97% of Argentine owners would reinvest in real estate in Montevideo

RIO DE JANEIRO, BRAZIL – Currently, 97.4% of these foreign owners are “very pleased with their investment,” and would invest again.

The recovery of investment is key to reinvesting and reacquiring a property in Montevideo, the report explains.

“For instance, a property under construction is 20% cheaper than what it would cost once completed. During 10 years, with tax exemptions, once the property has been released and leased, 80% of the invested capital can be recovered. And the sale value of the property after a couple of years has increased by at least 10%. In short, after 10 years of leasing, it is possible to recover the whole invested capital, if one decides to sell the unit,” the report says.

The survey interviewed over 300 Argentine property owners in Montevideo, as well as clients interested in investing in Uruguay, between June 2021 and the early days of November 2021.

The surveyed owners are property owners of more than 25 different buildings, mainly in the neighborhoods of Centro, Cordón and Pocitos. The majority of potential investors are from Buenos Aires, Córdoba, Santa Fe, Rosario and Mar del Plata.

In addition, none of the individuals and families surveyed are considering selling their property in Uruguay to invest in Buenos Aires, at least in the coming 3 years.

REASONS TO INVEST

These investors prefer to buy property on plan, because they pay for it in installments, which allows them to access more m2 and, eventually, a garage. The purpose of the property is mostly for rent, with a very low percentage of buyers acquiring it to live in, explains the real estate consulting firm.

The people interviewed highlighted that yield value – almost 6% on average – is one of the main reasons that lead them to invest in Montevideo.

They also value the advice of a reliable real estate company that also provides property management services. They also understand that the Montevideo leasing market is mature, the vacancy of leasing units is minimal.

Another significant factor for those who intend to rent their property is that guarantees are safe, highlighting the role of insurance companies that offer the service of guaranteeing the lease, while ensuring zero default on rent and expenses, in case of tenant arrears, the report says.

The dynamism of business transactions did not decline during the pandemic and increased since the reopening of borders for residents and tourists. Argentine investors tripled the average purchase of real estate in Montevideo as of August last year and totaled 89 property reservations by November.

“Talking to them about tax exemptions is a qualitative change in their mind, it awakens a feeling of achievement, it totally changes their idea of a potential investment into an almost certain investment and in Housing Developed areas. And most of all, they do not want to invest in Argentina,” stated Moebius director Gonzalo Martínez Vargas.