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Thread: Buenos Aires real estate

  1. #1
    Senior Member marc26's Avatar
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    Buenos Aires real estate

    this is a very interesting article and something of personal interest

    this is our big trip next year, Argentina, Brazil, my wife's 1st to Latin America ( she may meet me in Colombia/Peru in August)

    i wouldn't be adverse to buying a 1bdrm for 130k usd or under
    use it a bit and rent it out on the rental sites

    but having never been, i would like to check it out

    i think you could easily clear 15kusd a year( that is a super low estimate) on the rental sites
    only thing is i can't find any info on how tourism is going down there

    Buenos Aires Lures Foreign Buyers With Tumbling Prices?WSJ Mansion - WSJ.com

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    Quote Originally Posted by marc26 View Post
    this is a very interesting article and something of personal interest

    this is our big trip next year, Argentina, Brazil, my wife's 1st to Latin America ( she may meet me in Colombia/Peru in August)

    i wouldn't be adverse to buying a 1bdrm for 130k usd or under
    use it a bit and rent it out on the rental sites

    but having never been, i would like to check it out

    i think you could easily clear 15kusd a year( that is a super low estimate) on the rental sites
    only thing is i can't find any info on how tourism is going down there

    Buenos Aires Lures Foreign Buyers With Tumbling Prices?WSJ Mansion - WSJ.com
    Socialism is a very risky investment. 55

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    Super Moderator LivinLOS's Avatar
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    I am always loath to consider capital investments in places that are remote to me..

    Consider Argentina's currency issues and collapse before (and looks like heading towards again)... So many things, taxation on 2nd homes, etc etc..

    A friend made what seemed an astute property deal in france, as a toy home and rental.. Now the new taxation regime, a huge capital gains tax should he try to get anything back.. some silly games played with price declarations.. etc etc.. While it may not have been the worst financial choice anyones ever made, its a millstone round his neck, its work and hassle and worry, and I know the effort hasnt been worthwhile for him.

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    Senior Member marc26's Avatar
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    Quote Originally Posted by LivinLOS View Post
    I am always loath to consider capital investments in places that are remote to me..

    Consider Argentina's currency issues and collapse before (and looks like heading towards again)... So many things, taxation on 2nd homes, etc etc..

    A friend made what seemed an astute property deal in france, as a toy home and rental.. Now the new taxation regime, a huge capital gains tax should he try to get anything back.. some silly games played with price declarations.. etc etc.. While it may not have been the worst financial choice anyones ever made, its a millstone round his neck, its work and hassle and worry, and I know the effort hasnt been worthwhile for him.
    for 100-130kusd and you would get the rental returns back easily in the right spot
    i think it is worry free
    you either make your money back in 5-6 years and just have a free place in a great city or things stabilize and you make 200k on the deal

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    Super Moderator LivinLOS's Avatar
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    A 130k apartment generates 20k per annum after costs (maintenance, condo fees, income / rental taxes, everything) ???

    Seems an ambitious return.

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    If you've got the kind of money you don't need back anytime soon, I'd say go ahead on the basis of the fundamentals.
    But prepare for a long wait if you need the capital back anytime soon. It ain't so much of a free market in S America just yet.

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    Senior Member marc26's Avatar
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    Quote Originally Posted by LivinLOS View Post
    A 130k apartment generates 20k per annum after costs (maintenance, condo fees, income / rental taxes, everything) ???

    Seems an ambitious return.
    like i said, that would depend on the tourism aspect and i don't know how that has been affected

    but going by the apartments i have rented in Colombia/Panama off vrbo and flipkey in similar neighborhoods, getting 50% bookings at 150/day would seem very doable

    i would only do something like this if i planned on spending a decent amount of time there and any rental income would be seen as gravy

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    Super Moderator LivinLOS's Avatar
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    But who manages those bookings, surely the management co is going to take maybe 30% for the handling, cleaning, etc..

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    Senior Member marc26's Avatar
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    Quote Originally Posted by LivinLOS View Post
    But who manages those bookings, surely the management co is going to take maybe 30% for the handling, cleaning, etc..
    yup
    so if you are getting 50% booking, that is about 18k after management fee
    so 13-15k after all in

    even at 8-10% in a place you are looking at as just a place to have and not a money maker, is very good

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    Quote Originally Posted by marc26 View Post
    for 100-130kusd and you would get the rental returns back easily in the right spot
    i think it is worry free
    you either make your money back in 5-6 years and just have a free place in a great city or things stabilize and you make 200k on the deal
    You seem to be ignoring the risk that the government could just seize it.

    Have you read the comments to the article?

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    Senior Member marc26's Avatar
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    Quote Originally Posted by Dupree View Post
    You seem to be ignoring the risk that the government could just seize it.

    Have you read the comments to the article?
    but there hasn't been any case of seizures
    as i said, i would only think about doing something like this if i were going to spend a good amount of time there

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    Quote Originally Posted by marc26 View Post
    but there hasn't been any case of seizures
    as i said, i would only think about doing something like this if i were going to spend a good amount of time there
    Expat Argentina: Argentina and Private Property

    I'll also point out that Title 22, Section 2370 of the U.S. Code provides for the total suspension of U.S. assistance to any country that seizes property owned by U.S. citizens. So, I do think this provides another measure of protection. If your goal is simply to buy some property here, an apartment, a vineyard, a farm, or just a place to call home, I wouldn't worry. Just make sure you have a good notary and pay your taxes and you'll be fine.
    Seems to be relatively safe. Just don't put your money in their banks.

  13. #13
    Super Moderator LivinLOS's Avatar
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    It was just 10 or so years ago they had the currency collapse and full on social breakdown (read the ferfal book) and they seem to be going right down precisely the same path again (capital controls, 20% inflation, government price controls, etc).

    Argentina is major risk currently.. Perhaps major return later, I dont know.. But its not in a good direction.

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    Quote Originally Posted by LivinLOS View Post

    A friend made what seemed an astute property deal in france, as a toy home and rental.. Now the new taxation regime, a huge capital gains tax should he try to get anything back.. some silly games played with price declarations.. etc etc.. While it may not have been the worst financial choice anyones ever made, its a millstone round his neck, its work and hassle and worry, and I know the effort hasnt been worthwhile for him.
    Very little has changed regarding taxes in France on real estate. The main change was the capital gain tax that was originally nil after 15 years. Now takes 30 years. Yet, that is not a deal killer either as it isn't that high.
    If it was a good deal a year ago before the changes, it still is today. The killer 75% tax law hasn't passed and is only applicable to residents at a high pay grade.

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    Super Moderator LivinLOS's Avatar
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    Isnt there a big change in how non french residents get taxed on rental returns ?? I know he was saying something about how awkward that was.

    His deal is complicated as it was a barn restoration (Gete), done by a friend / family without a lot of verified costs.. So his base cost on the house is super low and will face a huge capital gains tax bill, even tho he has far more costs in it than he can show (if that makes sense).

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    Rental income gets taxed at either a flat rate of 20% or a tax rate based on your real taxable income in your home country (if you are a non resident). If you don't wish to show them your real income for personal reason, you can opt for the 20% tax rate which is much simpler.

    It might sound harsh, but it seems what he didn't spend enough time to do his due diligence prior to investment. There are exemptions for renovation costs based on the classification of the property. The capital gain tax has only jumped a couple points since the new laws. There is a supplemental tax that was put in place now based on tier system. Again, it's about home work but my point is that the new law didn't dramatically change the landscape. I was better before jan 2013, no doubt but it's not a real game changer.

    How long has his owned the property? Is he a resident of the EU? There are many ways to reduce the tax hit.

    Anyhow, just trying to give some perspective

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    Back to our program
    Buenos Aires.... Palermo is lovely...

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