Buenos Aires Renovated Apartments
Many property buyers in Buenos Aires like to take part in renovating apartments, whether it be for the sake of 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 valuable again.
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 quite complicated and run deep into the apartment. However, dry-surface changes can be not only cheaper, but 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.
Many investors act as serial renovators: buying, renovating, and selling. And for most, it makes 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 at about 500 USD.
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 to no 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 regards 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 a variety of 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 stumbled upon 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.
Other costs include submitting municipal plans (around $7000), and the notice of work (about $1800). Without plans and projects costs, the materials and labor will typically run about U$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 are the most successful; other areas don’t see such success.
Source: La Nacion - Reciclado (March 2010)
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