During the first month of 2024, two Buenos Aires neighborhoods in the south of Buenos Aires stood out as the most profitable for renting used apartments. Parque Patricios and San Cristóbal, adjacent to each other, became areas of great interest due to their recent transformations and their real estate potential.
By comparing the apartments available for formal rental in pesos with the equivalent units offered for sale in each neighborhood of the city, Parque Patricios showed a profitability of 5.41% in the case of the three environments, while San Cristóbal registered 5.43% for four-room units, according to the latest Real Estate Report report.
Parque Patricios, for some time now, has been the epicenter of an urban metamorphosis that knew how to adopt the concept of “living 15 minutes from everything.” With its focus on companies strat up and real estate developments aimed at digital nomads, This neighborhood was consolidated as a new Technological District enhanced by the transfer of the headquarters of the City Government to the neighborhood.
San Cristóbal, for its part, joins the list of Emerging neighborhoods in Buenos Aires that were off the radar of many Buenos Aires residents and slowly they began to position themselves as good options for those looking for a place to live. Neighbor to Boedo, this historic neighborhood, with its roots dating back to 1869 as an area of country houses, is now in the center of the attention from developers and home seekers alike for its combination of tranquility, accessibility and real estate growth.
Profitability increases and stabilizes
These percentages occur in a context where The gross annual rent of used apartments grew slightly compared to the same month of the previous yearsince in January 2023 the general average was 3.48% annually, while in January of this year the average was 3.94%.
If the distinction is made between typologies, The units that left the most income were the three-room apartments, with a gross annual average of 3.98%, while those with two and four rooms were at 3.97%. In the case of studio apartments, this typology gave the lowest profitability with an average of 3.83%.
“We must consider that this profitability is what is obtained in the first month of starting the rental and that now, since the DNU that repealed the rental law, It will depend on the agreed update rate so that it is maintained or diluted if the purchase and sale value of the property is considered stable,” explains Germán Gómez Picasso, founder of Reporte Inmobiliario.
The specialist indicates that, by resorting mostly to adjustments in shorter periods in the new rental contracts, income stability could be better maintained. This would make the investment somewhat more attractive for those thinking about buying to rent. “Previously, with the rental law that prohibited updating before one year and then every six months, a decrease in the real rental price and a considerable reduction in profitability was quickly generated.especially in a context of high inflation,” mentions Gómez Picasso.
Is it advisable to invest in these neighborhoods?
A key fact regarding this phenomenon is that The most profitable neighborhoods are not always the ones chosen by investors when buying a property.. The explanation lies in the fact that these neighborhoods have a low sales value. For example, in January, Parque Patricios had an average of around US$1,388/m² for three-room units, while San Cristóbal was at US$1523/m² for four-room units. In comparison, the average sale of a three- and four-bedroom apartment in the city of Buenos Aires is US$1,719 m² and US$1,679/m², respectively.
This makes them less attractive to investors., since, as Gómez Picasso points out, “in times of crisis, sales values in these areas tend to recover more slowly.” He explains that this phenomenon is based on the first axiom of the real estate market: location. “The higher the risk, the higher the profitability. Investors generally prefer to obtain a lower return in a prime location because they know that the property is more liquid, that is, easier to sell when they want to sell, and Its value does not depreciate as much in times of crisisin addition to recovering more quickly,” mentions the specialist.
Another investment alternative, with prices slightly higher than those of Parque Patricios and San Cristobal but still below the most exclusive areas, is found in the adjacent neighborhoods like Almagro. Here, property values are recovering after a three-year period of decline. The average rent for a three-bedroom apartment in Almagro is $450,000 per month, while Its sales value is slightly above averagearound US$1797/m².
“Almagro is a area highly sought after by buyers, because on the one hand it is a traditional neighborhood with tango history, a good transportation option due to its central location and educational, commercial and cultural infrastructure. It is highly sought after due to its proximity to the benefits that Caballito and Palermo offer with more attractive prices,” he states. Maria Inés Kries, commercial manager of Newland.
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