In Argentina, the trend of buying small apartments to transform them into temporary rentals offered by Airbnb is growing among those who have money to invest in real estate. According to data from companies associated with the Argentine Real Estate Chamber, sales with that destination rose around 15% compared to last year.
The reasons behind this phenomenon are several, but especially they are governed by the economic situation that the country is going through, to which is added a rental law that generates more doubts than certainties, especially in owners.
With three-year contracts that are indexed every twelve months, in recent times, those who can invest in real estate saw a new chance in a market that, due to the lack of credit, moves little. And the opportunity, for those who can, is in the acquisition of studios or one-bedroom apartments that are intended for temporary rentals.
Another fact: based on the publications made by the platforms, and coinciding with the numbers handled by real estate, there are about 17,000 properties for temporary rental. The vast majority, concentrated in the north of the City. On the opposite sidewalk, those published as permanent housing are around 1,500.
Investments to buy apartments and allocate them to temporary rentals increased. Photo: Andres D'Elia
Winners and losers
The temporary rental modality allows you to offer apartments tied to the dollar per day, per week, per season, or for three months. These rentals are more feasible for people who travel, who come from the interior or who need a place to stay to treat hospitals in the area near the department.
According to José Rozados, founder of Reporte Inmobiliario, those who participate in this phenomenon are those who consider the real state as a refuge of value and today, in the midst of a context of economic uncertainty, "they see prices that they consider very attractive or acceptable for the purchase of apartments".
"They see that there is now an opportunity, and they choose small and well-located apartments because that way they avoid the question of putting them on permanent rent for three years," says Rozados.
"When someone sees that an apartment in Palermo is leaving 75,120 dollars when before it was <>,<>, they may consider it appropriate to buy it. The motivating value is the price, and then to maintain it you think that it is a temporary rental. Unfortunately with traditional renting the current situation discourages, "he argues.
Rozados highlights that the annual profitability of temporary rental is 6%, while that of permanent rental is positioned at 4%.
Changes in regulations?
For his part, Alejandro Bennazar, head of the Argentine Real Estate Chamber, points out that both Airbnb and other rental platforms have allowed to double or even triple the rents received by owners.
Bennazar comments that apart from buying to get a quick rent through a temporary rental, it began to happen that the investment in buildings by buyers is now being done if the co-ownership regulation includes temporary rental as suitable.
This, in most cases, will have to be resolved between the owners of each consortium to approve or reject the temporary rental of a unit as a modality within their buildings. Mainly, because these buildings are governed by residential purposes and not by lodging contracts.
In addition, he argues that the trend has been growing for a year, when there began to be shortages in the supply of housing.
Santiago Romero is co-founder of the temporary accommodation company Depptö, which is responsible for providing a commercial and operational service to apartment owners who want to position themselves on Airbnb or other platforms.
In his daily work, Romero points out that they currently receive about 15 properties per month. Before mid-year, he says, they will be managing about 100 properties in Buenos Aires. That is, they will serve more than 100 owners who turn to temporary rental.
"The owners began to see that by listing the apartment on Airbnb they end up earning double what they projected with a traditional rental. The ball of this type of profitability began to run and the owners who ended the rental contract began to lean towards the temporary, "says Romero.
He also comments that this phenomenon has been happening for a short time, despite the fact that Airbnb has been around for more than 10 years. However, he says that this modality begins to generate competition and that in the long term not all properties will be able to have very high yields, because prices will deflate, while those of the traditional will rise.
Investment
"Renting an apartment under this type of profitability implies making an investment in equipment, which is nice, well maintained and equipped. And this is not accessible to all owners," says Romero.
The co-founder of Depptö points out that there is a lot of difference between who can equip it well and who cannot; or who did not get a property in a demanded area. In those cases, now the prices of those rentals begin to fall, something that did not happen before.
Investments to buy apartments and allocate them to temporary rentals increased. Photo: Andres D'Elia
According to Clarín, an owner who recently invested in a used 30-meter studio apartment in the Palermo area, disbursed $ 63,8 to buy it. Then, expenses on remodeling and equipment were around $ <>,<>.
Per day, the value of that same temporary rental is around 16 thousand pesos, and adding 20 nights the total price is over 300 thousand pesos. The expenses are at the expense and in the commission of 15% that you must leave to the platform you use to make your department visible.
Bennazar points out that the costs vary according to the area, but that for example in the converted microcenter offices in the Federal Capital you can invest between 35 thousand, 40 thousand or 45 thousand dollars.
"You make some small modifications to the department of between 10,15 and 20,35 dollars that even have state benefits. That unit today is being rented between <> and <> dollars a day, "he concludes.
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