While it is still being analyzed what will happen with the Rental Law and many contracts are about to be renewed, many tenants are considering moving to another place. What expenses do you have to take into account?
While it is still being analyzed what will happen to the Rental Law and many leases are about to be renewed, many tenants are considering moving elsewhere. In the current inflationary context, the biggest barrier to entry is the costs associated with the decision or need to move. So much so, that a recent report puts this problem under the magnifying glass and provides the necessary numbers for those who are about to take the next step.
“In the different cities of the country, the rental prices are different and their level of participation with respect to total household spending depends on the average income level of each place. The city of Buenos Aires is one of the localities with the best income, for which the rent represents less than a third of the average income of the porteños. However, in the City of Santa Fé or in General Roca in Río Negro they could reach 50% of the income,” indicated Damián Di Pace of Focus Market Consulting through an analysis with Naranja X.
An average Argentine family allocates around a third of its income (32.4%) to paying rent of a one-room apartment in CABA and almost half (47.1%) in Santa Fe, considering average total monthly income of $246,238 and $159,151, respectively. For this analysis, the total average family income of each urban agglomeration analyzed based on EPH-INDEC and adjusted by salary index was considered.
In the case of a Buenos Aires department of 2 environments, the average monthly price has a floor of $100,000. To the budget must be added other items: the ABL (lighting, sweeping and cleaning) and the expensewhich are borne by the tenant, as well as the services of water, electricity, and gas.
How much does it cost to rent in CABA?
The median of the studios offered in the Federal Capital is $85,000. The Minimum Vital and Mobile Salary, which in April is $80,342, covers 94.5% of a rent. This ratio, which had improved by mid-2022, was down almost 3 percentage points from April 2022.
The median of offers for two-room apartments is $105,000 and $155,000 for three-room apartments.
“Today the rental prices are very different. The market is made up of rental prices that were set at a very low value in the midst of the pandemic and with a new law and new contracts that come with price readjustments and less supply in the real estate market for housing rentals. In many cases they have left the offer to put it up for sale or allocate it to temporary rental” DiPace detailed.
And the moving costs?
According to the report, you have to collect $385,000 pesos to enter a studio apartment with a monthly rent of $90,000. This initial outlay includes:
- $90,000 one-time deposit
- $90,000 month in advance,
- $180,000 warranty expenses (guarantee insurance),
- $25,000 moving services (truck and two operators).
“Today, given the low supply of rental properties, attempts are being made to renew, even if it is at a higher price than expected due to the absence of a better substitute on the market. Only the moving expenses represent 3 or 4 months of rent according to the case. In turn, it is possible that if the tenant abandons the current rental home in an attempt to get a better price, they will not get a home or a price with a higher total cost of moving plus a new price updated due to inflation. concluded.