The Investment U E-Letter: Issue # 592
Thursday, October 11, 2006 Real Estate In Argentina: Pocket 25% A Year… While “Supplies” Last
by Barb Perriello, Real Asset Expert, Investment U Editor’s Note: Barbara Perriello is one of the most well traveled real estate experts in the country… For nearly two decades, she’s been escorting small groups of investors and adventurers to Nicaragua, Honduras, Belize, China and Iceland, among other places… And her on-the-ground expertise is invaluable for anyone investing in overseas real estate markets. Today, she looks at real estate in Argentina, where investors are flocking, and why you may want to think about doing the same…
As the U.S. real estate market cools, more and more investors are looking overseas to find the best property deals – as a primary residence, a vacation home, or simply for rental income and capital appreciation. And right now, Argentina is one of their top destinations…
I've traveled to Argentina three or four times a year for the past five years - sometimes on my own and sometimes escorting small groups of adventurers – and I've never met a single traveler who didn't fall in love with this beguiling nation. And not only is it varied, beautiful and sophisticated, it’s remarkably undervalued. The country is experiencing a steady recovery after the crisis in 2002. The economy is among the fastest growing in the world, expanding at a rate of 8.6% over the past 12 months. And its real estate market offers tremendous upside. In fact, there are (at least) four smart ways you can take advantage of your purchasing power in Argentina today as the economic recovery continues – for a substantial return on your investment… 1. Stake Your Claim In the Buenos Aires Apartment Boom Buenos Aires is a vibrant city, which has a sophisticated, genteel Latin flair, but is as cosmopolitan as New York or Paris. Large boulevards, expansive parks and plazas, tall trees… it's a walking city with an aristocratic European feel. Here, people use all the community green space. Stroll through a park, and you'll see people reading, picnicking, talking and dancing the tango. In some of the neighborhoods I’ve been to, properties are appreciating anywhere from 10% to 25% a year. In upper-crust Recoleta, for example, you can find a luxury rental for just US$124,000. It's a one-bedroom, one-bath apartment completely renovated in 2005. In historic Barracas, you can own a loft in a restored building for just US$63,000 – and that includes private parking, access to a heated pool, a gym, a spa and private green space. 2. Use Argentina Real Estate to Cash In On China's Demand for Lumber Stumpage prices for timber in Argentina have tripled in the past five years, in terms of U.S. dollars. Hardwood grows nearly 65% faster here than in the U.S., and after harvesting, it re-sprouts on its own. Meanwhile, China's demand for wood has grown 400% over the past five years – it has trouble finding enough pulp to meet its toilet-paper needs alone. China now looks to Argentina for all its paper needs, and there's a fortune to be made. You can capitalize on this opportunity in the region of Misiones, for instance, at the La Negra Forestry Trust project. There you can own lakefront property where you could build your dream home, and at the same time, you get forested land with your purchase – land that is managed for you and, upon harvest, is projected to yield healthy returns. 3. Own A Napa Valley-Like Vineyard for Pennies On the Dollar Argentina's vineyards are winning accolades around the world. Its wine exports to the U.S. are up more than 50% over the past five years, plus producers are making inroads into European markets, as well. Many of the best labels are just now appearing abroad. And so you can still get in at the ground floor in the best grape-growing terroir region in the country. If you're interested in vineyard land, you can own that at a fraction of what you'd pay in Napa Valley, where you'd have to come up with millions. 4. Patagonia's Playground – Think Aspen, Only Priced Like Rural Kansas Bariloche is to Argentina what St. Moritz is to Switzerland or Aspen is the U.S. From June through September, this upscale ski resort is the place to see and be seen. But it's just as nice in the off-season when visitors come to hike, fish, sail, ride horses, swim and sun. Bariloche was founded in 1895 by German-Swiss settlers and still retains an Alpine flavor... chalet-style buildings with flower-filled window boxes... chocolate factories and fondue restaurants. Yet here, despite the high-collar zip code, you can still own property for less than $100,000, much less than Lake Tahoe or Aspen… and that at the Arelauquen Country Club. This is a high-end retreat by any starlet's standards, with a golf course, polo club, marina, pools, five restaurants and more. The real estate value you'll find today in Argentina will impress you. But what will strike you as just as attractive – perhaps more so – is how unabashedly beautiful, welcoming, invigorating, and comfortable a place it is to spend time. It's a nice combination, when you think about it – an investment that’s good for your wallet and your heart. Good investing, Barbara Perriello Today’s Investment U Crib Sheet - "The Invisible Real Estate Crash…" Find out just how much U.S. prices have gone up in the past 10 years – and the seven unusual reasons for the "irrational exuberance."
Related Articles Investment U Archives 
| 
