The offer of temporary rentals is growing to take advantage of the tourist boom

In neighborhoods where rents are more in demand, landlords find a more tempting vein to get more profit from their properties: They remove them from the traditional system and offer them as temporary rentals which are charged in dollars and have a much higher rent. The transfer – also on the rise due to the growing tourist influx due to the exchange rate advantage – has an impact on the traditional offer of the localities because it reduces supply, which is already scarce, and increases prices.

“After the pandemic, says Oscar Garay, head of revenue management at Grid SA,“ there has been a significant turnaround in the business with growing demand. Many homeowners have seized the moment and decided to take an alternative route and rent out their short-term rental property so as not to get involved in the disadvantageous provisions of a permanent lease“, To explain.

According to Fernando Cueto, commercial director of the developer Qubo, “the boom in temporary leases basically occurs because they are much more flexible contracts than traditional rents. They can be renewed every three months up to four consecutive times and this makes the inflation that exists in Argentina can be followed in a real and timely way, so it is interesting for both the person renting and the owner of the property, ”he describes.

“For the renter, they have much simpler entry barriers. No guarantees or payment months in advance are required. It’s just the monthly rent. And as for the owners, they don’t have to be tied to a three-year contract as the law dictates today. For the landlord it is attractive because it achieves much higher rates of return than traditional rent.

Renting is more attractive

Solange Esseiva, owner of the H-54 real estate agency, adds that, in this way, “the owner of a studio apartment in Recoleta” can obtain a monthly income of 600 US dollars (180 thousand dollars), in dollars. On the other hand, if you choose to rent it the traditional way, you can get around $ 100,000, “she compared her.

According to Esseiva, who knows how to manage temporary rentals well can get a return from the unit of about 5% per year in dollars“Even in the city of Buenos Aires, in high season, properties can double this value”, because prices vary according to the time of year and the number of nights. “The fewer days, the more expensive it can be charged,” she exemplified.

Another important factor affecting the rate, according to marketers, is whether the building offers a coworking area; which is in great demand by foreign professionals; swimming pool and SUM, which are the most sought after services by tourists; or spaces for storing bicycles, which is the means of transport usually used by students who come to do a master’s or post-graduate degree. According to Garay, many families also come, especially from neighboring countries such as Uruguay and Chile.

During the winter holidays, for example, the demand for these rents grew by 21.3% compared to the same period last year, according to a survey by the Mercado Libre.

However, according to Cueto, “in Argentina, temporary rentals are not designed so much for tourism for four or five days, but rather for one, two or three months, which correspond more to domestic tourism. This makes the vacancy rate of the units low, which makes it very attractive ”.

The trend in temporary rents develops to such an extent that, for example, the Despegar travel platform has just added them to its proposal. According to several studies, the online vacation rental market is estimated to grow by 40% between 2019 and 2024, reaching 17% of all accommodations.

“The place you stay while traveling has taken on a huge role in recent times,” said Ivan Marenco, Vacation Rentals VP of Grupo Despegar. Therefore, the company also bought Stays.net in Brazil as a reflection of its commitment in this segment.

Furnished and without guarantee, the reverse

The downside of the temporary rentalaccording to the intermediary Oscar Puebla is that “the property must be fully furnished and there are no guarantees“. “The contracts are for three months, many owners intend to pay the bill, but this is only possible for a tourist and not for a salary worker in pesos,” she says. Furthermore, according to the entrepreneur, “those properties that are located in the tourist corridor can only be temporarily rented: San Telmo, Centro, Puerto Madero, North District; Recoleta, Palermo and Belgrano.

As for prices, in Puerto Madero, for example, a three-bedroom apartment costs $ 1,200 per month or $ 65 per night. And in San Telmo, a one bedroom apartment for US $ 700 or US $ 40 a night. “The average occupation is 20 days a month, according to Puebla. In Palermo Hollywood, according to Garay, on weekdays (Monday to Thursday) in August the average price for an equipped apartment for four people is about $ 16,000 per night. And, on weekends in the $ 24,000.