Know how to Buying Real Estate in Argentina
Topic: Real Estate Argentina
Investing in properties
Without a doubt, putting your money into bricks is indeed one of the best possibilities of profiting from savings without great inconveniences. Usually the counterpart to this “safe” investment is the low return and a clear roof to the profiting. However, in the case of investing in Argentina this is not the case.
The 2001-2002 crack, and the subsequent drop of the local currency (Argentine Peso) to four and then stabilizing in three pesos to one dollar, opened a fantastic real estate market with fast returns and a high growth rate.
One of the best ways to picture this momentum are official index numbers issued by the Argentine statistics Institute (INDEC) expressing that during these first years, the costs for construction have been 32% beneath the historical average. Then 2003 showed that same tendency within the real estate market (both for new and old properties).
The options have broaden even more, in terms of “bricks investments” if we include in this picture properties owned by banks pursuant to a foreclosure.
The prospects are indeed interesting and encouraging. Nonetheless, all bright side has a counterpart that should be considered in order to take the best out of each and every option. This way, after considering pros and cons, the decision making process will be much more productive and the trend of the investment quite more foreseeable.
As follows we’ll explore each of the options and highlight the essential aspects to be carefully considered when looking for a real estate investment in Argentina. The language barrier is one of the very first inconveniences you might bump into. In spite of the fact that a great portion of Argentineans understand English, an important percentage of them speak what it’s know as Spanglish (a mix of English and Spanish) that can be helpful and suitable for directions and general information, but it’s not enough for business transactions. Don’t hesitate to work with bilingual experts, it may seem a bit more expensive at the beginning, but it’ll sure pay off in the end.
Depending on your country of origin there are some legal limitations to invest in Argentina, all of which can be sorted out in advance if a proper research is done before the transaction. This item will vary greatly depending on what your investment is. Around the world, it’s not the same to invest on a profitable company such as an industry, than to buy a property for housing or renting.
For all legal aspects to signing the title and tax payment, sometimes finding a local associate is a good option. Or put in another way, the only way to invest is with a good research done before hand with local knowledge.
In these cases, it’s important you don’t go into this matter at the last minute.
Cheaters are everywhere in the world, Argentina is known for it’s “viveza criolla” meaning, those who wish to become rich in a sec without measuring the consequences. This is only to be avoid if you do things without a rush and get to know who you’re dealing with, know all the “behind the scenes” information. Some people advise you to only work with foreigners from the same country that you’re from… My advise is not the same. A cheater is a cheater everywhere in Argentina, in the States, in Japan or in Italy. (no need for examples of frauds all over the world).
To begin a transaction fearing the person you’re working with is going to deceive you is to begin with the wrong foot. Know who you deal with, get involved, work only with bilingual people, and turn to a certified translator if needed for legal documents, have them certified.
Purchasing properties already built in Buenos Aires has true advantages at this point for their market price has not yet recovered completely and the square meter cost in dollars is –in the most sophisticated areas of the city of Tango- very competitive, if we compare it with the areas historical average or internationally to similar locations world wide. For we’re still operating in a recovering market the possibilities of negotiating a fare price is a true possibility.
It’s important that if you decide in advance what kind of investment are you aiming for, whether it’s commercial (restaurant, hotel, etc), industrial, cultural (museum, show room) or residential (for housing or renting, recycling and selling at a better price when the market fully recovers).
The reason is that not all areas in Buenos Aires are suitable for all of these purposes. Keeping a sharp eye it’s very important with brokers, request for certified documentation that states the availability of the area in which you are to buy the property. These can be checked in public offices. And to the minimum language barrier (similar terms or indications that aren’t clear to your understanding) check with bilingual brokers and public translators.
It’s very important that the property you are into buying is –previously to the transaction- checked by architects, electricians, etc, some times dream renovation houses have root problems that are not evident or specified and when the purchase is done there’s no going back.
Other appealing options are properties owned by banks. These in Argentina are known as Remates Judiciales (Judicial Auctions). The first and most important thing to do in these cases is to check the liability of the property. When these go on auction, they have been advertised and ad published in the most renamed newspapers of the country. Without these ads, the auctions are not legal. Some banks have a portfolio of properties they offer, however these are to be published too. If you missed the paper, there’s another place to check, that’s the Judicial Power official bulletin.
In these kind of properties, the suggestion to checking the property’s legal status is a must, for indeed it’s a troublesome property, so any “con” it may have, it’s good to know, for you’re paying a low price due to those aspects. The more you know the better you’ll offer at the auction without overbidding. One other crucial matter to consider is whether the building in question is being occupied by people who took over the property for it was empty or it’s shut down empty. One other aspect to consider is if someone has life benefit of the property due to a testament or succession. All this information is available in the district court house and secretariat, it can be perused by any person with an ID, needn’t to be a lawyer.
Yet the most important matter when purchasing properties in this kind of auctions is to keep a clear mind and don’t overbid. How would you know what a fare price is without being too emotional about the fact that you feel that is your place to have? Research the market in advance. Check previous similar auctions, visit the property you’re interested in during the specific dates and times stipulated, check it with specialists… Doing your homework pays off in these cases.
In many cases the properties auctioned great buying opportunities, top building, low price… this if you have taken care of the essential tips we’ve pointed out before.
Buying a property for profitable investments in Argentina is indeed an option, though not something to do lightheaded. For it’s necessary some field work, research, capital flow, good contacts, detailed information. I’ll be posting more information on the matter, nonetheless feel free to email me on any particular question or matter.
For more information :Email Bob Frassinetti.
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Bob Frassinetti. Copyright 2005. Roberto Dario Frassinetti.
Posted by bob frassinetti
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