Airbnb effect: the boom in temporary rentals is pushing the construction of buildings with accommodation for rent

The temporary rental format is booming. Thousands of people who come from within or from abroad to study or work in the city of Buenos Aires have generated in recent times that promoters seeking to satisfy this demand (who believe that it will last a long time) decide to undertake the construction of buildings of Airbnb type houses for rent.

Faced with the growing preference for this format, encouraged by both potential tenants and investors, developers are beginning to create projects prepared and designed for this type of property that generate higher profitability than a traditional rental. In fact, temporary rental properties are among the most in demand in the real estate market. Many people are looking for this type of accommodation to stay in, including tourists, students, “digital nomads” and people in need of healthcare, among other situations.

“Depending on different variables, current returns can be as high as 9% per year,” he said. Mariano Gubitosicommercial director of the Portland Group, GlobeLiveMedia. Currently in CABA, it is estimated that there are around 16,000 apartments operating under the Airbnb system and the number is increasing month by month. Several of these properties were previously allocated to the traditional format, but due to the Ley de Leas, which is currently the focus of debate, the owners have decided to equip them and offer them to the temporary model.

This has prompted property developers to build purpose-built projects, with fully furnished accommodation for rent and good connectivity a priority for tenants. “The main thing is to understand what this temporary tenant could be. Based on this analysis, it is important to define the location and the advantages that the area offers and the type of units to be carried out,” explained Gubitosi.

Location is essential, many of these developments have opened or are under construction in areas such as Palermo, Belgrano, Retiro or San Telmo, among others, close to universities and agile means of transport such as the metro and Metrobus .

In these buildings, large lots are preferred, preferably in the corners, with unobstructed views, on the northern corridor of the city of Buenos Aires.

Dario Erlichof the CEK group, commented GlobeLiveMedia that “we try to find land where there are good commercial premises suitable for gastronomy, in the heart of gastronomic and artistic districts, which are close to public transport, universities, high-density shopping centers and businesses Proximity “.

Temporary rental offers an average rate of 49 USD per night. · The most attractive neighborhood for business is the multifaceted Palermo, between SoHo, Hollywood and Las Cañitas, where today the offer is made up of 5,265 properties with a price that fluctuates between 60 USD and 80 USD per night, for quality units.

“It is followed by Recoleta with an offer of 2,295 properties, Belgrano with 757 and San Telmo with 526, and much lower tariff values. Temporary tourist rental registers a marked growth trend both in terms of demand/occupancy levels (in 2022, incoming foreign tourism was still at levels of 50% compared to the pre-pandemic phase according to the data from the government of Buenos Aires) and also with an upward trend in rates (driven by the increase in travelers from abroad),” he said. Infobes Ariel Fridayof the MAHE group.

Following these guidelines, different developers are working on various mixed-use projects, i.e. suitable for temporary rental, primary residence, professional and traditional rental. For example, the RED studio in collaboration with the architectural firm McCormack Asociados proposes Spot Studios, a building located two blocks from Plaza San Martín. It will have a fully functional basement, 14 floors with units from 22 square meters to 260 m2, loft-style, compact and with amenities such as a lobby bar, gym, terrace, rooms meeting, among others.

The value per square meter for sale is close to 1,740 USD (price in MEP dollars) and 6,000 USD is invested in equipment and decoration. The financing offers an 80% advance and the balance in 10 monthly contributions in pesos adjusted by the variation of the CAC index (Argentine Chamber of Construction). The development estimates a total annual income of $12,750 (70% occupancy per year with an average rate of $50 per night) and if you want to pay for apartment administration, you get $9,560 in income net.

For its part, Haaus Hotel Living, of the CEK group in Palermo SoHo, offers flexible houses that can be combined with 1, 2 and 3 rooms ranging from 30 m2 to 50 m2. The rooms have the soul and equipment of a hotel, with a rooftop swimming pool with a solarium with open views of the neighborhood, barbecues and drivers, among other amenities.

The capitalization and appreciation of Haaus varies between 30 and 50% in dollars during the 24 months of work, and the buyer can enter values ​​that start from 2,000 USD per m2 and which, when completed, will be are around 3,000/3,500 USD per m2. The ticket starts from 85,000 USD paid with 30% of the ticket and the balance in 24 installments. The financing is between 24 and up to 30 months, and the client can opt for a mode of payment by installments in pesos adjusted by the index of the Argentine Chamber of Construction (CAC), or by installments in banknotes. a dollar.

Potential buyers have Palmera Nova as an option. In the Parque de la Innovación de Núñez, where the old Tiro Federal was located. The project offers 2 and 3-room units, bright and spacious spaces designed to study or work from the apartment. The 3-room units have a split plan (with the living room and kitchen in the middle and the bedrooms, both en suite, on each side. This allows independence in each suite and can be rented to two people who share the common part of the department at a time, somewhat replicating the concept of a university campus.

Temporary leasing has a very attractive present and future to invest in, primarily due to its profitability, growth prospects and low risk due to the equity backing involved in owning a safe asset such as ‘a property.

However, from the sector they warn that to access a high and stable profitability it is necessary to have adequate units by design, conditions and location, as well as a professional and efficient rental management that guarantees to achieve the best rates in a company where reputation C is key.

Venneri, added that “the company thought, designed and built specifically for temporary rental (which allows in the near future to comply with the regulations and regulations that will be imposed, as in major tourist cities in other parts of the world ) must be supported by schemes of safe and flexible investment options to enter the business”.

As is often the case with attractive “trendy” businesses, the supply thins out over time and “only those who meet these conditions remain in the right areas”, Venneri concluded.

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