing.

Meanwhile, due to the context of the rental market after the rental law, it is beginning to be seen that

properties that were previously for rent were put up for sale

based on the new conditions that the owners found.

In conclusion.

For Rozales, "the important and central thing always to make any decision in real estate matters is to know and be objectively informed about the market situation. In this sense, it is necessary to differentiate that

not all locations behave the same,

nor do all segments, since whether they are apartments of one room, two, or houses, etc ".

For his part, Molina de Zonaprop stressed that it is

key to

consider what

the owner's need is

when making a decision about what to do with the property.

"If there is an

urgency to sell, it

will be necessary to

reassess the price

of the property to make it competitive or directly enter the market with a cheaper price. In fact, we see that the trend towards lower prices on the portal is motivated by the new ads that enter with a value of 3.9% below the rest of the offer and then have a general impact ".

Except for personal issues, everything would indicate that to seek

better profitability,

the most convenient option today is 

to rent the apartment

, either temporarily or permanently, to avoid having it empty and bearing maintenance costs.

However, it will also be a good alternative

pending a recovery in demand

in the future that will allow for better sales prices.

LN

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