Buenos Aires — The real estate sector is no stranger to Argentina’s deteriorating economy. The devaluation of properties and increasingly unaffordable rents have distanced investors from this sector, which has been a protagonist in the local market. However, construction continues to be one of the safe bets in the medium and long term.
Having $1 million to invest is not an option available to many Argentines, but it is enough capital for a strong investment in real estate.
Here are four options to invest $1 million in real estate in Argentina.
#1 Apartments in the city of Buenos Aires
Miguel de Maggio, director of Depa Real Estate, suggests targeting the northern corridor of the city of Buenos Aires, on Avenida del Libertador, which can be defined from Avenida Lacroze to the Monumento a los Españoles.
“It has been a place where prices have dropped and is potentially an opportunity to make a real estate investment,” said De Maggio.
In that area there are apartments that have dropped in price by 30% or 40%., and which can be explained by several factors: “families have not been able to bear the expense of the expenses (which today are well over $100,000) or because they are inheritances”.
De Maggio also points out that there are properties on the market “that have been for sale for a long time, with the purpose of selling them”, and that in these times “they are more permeable”, to accept offers.
“They are not all options in this way but new opportunities have arisen. And Avenida del Libertador is one of them.”
#2 Opportunities in Greater Buenos Aires (GBA)
With substantial growth in the last two decades, another option is large properties in the Greater Buenos Aires.
Augusto Zunino, director of Zunino Propiedades, a real estate company and developer in the northern area of the GBA, said that “with an investment of $1 million it is convenient to invest in large lots that are divided into 500 sq. m. units, and that allow the construction of small gated communities, without amenities, so that the expenses are very low for those who live there”.
According to Zunino, such an investment allows “a net return on investment in the medium term of 30%”.
The geographical location is concentrated in residential areas located between the federal capital and the Pilar and Escobar areas. “It allows moving to the green suburbs, with security, but lower fixed costs per month,” said Zunino.
Another investment option is in a trust, with an initial investment of $20,000 to $30,000 and then closing the remaining payments in pesos, “which is always covered in local currency”.
This alternative makes it possible to buy one or several apartments at a fixed price, said Zunino.
#3 The search for profitability
A series of ZonaProp reports with square meter quotations in Greater Buenos Aires reveals the increase in property values in certain neighborhoods, and which highlights the following year-on-year gains in value:
- La Manuelita (San Miguel): $1,558 (per square meter), 355.54%.
- Ingeniero Maschwitz (Escobar): $1,734, 32.47%.
- Lagomarsino (Pilar): $1,108, 17%.
#4 Diversifying an investment
Ariel Champanier, a RE/MAX Premium broker, recommends diversifying an investment and targeting different objectives within the real estate market.
With that strategy, according to Champanier “with $500,000 you could buy three new two-room apartments in Palermo (in the city of Buenos Aires) for temporary rentals, which have a yield of around 8% per year”.
The other half of that million dollars could also be divided up, he adds. “A part of it could be invested in a good well development, ideally in the northern sector of the city of Buenos Aires, something around $150,000″.
While with the remaining $350,000, you could buy a retail space. “This type of property has very low prices today, but it is estimated that in the medium term they will recover”, Champanier said.