Housing market situation

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at46
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Re: Housing market situation

Post by at46 » Wed Nov 21, 2018 4:51 pm

Julito wrote:
Wed Nov 21, 2018 10:44 am
I was talking to a woman a few weeks ago who for years has had a hotel and cabanas just outside Pucon. She was saying they'd had many good years up until recently when all the new apartments started coming online. Alot of new owners throw them out on AirBnb and it's been affecting them. Personally I see AirBnb effect as a race to the bottom on pricing with so many new apartments now available.
It'll be interesting to watch what happens when all these new owners discover the pittance they'll be getting in returns along with poor capital gains due to the many more apartments still under construction yet to hit the market. I watched it happen years ago in another tourist destination and the outcome is not pretty.
Pucon really is becoming over developed, it's an absolute zoo in February. But they keep on piling into the property market there.
Yeah, Chileans' love of trendy businesses has played an evil joke on them with Airbnb. And also revealed things about them they're unable to process - like that they're terrible hosts and dirty people. The majority of the Airbnb hosts in Santiago, anyway. So the bookings go to the highly rated apartments, which are few and far between, while the rest languish for a year or so before being converted to unfurnished long-term rentals. Lucky for them, there's still good demand for those here what with all the immigration, and the rent probably covers the mortgage or most of it.

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41southchile
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Re: Housing market situation

Post by 41southchile » Wed Nov 21, 2018 5:33 pm

at46 wrote:
Wed Nov 21, 2018 4:51 pm
Julito wrote:
Wed Nov 21, 2018 10:44 am
I was talking to a woman a few weeks ago who for years has had a hotel and cabanas just outside Pucon. She was saying they'd had many good years up until recently when all the new apartments started coming online. Alot of new owners throw them out on AirBnb and it's been affecting them. Personally I see AirBnb effect as a race to the bottom on pricing with so many new apartments now available.
It'll be interesting to watch what happens when all these new owners discover the pittance they'll be getting in returns along with poor capital gains due to the many more apartments still under construction yet to hit the market. I watched it happen years ago in another tourist destination and the outcome is not pretty.
Pucon really is becoming over developed, it's an absolute zoo in February. But they keep on piling into the property market there.
Yeah, Chileans' love of trendy businesses has played an evil joke on them with Airbnb. And also revealed things about them they're unable to process - like that they're terrible hosts and dirty people. The majority of the Airbnb hosts in Santiago, anyway. So the bookings go to the highly rated apartments, which are few and far between, while the rest languish for a year or so before being converted to unfurnished long-term rentals. Lucky for them, there's still good demand for those here what with all the immigration, and the rent probably covers the mortgage or most of it.
I can't see Airbnb working for someone who buys say a one bedroom appartment in Puerto Varas for example.
They are advertised between 40 and 60k a night, a cheap appartment in PV would be 70 million, closer to 80 probably. Occupancy rates would be what 30 to 40 percent? With interest costs, gastos comunes, insurance, utilities, cleaner etc, unless the plan is to bet on capital gains or to make a loss to offset something else. Something doesn't really add up it's not exactly a fantastic investment.
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at46
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Re: Housing market situation

Post by at46 » Wed Nov 21, 2018 8:14 pm

41southchile wrote:
Wed Nov 21, 2018 5:33 pm
at46 wrote:
Wed Nov 21, 2018 4:51 pm
Julito wrote:
Wed Nov 21, 2018 10:44 am
I was talking to a woman a few weeks ago who for years has had a hotel and cabanas just outside Pucon. She was saying they'd had many good years up until recently when all the new apartments started coming online. Alot of new owners throw them out on AirBnb and it's been affecting them. Personally I see AirBnb effect as a race to the bottom on pricing with so many new apartments now available.
It'll be interesting to watch what happens when all these new owners discover the pittance they'll be getting in returns along with poor capital gains due to the many more apartments still under construction yet to hit the market. I watched it happen years ago in another tourist destination and the outcome is not pretty.
Pucon really is becoming over developed, it's an absolute zoo in February. But they keep on piling into the property market there.
Yeah, Chileans' love of trendy businesses has played an evil joke on them with Airbnb. And also revealed things about them they're unable to process - like that they're terrible hosts and dirty people. The majority of the Airbnb hosts in Santiago, anyway. So the bookings go to the highly rated apartments, which are few and far between, while the rest languish for a year or so before being converted to unfurnished long-term rentals. Lucky for them, there's still good demand for those here what with all the immigration, and the rent probably covers the mortgage or most of it.
I can't see Airbnb working for someone who buys say a one bedroom appartment in Puerto Varas for example.
They are advertised between 40 and 60k a night, a cheap appartment in PV would be 70 million, closer to 80 probably. Occupancy rates would be what 30 to 40 percent? With interest costs, gastos comunes, insurance, utilities, cleaner etc, unless the plan is to bet on capital gains or to make a loss to offset something else. Something doesn't really add up it's not exactly a fantastic investment.
I totally agree. But, say, 4 or 5 years ago the earnings used to be pretty good (in a good Santiago location anyway) because of the small number of furnished apartments at that time managed by English-speaking people. Airbnb was still new, Chilean landlords were really inflexible about the papers etc., and Chile was just starting to attract the younger international computer savvy crowd. Of course, the Argies brought in a lot of money that one year when their currency controls were lifted. Then there was a good number of Brazilians for about a year or two. But now it's pretty slow and the furnished market has shrunk around the very best locations.

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Re: Housing market situation

Post by admin » Thu Nov 22, 2018 7:09 am

i dont know. the airbnb is probably not too bad of a return.

say you have a house or apartment in a high demand area. if it is not, your airbnb biz is not going to do well anyway. you pribably get at least 10 to 15% a year in apreciation. if you can get even probably one two airbnb a year, you have covered cost of ownership such as community expenses, property tax, etc. a few more a year, and you are covering the interest payment on the mortgage. a few more a year and you are covering the mortgage payments. especialy the last few years with historicaly low interest rates. cost of ownership can get close to zero with just few bookings a year, which probably gives a better return than a full yearly rental with rents running pretty close to mortgage payments or even a bit below.

the numbers are probably even better for anykne that owns their property outright, or at least has so.e substantial equity built up in their property.

i would never do it. too much of a hassel, but i can see why it would be popular.
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Re: Housing market situation

Post by admin » Thu Nov 22, 2018 9:39 am

so funny story i just was told.

my wife and i rent an apartment in los condes, near the golf course. we use it perhaps on average 10 days a month depending on the flow of work and other things, or just passing through santiago on the way to somewhere else. we lend it out to friends and family that live in the south when they need to go to santiago. sort of our own apart hotel in santiago.

so the owner told us she was going to sell it. she offered it to us at like 140 million pesos. gave it some thought, but just can not bring myself to buy one of those concreate coffines, when i know there is perhaps 10 to 20 million pesos of materials in a 1 bedroom apartment. i also got a bunch of issues with the apartment. fine for few days a month, dont want to buy the problems. we were kicking around the idea of renting something closer to our office anyway. not like we HAVE to have thst apartment because for instance we got kids in school or something.

so she put it on the market. guess how long it lasted?

sold in 2 weeks, to someone looking for investment property.

The new owner was estatic to have good renters already in the place (we are hardly there, pay our rent on time, and have made improvments on the place) and has offered us a new contract for as long we want to stay. still debating renting something a bit bigger and closer yo our office. we can make up the diffrence in taxi rides, but for moment dont want to deal with hassel of moving.
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Re: Housing market situation

Post by 41southchile » Thu Nov 22, 2018 3:13 pm

admin wrote:
Thu Nov 22, 2018 7:09 am
i dont know. the airbnb is probably not too bad of a return.

say you have a house or apartment in a high demand area. if it is not, your airbnb biz is not going to do well anyway. you pribably get at least 10 to 15% a year in apreciation. if you can get even probably one two airbnb a year, you have covered cost of ownership such as community expenses, property tax, etc. a few more a year, and you are covering the interest payment on the mortgage. a few more a year and you are covering the mortgage payments. especialy the last few years with historicaly low interest rates. cost of ownership can get close to zero with just few bookings a year, which probably gives a better return than a full yearly rental with rents running pretty close to mortgage payments or even a bit below.

the numbers are probably even better for anykne that owns their property outright, or at least has so.e substantial equity built up in their property.

i would never do it. too much of a hassel, but i can see why it would be popular.
Let's say I have 80 million sitting around so I dont need a mortgage and I buy one bedroom appartment in Puerto Varas let's assume that includes furnishing, everything I need to rent it out. I can rent it for 50000 pesos a night.
Over the summer I can probably rent it out nearly every day, but the rest of the year, it will be harder and there is so much supply , so let's say it was rented out 35 percent of the time as an average over the year, that's 11 nights a month. 550000 gross, I have to pay gastos comunes of say 50000, insurance probably the same, a cleaner after each guest if I dont want to do myself, that's 110000, power and internet say 50000, that's leaving me aprox 290000 PM, or 3.48 million a year, so its probably giving me 4.35 percent on my freehold appartment . I haven't included guests stealing stuff, replacement linen etc, gas heating costs etc, my time spent receiving guests and looking after the place .
So while it's not a terrible return if its freehold, its certainly not great either for the effort and if I have to take a mortgage out I'm probably barely making a return, I am just banking on making capital gains, but the number of apartments is increasing every year increasing supply so what's my used appartment going to be worth in 10 years time?
I honestly can not see prices increasing at the rate they have been in the last 5 years. The time for investing in apartments was 5 years ago, I think. I may he wrong in my assumptions and I guess they are best guess estimates on occupancy rates based on what I've heard and read etc. Either I am wrong or the market will continue on its illogical path and in 2023 I'll be saying why the hell didn't I buy an appartment in 2018? but looking at whats happening to real estate globally at the moment there could be a few bargains in the next few years for apartments in Chile.
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Re: Housing market situation

Post by at46 » Thu Nov 22, 2018 3:15 pm

admin wrote:
Thu Nov 22, 2018 7:09 am
i dont know. the airbnb is probably not too bad of a return.

say you have a house or apartment in a high demand area. if it is not, your airbnb biz is not going to do well anyway. you pribably get at least 10 to 15% a year in apreciation. if you can get even probably one two airbnb a year, you have covered cost of ownership such as community expenses, property tax, etc. a few more a year, and you are covering the interest payment on the mortgage. a few more a year and you are covering the mortgage payments. especialy the last few years with historicaly low interest rates. cost of ownership can get close to zero with just few bookings a year, which probably gives a better return than a full yearly rental with rents running pretty close to mortgage payments or even a bit below.

the numbers are probably even better for anykne that owns their property outright, or at least has so.e substantial equity built up in their property.

i would never do it. too much of a hassel, but i can see why it would be popular.
If the purchase price is around 2200-2400 UF, as it is in the Centro around Bellas Artes, and Airbnb with superhosts starts at 20 mil these days, you need to rent it out for 18-22 days just to cover the mortgage, GGCC and utilities.

Average occupancy used to be around 22 days back when I looked at it a few years ago. You could get a bit more if you really pushed it, but it´s a lot of hassle, as you correctly pointed out, and you´d still not be able to get to 365 days a year if you wanted to have a life and not just prove a point.

At the same time you can get it rented out unfurnished for around 290-310 ano corrido and get all or most of your mortgage covered that way while the renter pays the gastos and utilities.

Appreciation is the same in both cases.

So, to me, renting it unfurnished is a no brainer, and I think that's what Chilean Airbnb superhost wannabes have started to realize in the last year or so.

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Re: Housing market situation

Post by 41southchile » Thu Nov 22, 2018 3:27 pm

at46 wrote:
Thu Nov 22, 2018 3:15 pm
admin wrote:
Thu Nov 22, 2018 7:09 am
i dont know. the airbnb is probably not too bad of a return.

say you have a house or apartment in a high demand area. if it is not, your airbnb biz is not going to do well anyway. you pribably get at least 10 to 15% a year in apreciation. if you can get even probably one two airbnb a year, you have covered cost of ownership such as community expenses, property tax, etc. a few more a year, and you are covering the interest payment on the mortgage. a few more a year and you are covering the mortgage payments. especialy the last few years with historicaly low interest rates. cost of ownership can get close to zero with just few bookings a year, which probably gives a better return than a full yearly rental with rents running pretty close to mortgage payments or even a bit below.

the numbers are probably even better for anykne that owns their property outright, or at least has so.e substantial equity built up in their property.

i would never do it. too much of a hassel, but i can see why it would be popular.
If the purchase price is around 2200-2400 UF, as it is in the Centro around Bellas Artes, and Airbnb with superhosts starts at 20 mil these days, you need to rent it out for 18-22 days just to cover the mortgage, GGCC and utilities.

Average occupancy used to be around 22 days back when I looked at it a few years ago. You could get a bit more if you really pushed it, but it´s a lot of hassle, as you correctly pointed out, and you´d still not be able to get to 365 days a year if you wanted to have a life and not just prove a point.

At the same time you can get it rented out unfurnished for around 290-310 ano corrido and get all or most of your mortgage covered that way while the renter pays the gastos and utilities.

Appreciation is the same in both cases.

So, to me, renting it unfurnished is a no brainer, and I think that's what Chilean Airbnb superhost wannabes have started to realize in the last year or so.
Exactly, you are getting roughly the same rate Airbnb as a full time renter, Airbnb is a lot of work and commitment , año corrido is definitely a no brainer now days. Like everything in Chile, everyone has jumped in thinking it's a fantastic idea and that is depressing returns for everyone, happens with everything here.
The early Airbnb apartment owners have probably cashed out and banked their cap gains they are probably already out of that game and have found something else to invest in while the followers are wondering what they have got themselves into.
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Re: Housing market situation

Post by 41southchile » Thu Nov 22, 2018 10:30 pm

41southchile wrote:
Thu Nov 22, 2018 3:13 pm
admin wrote:
Thu Nov 22, 2018 7:09 am
i dont know. the airbnb is probably not too bad of a return.

say you have a house or apartment in a high demand area. if it is not, your airbnb biz is not going to do well anyway. you pribably get at least 10 to 15% a year in apreciation. if you can get even probably one two airbnb a year, you have covered cost of ownership such as community expenses, property tax, etc. a few more a year, and you are covering the interest payment on the mortgage. a few more a year and you are covering the mortgage payments. especialy the last few years with historicaly low interest rates. cost of ownership can get close to zero with just few bookings a year, which probably gives a better return than a full yearly rental with rents running pretty close to mortgage payments or even a bit below.

the numbers are probably even better for anykne that owns their property outright, or at least has so.e substantial equity built up in their property.

i would never do it. too much of a hassel, but i can see why it would be popular.
Let's say I have 80 million sitting around so I dont need a mortgage and I buy one bedroom appartment in Puerto Varas let's assume that includes furnishing, everything I need to rent it out. I can rent it for 50000 pesos a night.
Over the summer I can probably rent it out nearly every day, but the rest of the year, it will be harder and there is so much supply , so let's say it was rented out 35 percent of the time as an average over the year, that's 11 nights a month. 550000 gross, I have to pay gastos comunes of say 50000, insurance probably the same, a cleaner after each guest if I dont want to do myself, that's 110000, power and internet say 50000, that's leaving me aprox 290000 PM, or 3.48 million a year, so its probably giving me 4.35 percent on my freehold appartment . I haven't included guests stealing stuff, replacement linen etc, gas heating costs etc, my time spent receiving guests and looking after the place .
So while it's not a terrible return if its freehold, its certainly not great either for the effort and if I have to take a mortgage out I'm probably barely making a return, I am just banking on making capital gains, but the number of apartments is increasing every year increasing supply so what's my used appartment going to be worth in 10 years time?
I honestly can not see prices increasing at the rate they have been in the last 5 years. The time for investing in apartments was 5 years ago, I think. I may he wrong in my assumptions and I guess they are best guess estimates on occupancy rates based on what I've heard and read etc. Either I am wrong or the market will continue on its illogical path and in 2023 I'll be saying why the hell didn't I buy an appartment in 2018? but looking at whats happening to real estate globally at the moment there could be a few bargains in the next few years for apartments in Chile.
Actually my rent out figures were too high and my purchase price too low it seems, so the return is even shittier than what I had above. Rental now is about 20 to 40k per night according to Airbnb and purchase is north of 3300UF, so closer to 90 million. So I might be making 2 percent on my theoretical 50sqm freehold appartment but for a lot of work in, I better be making an amazing cap gain, otherwise I'll stick my imaginary 90 million in a shitty term deposit for now that also barely covers inflation, but I dont have to do anything and have time to dedicate to other ideas.
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Re: Housing market situation

Post by at46 » Fri Nov 23, 2018 9:33 am

41southchile wrote:
Thu Nov 22, 2018 10:30 pm
41southchile wrote:
Thu Nov 22, 2018 3:13 pm
admin wrote:
Thu Nov 22, 2018 7:09 am
i dont know. the airbnb is probably not too bad of a return.

say you have a house or apartment in a high demand area. if it is not, your airbnb biz is not going to do well anyway. you pribably get at least 10 to 15% a year in apreciation. if you can get even probably one two airbnb a year, you have covered cost of ownership such as community expenses, property tax, etc. a few more a year, and you are covering the interest payment on the mortgage. a few more a year and you are covering the mortgage payments. especialy the last few years with historicaly low interest rates. cost of ownership can get close to zero with just few bookings a year, which probably gives a better return than a full yearly rental with rents running pretty close to mortgage payments or even a bit below.

the numbers are probably even better for anykne that owns their property outright, or at least has so.e substantial equity built up in their property.

i would never do it. too much of a hassel, but i can see why it would be popular.
Let's say I have 80 million sitting around so I dont need a mortgage and I buy one bedroom appartment in Puerto Varas let's assume that includes furnishing, everything I need to rent it out. I can rent it for 50000 pesos a night.
Over the summer I can probably rent it out nearly every day, but the rest of the year, it will be harder and there is so much supply , so let's say it was rented out 35 percent of the time as an average over the year, that's 11 nights a month. 550000 gross, I have to pay gastos comunes of say 50000, insurance probably the same, a cleaner after each guest if I dont want to do myself, that's 110000, power and internet say 50000, that's leaving me aprox 290000 PM, or 3.48 million a year, so its probably giving me 4.35 percent on my freehold appartment . I haven't included guests stealing stuff, replacement linen etc, gas heating costs etc, my time spent receiving guests and looking after the place .
So while it's not a terrible return if its freehold, its certainly not great either for the effort and if I have to take a mortgage out I'm probably barely making a return, I am just banking on making capital gains, but the number of apartments is increasing every year increasing supply so what's my used appartment going to be worth in 10 years time?
I honestly can not see prices increasing at the rate they have been in the last 5 years. The time for investing in apartments was 5 years ago, I think. I may he wrong in my assumptions and I guess they are best guess estimates on occupancy rates based on what I've heard and read etc. Either I am wrong or the market will continue on its illogical path and in 2023 I'll be saying why the hell didn't I buy an appartment in 2018? but looking at whats happening to real estate globally at the moment there could be a few bargains in the next few years for apartments in Chile.
Actually my rent out figures were too high and my purchase price too low it seems, so the return is even shittier than what I had above. Rental now is about 20 to 40k per night according to Airbnb and purchase is north of 3300UF, so closer to 90 million. So I might be making 2 percent on my theoretical 50sqm freehold appartment but for a lot of work in, I better be making an amazing cap gain, otherwise I'll stick my imaginary 90 million in a shitty term deposit for now that also barely covers inflation, but I dont have to do anything and have time to dedicate to other ideas.
One thing that's not so good about the term deposit idea is that the lack of attractive investment options reveals excessive monetary stimulus that stopped working. If the trend continues, we're facing inflation that may not only bite a piece out of your deposit but destroy it completely should things really get out of hand. If they do, you'll pat yourself on the back for owning a concrete apartment in a high demand area.

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Re: Housing market situation

Post by 41southchile » Sat Nov 24, 2018 11:08 am

at46 wrote:
Fri Nov 23, 2018 9:33 am
41southchile wrote:
Thu Nov 22, 2018 10:30 pm
41southchile wrote:
Thu Nov 22, 2018 3:13 pm
admin wrote:
Thu Nov 22, 2018 7:09 am
i dont know. the airbnb is probably not too bad of a return.

say you have a house or apartment in a high demand area. if it is not, your airbnb biz is not going to do well anyway. you pribably get at least 10 to 15% a year in apreciation. if you can get even probably one two airbnb a year, you have covered cost of ownership such as community expenses, property tax, etc. a few more a year, and you are covering the interest payment on the mortgage. a few more a year and you are covering the mortgage payments. especialy the last few years with historicaly low interest rates. cost of ownership can get close to zero with just few bookings a year, which probably gives a better return than a full yearly rental with rents running pretty close to mortgage payments or even a bit below.

the numbers are probably even better for anykne that owns their property outright, or at least has so.e substantial equity built up in their property.

i would never do it. too much of a hassel, but i can see why it would be popular.
Let's say I have 80 million sitting around so I dont need a mortgage and I buy one bedroom appartment in Puerto Varas let's assume that includes furnishing, everything I need to rent it out. I can rent it for 50000 pesos a night.
Over the summer I can probably rent it out nearly every day, but the rest of the year, it will be harder and there is so much supply , so let's say it was rented out 35 percent of the time as an average over the year, that's 11 nights a month. 550000 gross, I have to pay gastos comunes of say 50000, insurance probably the same, a cleaner after each guest if I dont want to do myself, that's 110000, power and internet say 50000, that's leaving me aprox 290000 PM, or 3.48 million a year, so its probably giving me 4.35 percent on my freehold appartment . I haven't included guests stealing stuff, replacement linen etc, gas heating costs etc, my time spent receiving guests and looking after the place .
So while it's not a terrible return if its freehold, its certainly not great either for the effort and if I have to take a mortgage out I'm probably barely making a return, I am just banking on making capital gains, but the number of apartments is increasing every year increasing supply so what's my used appartment going to be worth in 10 years time?
I honestly can not see prices increasing at the rate they have been in the last 5 years. The time for investing in apartments was 5 years ago, I think. I may he wrong in my assumptions and I guess they are best guess estimates on occupancy rates based on what I've heard and read etc. Either I am wrong or the market will continue on its illogical path and in 2023 I'll be saying why the hell didn't I buy an appartment in 2018? but looking at whats happening to real estate globally at the moment there could be a few bargains in the next few years for apartments in Chile.
Actually my rent out figures were too high and my purchase price too low it seems, so the return is even shittier than what I had above. Rental now is about 20 to 40k per night according to Airbnb and purchase is north of 3300UF, so closer to 90 million. So I might be making 2 percent on my theoretical 50sqm freehold appartment but for a lot of work in, I better be making an amazing cap gain, otherwise I'll stick my imaginary 90 million in a shitty term deposit for now that also barely covers inflation, but I dont have to do anything and have time to dedicate to other ideas.
One thing that's not so good about the term deposit idea is that the lack of attractive investment options reveals excessive monetary stimulus that stopped working. If the trend continues, we're facing inflation that may not only bite a piece out of your deposit but destroy it completely should things really get out of hand. If they do, you'll pat yourself on the back for owning a concrete apartment in a high demand area.
Yeah that's true. I was reading a while ago that there is a sort of building boom in Venezuela (for those that are still there) it's an effective strategy to protect their wealth from being totally destroyed by 1 million percent inflation, even cars and other assets were being used as a source of investment to conserve wealth
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Re: Housing market situation

Post by Baltimore » Sat Nov 24, 2018 1:00 pm

I'm still puzzled about the housing market in, say, Pocuro in Providencia. Apartments that are sold for nearly 400M are also available for a monthly rent of 1M or less (take a quick look at PortalInmobiliario). A real estate agent told me that she had some of those rental properties in her portfolio and that they take a loooong time to rent at those prices, around 750.000 - 800.000 per month is the threshold where the rental market becomes very very illiquid (this does not mean that there are people that are not willing to pay more than that!).

She told me that, in general, owners post asking rental price for nearly 1.2M per month in portalinmobiliario, then the apartment sits empty for ever, and they they end up renting it for nearly 800.000 per month (this latter price is not posted in portalinmobiliario). Also, take into account that many of these properties have gastos comunes for nearly 250.000 per month.

On the other hand, those same apartments sell very quickly! What do you think that explains this difference between these two markets for the exact same properties? Is it that a bunch of rich people with a tons of cash sitting around that don't give a damn about their return on investment? Is it that they just want a safe place where to put their money (i.e., a nice neighborhood), even if the return on investment is really low?

I'm a Chilean that had the opportunity to live in Boulder CO, Baltimore MD, and Albuquerque NM and I never saw anything like this in those markets, even in the nice neighborhoods. And in those cities there are also folks with lots of $$, particularly in Boulder. In general, rental values were very close to mortgage payments, so the rule was "if you have the cash for the down payment and can get a mortgage, buy it!". I have a hard time seeing the benefits of following that same logic for someone interested in buying something to live in with 2+ bathrooms and 3+ bedrooms in Providencia, Vitacura, Las Condes, Ñuñoa or La Reina.

Any insights on this would be greatly appreciated.

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