Airbnb effect: the boom in temporary rentals pushes the construction of buildings with homes to rent

One of the units that will hit the temporary rental market. It will be part of the Spot Studios project

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

Given 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 greater profitability than a traditional rental. In fact, temporary rental properties are among the most demanded in the real estate market. Many people look for this type of property to stay, including tourists, students, “digital nomads” and people who need health treatment, among other situations.

“Depending on different variables, current returns can reach 9% per year,” said Mariano Gubitosi, commercial manager of the Portland Group, to Infobae. Currently in CABA it is estimated that there are some 16,000 apartments that operate under the Airbnb system and the number is growing month by month. Several of these properties were previously allocated in the traditional format, but due to the Ley de Leas, which is currently at the center of the debate, the owners decided to equip them and propose them in the temporary model.

“Temporary rentals are attractive for buyers with an investor profile due to their high profitability, which in some cases can go up to 9% per year.

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

The location is key, several of these developments have opened or are under construction in neighborhoods such as Palermo, Belgrano, Retiro or San Telmo, among others, close to universities and agile means of transport such as the subway and the Metrobus.

In these buildings, large lots are prioritized, preferably on corners, with open views, on the north corridor of the City of Buenos Aires.

The Haaus Hotel Living project is also built with commercial premises suitable for gastronomy in Palermo

Darío Erlich, from CEK Group, commented to Infobae that “we try to look for 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 shops. of closeness”.

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

This is a unit in the PH Eco project that already works in the San Telmo neighborhood, the connection with the outside was also prioritized in the proposal

“It is followed by Recoleta with an offer of 2,295 properties, Belgrano with 757 and San Telmo with 526, and much lower rate values. The temporary tourist rental registers a marked growth trend both in demand/occupancy levels (during 2022 incoming foreign tourism was still at levels of 50% compared to the pre-pandemic stage according to data from the Buenos Aires Government) and also with a growing trend of rate (driven by the advance of travelers from abroad) ”, Ariel Venneri, from the MAHE Group, told Infobae.

Following these guidelines, different developers work on various mixed-use projects, that is, suitable for temporary rental, first home, professional and traditional rental. For example, the RED firm together with the McCormack Asociados architectural studio 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, meeting rooms, among others.

One of the developments that come to Retiro at a point close to universities and the presence of offices of renowned companies

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

For its part, Haaus Hotel Living, from the CEK Group in Palermo SoHo, proposes flexible homes 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 pool with a solarium with open views of the neighborhood, barbecue grills and stokers, among other amenities.

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

Potential buyers have Palmera Nova as an option. In the Parque de la Innovación in Núñez, where the former Tiro Federal was located. The project offers units with 2 and 3 rooms, bright and spacious spaces designed to study or work from the apartment. The 3-room units have a divided 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, somehow replicating the concept of a university campus.

Temporary rental has a very interesting present and future to invest, mainly due to its profitability, growth prospects and low risk due to the equity support that having a safe asset such as a property implies.

The rooms of these houses in some cases are similar to hotel rooms

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

Venneri, expanded that “the venture 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, the same as in large tourist cities in other parts of the world) must be supported by schemes safe and flexible investment options to enter the business”.

As is often the case with attractive “fashionable” businesses, the offer is refined over time and “only those that meet these conditions remain in the right areas,” Venneri concluded.

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