How to go about renovating apartments in BUENOS AIRES with its very weak currency
History in Argentina repeats. It is now a bargain once again to renovate apartments. Although this article was written in 2013, apart from the numbers, it is still relevant today.
Many property buyers in Buenos Aires like to take part in renovating apartments, whether it be for making a place truly their own or for, renting the unit out or reselling it to make a profit. And what does it mean to renovate an apartment? Typically, it is to capture the original style of the apartment and preserve it while adapting it to modern demands. In addition, it is to renew its interior condition, making it more valuable.
There are basically two different ways to go about considering the idea. The first is as your own space, converted for you. The second is from a commercial standpoint. Since the property will be renovated, the structural characteristics make the biggest impact on price, including location, building quality, views, light and the floor it’s on.
The areas within the unit to be redone are also greatly related to the renovation costs. The bathroom and kitchen are considered the most expensive, as the plumbing can get complicated and run deep into the apartment. However, dry-surface changes can be cheaper and easier to execute, such as painting the walls, changing the flooring, or replacing any woodwork.
In addition, the wet-surface changes necessary in the bathroom or kitchen require more expensive materials, such as ceramics, marble or porcelain, as well as more expensive finishes, as any coatings have to withstand heat, humidity and grease. The cost of fixtures and faucets, as well as major appliances, can also have a great impact on the renovation costs.
The average construction cost for an apartment renovation ranges between 600 USD and 700 per m2, * but that, of course, depends on the areas to be renovated. Any wet-surface renovation will generally need an allowance of about 25,000 pesos*. ( please note these numbers were relevant in 2013 when this article was first written, but now, due to the very large gap between the USD and the informal peso have changed for the better considerably )
Many investors act as serial renovators: buying, renovating and selling. And for most, it does a good business, with a reasonable profitability. Between 2002 and 2006, there was a great rush to renovate, as prices were at an all-time low, and construction cost was about 500 USD. ( please note these numbers were relevant in 2013 when this article was first written, but now, due to the very large gap between the USD and the informal peso have changed for the better considerably )
Several key points are important to keep in mind when renovating commercially. First, it is a small investment with a relatively quick return that can be done with little professional capacity. And as long as there is a market for apartments to be renovated, it continues to be a rather low-risk investment. Above all, once a property is purchased, it is a good way to hold the money, even if the construction does take some time. Furthermore, construction costs have lowered in recent years, or at least slowed down considerably in regard to inflation.
Returns from renovated apartments can be around 30% or so. The most important is that the apartment is in a desirable location so that once the unit itself is sellable, so is the surrounding area.
It is important to remember that the apartment will not be for personal use. Many investors may wish to cater to their own personal style and taste, but it is important to keep the end user in mind designing for various potential buyers.
When renovating, it is important to start with a comprehensive survey and a plan, so problems can be anticipated and solved immediately and no surprises are encountered during construction.
The fee for the plans, pricing and idea of renovation varies depending on the size of the unit. Anything up to 50 m2 will typically cost $2300 pesos. 50 to 90 m2 runs about $4200, and more than 90 m2 is around $5500. ( please note these numbers were relevant in 2013 when this article was first written, but now, due to the very large gap between the USD and the informal peso have changed for the better considerably )
Other costs include submitting municipal plans (around $7000), and the notice of work (about $1800). Without plans and project costs, the materials and labour will typically run about U$D 300 per m2. And again, the most important thing to remember is the location will have a huge effect on the final selling price. Typically, Belgrano, Recoleta and Barrio Norte, San Telmo and Palermo are the most successful; other areas don’t see such success.
Talk to us for the latest numbers for costs before and after a renovation.
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