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Rental: The real estate business in which you earn despite having an unoccupied apartment - La Nacion Propiedades
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Alquiler: el negocio inmobiliario en el que ganás a pesar de tener el departamento desocupado
La forma de invertir en una propiedad y recibir una renta sin ocuparse nada y aún con el departamento vacío
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March 11, 2024
The way to invest in a property and receive an income without taking care of anything and even with an empty apartment
By Candela Contreras
The other side of temporary rental in which the investor does not worry about anything and always wins
What would happen if when thinking about investing in a rental property they told you that you shouldn't worry about whether it is occupied or not? There is a real estate business in which all owners who have units in the same development receive the same proportional income from their investment, regardless of whether their unit is rented or not . The model is called “ income pool ” and it is gaining more and more followers in the country.
“ The owner no longer earns for his unit punctually , but by contributing his unit to a group of apartments, he receives an income proportional to the total income of all the units minus the total expenses,” explains Marcos Villanueva, CEO of Waves . In Movement , a company specialized in the management and operation of real estate assets.
In this sense, according to the specialist, the main objective of the rental pool is to generate recurring income through the rental of these properties , with the purpose of providing a return to investors. “Instead of managing each property individually, investors participate in a diversified pool, which allows them to share risks and benefits,” adds the specialist. The distinctive feature of this proposal lies in the combination of three key elements:
- The possibility for the investor to free himself from the daily responsibilities of managing a property by delegating it to a specialized operator
- The flexible structure of the model that allows it to be adapted to different formats, such as the case of a single owner of the entire building or with multiple investors who contribute their units through a trust.
- The participation of a specialized operator that guarantees comprehensive management, ranging from administration, operational aspects and maximization of financial performance
The differences with temporary rental
One of the main differences that this model has with respect to a traditional temporary rental is that, the first case refers to the possibility of having recurring and stable income and greater efficiency in occupancy . “It facilitates financial planning for owners and investors, in contrast to the financial uncertainty associated with temporary rentals,” says the CEO of Waves In Movement.But also, it must be taken into account that unlike a common real estate investment for rent, the investor does not pay any additional expenses throughout the business nor is it required to be behind maintenance inconveniences, non-payment, eviction of a potential tenant. , among other eventualities.
Rental pooling is different from a temporary rental and is more like the hospitality of a hotel room.
However, given the doubts that may arise for those who are thinking of entering this type of business, here are the answers:
1) What happens if it is not rented?
In this type of system, nothing happens if it is not rented since the income does not depend on each unit but on all of them as a whole. It works like a hotel room, meaning that a monthly income is guaranteed for all owners.All income goes into a common pool and all expenses are deducted from there. Each unit is part of an integrated business and represents the same percentage of the business. Whether or not the unit you own is occupied, you will receive the corresponding share in relation to what each investor owns. The only difference in value logically is whether someone owns one, two or more units.
2) Can the property be sold while it is in a rental pool?
If you want to sell the property , there is no type of restriction . Each unit has its own deed, so all owners can sell with the only condition that the new buyer has to accept the same conditions under which the initial investor bought.3) Can I use the apartment for my vacation?
No, you cannot use the apartment for personal use or for any purpose other than rent pooling.4) What are the disadvantages of this model?
When an investor decides to enter an income pool , they should know that this business has some limitations, such as:- There is no flexibility regarding the personal use of the unit, except in some specific cases in which it is agreed in advance when purchasing the property, since it is intended for rental and managed by a third party.
- Lower short-term income potential, unlike a traditional temporary rental, since the latter can offer higher income for specific periods, such as tourist seasons.
- Less control over occupancy, since in the managed rental model occupancy is subject to the management of the specialized operator and long-term market conditions, while in temporary rentals, owners can have more direct control over occupancy in specific periods.
“The rental pool business is ideal for those looking for a refuge of value in bricks through a deedable property, in an area with high demand for both tourism and residential, with high quality sustainable construction standards and generating monthly profitability without taking care of anything. "adds Maria Gabriela Besuzzo, Interwin works and undertakings manager.
Real estate developments that promote a rental pool
In line with this investment model, there are different options throughout the country.In Mendoza you can buy a property in the Civit Avenue project that will require an investment of US$13 million. On a buildable plot of 13,000 m², 14 floors will be located with 92 two- and three-room apartments, ranging from 55 m² to 84 m², and a penthouse measuring 117 m² in height.
The value of the square meter on average is around US$3,200 and the estimated rent for rental units ranges between 7% to 9% annually in dollars , with an occupancy level of 60% . The development will begin construction in July of this year and will be completed in the final months of 2027.
The project in Mendoza requires an investment of US$13 million
Another case, but of an “uncommon income”, is reflected in a project in Nordelta , which was born with the aim of creating a place where residence, health, social life and contact with nature merge. With an investment of around US$30 million, Abrazia Senior Care will be built, a senior care center designed for a high-net-worth audience.
This center will combine, in its 14,000 square meters, residences for older adults with assistance needs , a rehabilitation institution and outpatient services. This business is estimated to leave an annual return of up to 14% in dollars for its investors. This figure is “higher than the 3% or 5% average rent left by the traditional rental of a 90-square-meter apartment in the area,” says Gustavo Lijtmaer, CEO of the developer that bears his last name.
Currently, it is in the pre-sale stage, and the 92 m² units are selling for US$205,000 . “The form of payment is through a 30% advance upon signing the agreement and the remaining balance in 30 installments in pesos, adjusted by the construction index (CAC),” says Martín Fabiani, the commercial director of the project that will begin. in June of this year and is expected to open its doors to the public in the second half of 2026.
It is the first project in Nordelta with these characteristics
This type of real estate business is also found in Patagonia . A clear example is the Añelo Nuevo project , in Añelo, close to the Vaca Muerta wells , which arises based on the demand for rental housing that allows companies to have their workers at a reasonable distance from their places of employment.
This development is built on a 15,412 m² plot of land: there are nine buildings with units ranging from 28 to 54 square meters. “ The rental pool in Añelo is a good business because the housing complexes have 100% occupancy as soon as they go on the market ,” says Leandro Soldati, partner at Soldati Properties.
In the real estate development that already has three buildings delivered and rented , while the rest will be delivered between the first half of 2024 and the first quarter of 2025, a property with a garage included can be purchased starting at US$71,600 for an apartment a 28 m² room ; a two-bedroom for US$89,000 and 38 m²; and a three-room apartment of 57 m² at US$146,000.
The expected profitability is 10% to 15%, with full occupancy. “It is expected that total occupation will be maintained for years and decades, due to the strong acceleration in the pace of exploitation of Vaca Muerta and the difficulty, slowness and cost of building in the area,” concludes Soldati.
The Añelo Nuevo project located in Vaca Muerta will have nine buildings
In this case, upon completion of construction, the units must be equipped with their respective furniture and appliances. The cost of equipment will depend on the size of the unit: US$4,900 for apartments with up to one bedroom and US$6,900 for larger ones.
The value of the equipment cost of the apartments starts at US$4,900 for those with up to one bedroom
Another similar business: the difference with the investor pool
Another way to participate in the pool business is to be an investor in a single property along with other people. In this case, an individual is not the sole owner of a property , but rather participates as a “share-owner” of it . As in the rental pool, this does not take care of the unit in terms of rental management but is in the hands of the administrator, who then distributes the profits based on each person's investment.“In this type of business there is not a single owner , there are many owners of the same property, who what they do is collect their share of the profit of that property monthly in proportion to the contribution they have made ,” explains Víctor Zabala, architect CEO and founder of Sumar Inversión.
A clear example of this method is found in Pilar, with two properties within Pilará Golf, Polo & Tennis, which cost around US$700,000 each , in which those who wish to participate can do so with tickets of US$100, with rents annually between 5% and 7% in dollars.
In this case, if a person invests US$1,000 , they will receive a monthly fee of US$4.17 ; If the investment amounts to US$10,000 , he will get US$41.70 ; and if he invests US$100,000 , the monthly rental amount he will receive will be US$417.
Pilará's Z01 and Z02 projects operate under the investor pool modality
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