What are the aspects that must be taken into account when buying a property to rent it and get an income? Key tips
When thinking about real estate investments, the aspects that will impact this decision are entirely different from those that have to be taken into account when the objective is to buy a property in which they will live.
Making investments in Argentina is not easy, but you can. Historically, real estate investments are those that generate more peace and security in Argentines. “There is nothing like investing in bricks,” is a common phrase in our country because, whatever happens, the brick always remains.
How to calculate the rent for real estate investments
The first important point to be clear when investing is to know what is the expected income that will be received. The same must be done when real estate investments are made.
According to the March study of Mercado Libre, a 50m2apartment has an average value, in the City of Buenos Aires, of US $ 130,450. On the other hand, the average rent for this footage is $ 10,500, that is, little more than $ 500 (taking the average exchange rate of that month at $ 20.90) per month. In annual terms, the income that would be obtained is the US $ 6,000.
Then, by dividing the US $ 6,000 per year received for rent divided by the total investment of US $ 130,450, the profitability of a real estate investment in the Federal Capital is around 4.6% in dollars.
The formula to calculate the profitability of a real estate investment: Annual rent/investment x 100%.
Of course, this number may be higher or lower according to the purchase value of the property as well as the price that is rented.
In addition to the annual rental income, investors should know that the prices of the properties – even more so in the big cities – are continually increasing, so that in case that property is sold tomorrow, You would also get a significant gain. As a reference, between March 2017 and the same month of this year, real estate prices increased 15% in dollars.