Airbnb effect: temporary rentals are 130% more expensive than traditional ones

For an apartment to be temporarily rented, it must be very well equipped and everything works in perfect condition: even Internet connectivity.

A private report found that renting an apartment in the city of Buenos Aires through the Airbnb platform is 131% more expensive than in the traditional rental market. This is one of the main findings of an analysis that compared the monthly cost of making a rental contract for a home where both options present in 34 Buenos Aires neighborhoods are compared.

The study was carried out by Properati and was based on a referential calculation: the temporary rental of a property is for 30 days on average (according to the price established by the owners on Airbnb).

High inflation, the low profitability offered by traditional rentals (now estimated at 3.2% average), the controversial Rental Law and the price of the dollar are some of the factors that led many owners to withdraw their homes from the market. of formal rentals.

And many decided to allocate their property for temporary rentals through the Airbnb platform in search of improving profitability. This model is a less regulated operation, focused mainly on tourists, but also on university students or people who come to telework from Argentina.

The two real estate operations that are compared in the report have their own particularities. Each one serves an audience as a priority, they have different regulations, the nature of the negotiation is different and the perceived value varies according to time or place.

Fuente: Ready

Ariana Cafferata, from Properati and Proppit in Argentina, told Infobae that “temporary rental is focused on tourists, both national and foreign, and the regulations, at least in Argentina, are quite flexible or non-existent, since the negotiation is governed today by the digital platform in which it is searched, and the price is framed in the season, the cost and the competition. On the other hand, there is the traditional rental that has a more general approach towards the Argentine resident citizen and is subject to the Rental Law that already establishes time and price rules in the contract”.

Temporary accommodation is a short-term service, there are even per day, weeks and a maximum of 3 months, although some renew it for up to a year.

From the study, it emerged that Villa Luro is the neighborhood with the greatest price difference between the two modalities: there the average monthly rent is $62,245, while on Airbnb it is 258% more expensive, with an average price of $222,900 per month.

Fuente: Ready

Cafferata expanded on the following: “In theory, renting an apartment for 30 days in Villa Luro should cost about 222,900 pesos. If you want to rent by signing a conventional contract, the price per month should be approximately $62,245. Airbnb is focused on tourists, both foreign and national, and one of its objectives is that users can feel part of the urban and cultural life of the city. That could be the case of Villa Luro, which, although it is not among the most attractive places for tourists, is a middle-class neighborhood in Buenos Aires where you can experience local traditions that are less influenced by mass tourism.”

The apartments for temporary rent must have all the extra services such as Internet, water, cleaning, which are part of the price. They are more similar to what a hotel proposes

Unlike neighborhoods like Puerto Madero and Palermo that offer mostly luxurious and modern homes on Airbnb, Villa Luro has a wide range of prices and most properties are standard apartments. The most expensive has an estimated price of $386,400 per month and the cheapest of 105,000 pesos. These values ​​are beyond the reach of many tenants, who in the traditional market find the most expensive apartment at $140,000 and the cheapest at $37,000 (a studio apartment but with a small area and in a remote neighborhood).

In Villa Luro the apartments are more standard than luxurious, but also if they are properly equipped they qualify on Airbnb

As well as Villa Luro, La Boca (237%), Barracas (217%), San Nicolás (183%) and San Cristóbal (176%) are the neighborhoods where the monthly cost of an Airbnb apartment is farthest from traditional rentals.

Puerto Madero is the neighborhood with the lowest price difference between the two models in CABA. Renting an apartment on Airbnb per month costs approximately $455,520, 46% more than the traditional rent, which is 311,000 pesos.

According to Cafferata, two things happen: “The perception of the upper class neighborhood is not the most sought after for the majority of tourists who are looking for cheaper accommodation than a hotel. And also. the nightlife and gastronomy in this place are important factors for many travelers, but it competes with other equally touristy and cheaper neighborhoods”.

In the rest of the city, neighborhoods recognized as touristic show a correlation with a higher Airbnb price. This is the case of La Boca, San Nicolás or Barracas, where the difference between the price of temporary and traditional accommodation rises.

Belgrano (62%), Palermo (65%), Agronomía (80%) and Parque Chacabuco (84%) follow Puerto Madero as the neighborhoods with the lowest price difference between the two rental modalities.

According to the analysis carried out, the average rent for an apartment in most of the neighborhoods of Buenos Aires ranges between $50,000 and $150,000. The cheapest places to rent are La Boca, Parque Patricios and San Cristóbal; while the most expensive are Puerto Madero, Palermo and Belgrano.

The houses to rent in Puerto Madero are always the most expensive, approximately 311,000 pesos are needed per month

Meanwhile, renting a similar property through Airbnb for a month costs between $150,000 pesos and $250,000 in 85% of the neighborhoods analyzed. The cheapest sectors to rent temporarily are Agronomía, Villa Santa Rita and Parque Chacabuco; while the most expensive are Puerto Madero, Palermo and Recoleta.

In Argentina, many owners chose to rent their properties in dollars and for the temporary format because they understand that the Rental Law does not benefit them and also demand that the contracts last 3 years.

In other cities in the region this situation does not occur, for example in Chile the Airbnb modality also advanced a lot, as in Lima, Peru.

Cafferata, concluded that in “Mexico City the situation is different from what happens in Buenos Aires; there is a general trend in which Airbnb rentals outnumber traditional ones more strongly in the cheaper sectors of the city. It is important to take into account that in the Aztec country the traditional ones are also regulated, but with less rigidity than the Argentine law. Mexico City is one of the main destinations for digital nomads. The Mexican capital is experiencing a true tourist boom, which, added to other factors, makes renting a home on Airbnb more attractive. The main beneficiaries are nomads or people who temporarily move to another city to continue working remotely.

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