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Hun73r, how do you get paid by your tenants in Argentina? Pesos? And im assuming you're not using a local bank account lol.
I get paid via paypal by the agency. I have a HSBC account I was depositing money into so the property manager woman could take out and pay bills but now I'm using xoom and she's picking it up. I think even with xoom she can only get pesos. if there was a way she could get dollars, that would be great, but I don't see a service that does that. Open to suggestions...
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This seems like a sweet setup in that you have a place to stay in Argentina that pays for itself.
Would you mind sharing some of the details like what kind of occupancy rate you get, what percentage does the management agency take, your income vs maintainer expenses?
It's pretty much always occupied and they do it month by month. THere may be a week or two it doesn't get rented but they are pretty good at keeping it filled because that's how they get paid. They send me $640 and they collect $1000 (wow just realized how big their cut is
I pay the lady across the hall $300 to do cleaning and pay the bills. So my net is $340/mo ($4080/yr).
It's a sweet setup in that I don't do anything all. I used to rent it myself on CL, vrbo airbnb and an make more money but it's a lot of hassle. But the negatives outweigh the positives and I wouldn't buy RE in a foreign country again. As I mentioned, it's not easy to sell. Argentina can change the laws about foreign owners or really do anything they want. And I had to pay cash for it ($90k) at the time.
In real estate, people talk about 'highest and best use' a lot in regards to buildings (self-explanatory as to what that means). So looking at the highest and best use of that $90k, I don't look at this as a good investment vs what else is out there in terms of passive income.
For example, I bought a multi-family building a couple of years ago for $125k (25% down payment). I raised rents, minor renovations and now the net income is $5k/month ($60k/yr) after expenses. I do have to pay the mortgage out of that so that brings it down to $39k total net plus debt service. But there are significant tax advantages with real estate (mortgage interest write-off, vacations, car expenses and building depreciation) so that ups the true net in the high 40's. Also the tenants are paying off the building so in 8 years that will be a 600k asset they paid off.
So for me, I'd rather have the $90k from the BsAs building and put it down on another US based building and net $3-4k a month from it vs. $340.