Buying to rent: Less developed areas in GBA North offer better margins than prime locations

For real estate investors in Argentina's Buenos Aires Greater Area (GBA) North, the most expensive neighborhoods do not always guarantee the highest profit margins. Data reveals that less consolidated areas, despite lower property values, are currently offering superior returns on investment compared to prime locations.

In June, the national average for the ratio between rental price and property sale value stood at 6.12% gross annually, suggesting an average recovery period of about 16.3 years for property purchases through rent. This figure represents a 10% decrease from the previous year, indicating a widening gap between sale prices and rental income growth across the region.

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When you buy a property with a focus on location, you always pay more because land costs are higher. It's logical. It's also worth clarifying that both markets target very different segments of demand.

José C. Paz Centro has emerged as the top investment spot, boasting a 9.1% gross annual return. This significantly outperforms Nordelta, one of GBA North's most exclusive districts, which offers a 4.4% return and ranks among the lowest. The primary driver for José C. Paz Centro's high yield is its lower entry cost. While Nordelta attracts investors seeking a "safe market" with property value appreciation, José C. Paz offers higher profitability due to cheaper real estate, despite potentially lower rental amounts.

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One is ABC1 and the decision to invest in a 'safe market' with the certainty that the property will not devalue and will even revalue. While the José C. Paz market is more unpredictable, although there is demand for rent, the contracts are lower but the profitability is higher because the properties are cheaper.