Work Abroad but earn in USD

Thursday, May 27, 2004

Argentina Investment Ideas

Having just sold my house in the states, I'm looking at various investment opportunities in Argentina. When I arrive there in a week or so, I'll begin trying to find some good places to make some better-than-average returns. I've identified some decent opportunities already, and I'll go over them here for all you would-be investors.

The first thing that caught my eye were short-term apartments that are being rented to foreigners -- like the ones I stay in when I come here. I typically come to argentina for at least a month at a time, so it makes no sense to get a hotel for that long. The best option are short-term apartments. For foreigners renting out a furnished apartment, the going rate is more than twice the amount for locals who get an unfurnished dig. This still represents thousands of dollars in savings over a hotel, mind you, so you're not getting ripped here.

Additionally, locals have to produce all sorts of documentation and go through a lot of hassle to rent a place out that foreigners do not have to deal with. Apparently its hard to get long-term tenants out when they stop paying, so they have to put up all sorts of payment guarantees to the landlord. Foreigners don't have to deal with any of that nonsense.

Anyhow, the going rental rate on a $40,000 USD apartment could be $700 / month if furnished nicely. That's pretty good in my book. Add to this the fact that the landlord can use a property management service for free (the renter pays the commission), and you have situation that is much better than the United States, where I've only ever been able to get a 6-8% return on a rental when using a property manager (I don't like to deal with tenants).

Another investment I'm looking into is taxi cabs. Through an associate of mine who owns about 10 along with his father (its somewhat of a family business), I've learned that the return on these can be out of this world. I'm talking about 1000 pesos per month in profit on a $35,000 peso initial investment for the taxi license and car -- not to shabby at all. That's a little over 34%. I need to get more details on this, but needless to say, my curiosity is peaked. I'll report more once I find out more.

Once I go forward with one of these deals (or possibly both), I'd be happy to help out other foreigners who'd like to get their feet wet in the local Argentine market. I hope that some other people here can e-mail in some other good investment ideas so I can share that with the group as well.

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8 Comments:

Anonymous Anonymous said...

Hi, Sounds very interesting. I have BA in my sights as a possible location to move in the next couple of years when we sell a business. I would still be self employed and interested in getting something started in BA as well. Please give us an update on the TAXI and RENTAL business ideas and any others that have come to mind. Is there a lot of Italian food in BA, I like that and always thought of a restaurant as a universal business that could work anywhere. What about online services, marketing, advertising, are local firms valuing these skills? Thanks for the posts!

1/18/2005 04:41:00 AM  
Anonymous Anonymous said...

One business idea that I have kicking around is importing antiques to Europe. You could probably get a 4x to 10x markup in dollar terms on Argentina prices depending on how well you can buy. Then there is the current bonus of buying based on dollars and selling for the Euro.

You could use a 40' shipping container to move the bulky items and take carry-on for the smaller valuables. Arranging for transport and storage while on the buying trip probably has the most risk. You would also have to know enough to avoid fakes.

Michael Shamberger mshamber@yahoo.com

1/31/2005 07:00:00 PM  
Blogger apartmentsba.com said...

The taxi rental business can be lucrative with volume. There are an estimated 40,000 taxis in the city. As someone that literally takes about 20 taxis EACH and EVERY day to go around to business meetings and looking at apartments to purchase, I can tell you that most times the taxi's are quite full. It's amazing.

The only times when it's tough on the taxis are January and February when many locals are on vacation. In turn, many taxis go on vacation during these months.

I know many, many, many taxi drivers and taxi owners. Here is the scoop. There are 3 major categories that taxi's fall in to. (1) Those that rent a taxi from an owner or a company. They pay about 50-80 pesos per day depending on how nice the car is. They pay this every single day no matter how busy they might be. You can imagine for the taxi owner it's quite lucrative since he is making a huge return on investment.

(2) Those that own their own taxis. This is the best option for people because they can work their own hours or days of the week that they want. The car is paid for. They simply get a license to be a taxi and stroll the streets looking for their next fare. Or they can pay about 30-50 pesos a week and sign up with a Radio taxi service that will also send them work.

(3) Those that work for a % of the taxi fare total. Maybe 30% of the fare.

If you can't tell, I'm always thinking about different businesses to get into. I determined in my business plan making that the taxi rental business is a solid investment if you get it set up properly.

There are downsides though. Car repairs, theft, etc. but I believe they are minimal. There are a lot of different business ideas I have and I believe they all would be profitable. The only way to survive here is creating your own business.

If you do move here. Take the time to use excellent consultants, lawyers, accountants and money transfer firms and banks. You can imagine what a zoo it is here.

I think I'll create my own blog to talk about these things. It's been very very interesting since moving down here and creating a business. Basically, it comes down to I believe foreigners will make a lot of money in Argentina. I love Argentina but the locals aren't capable of doing business efficiently and globally. They just think differently.

I believe Americans, Brit's and Europeans and the Chinese will come to Argentina and become market leaders in their respective fields.

Good luck.

Mike

mike@apartmentsba.com

5/13/2005 09:14:00 AM  
Blogger Sterling's Qualia said...

Hey,

Give us some updates. How has it gone?

Thanks.

3/10/2010 03:01:00 AM  
Anonymous Anonymous said...

Hey Guys, Im from Argentina and believe me don't know what you talking about, TAXIS? BUSSINESS??...jajaja, its the MAFIA number one in my Country!!, you have to pay a fee for operate taxis there, is no so simple, sounds great but is not true, and on the other side, we don't like Inmigrants the same way here in America, no one likes Mexicans, Argentinean, Uruguayean, Etc, stay here guys and dont bother in my country, we dont want your stupids hamburguers, hot dogs and all those fully crap foods and culture, Argentina is one of the best countries to live, but "without Yanquees!!", americans stay at home, we dont need WAR, Oil crap, black people and ignorants, Argentina is the best and we will take care of it.
Thanks

6/16/2010 11:35:00 PM  
Anonymous Anonymous said...

Che "Anonymous",

I can understand your sentiments but don't confuse politics with people. Our citizens didn't start a war and know very little about oil.

Over the last several years I have lived in Patagonia and have seen, with my own eyes, that "yankees" dominate any business they take on...unlike the Argentines. They seem to lack the drive (lazy) to do what it takes to be successful economically.

On the other hand, the Argentines are incredibly efficient at putting a party together.

Viva Argentina! Vive Messi!

6/18/2010 04:36:00 PM  
Anonymous Juan in Texas said...

I'm Argentinian too and I'm very ashamed to see another Argentinian talking that way. Much more knowing that he is in the US. In the same way you have to be living or visiting the US for whatever the reasons you have to be doing it, there are other persons out there that can do EXACTLY the same thing. Regarding the Taxi business I have to disagree, I'm the IT persona behind the largest taxi company in Argentina and they started REALLY small, 5 taxis and 1 person taking calls, today they have more than 1000 taxis and almost 200 persons taking calls. That's not the point, but I was a witness of what Mike is saying. Sadly it is that way, we are very "cancheros", very "vivos" but when it comes to really hard work we have tremendous problems.

Anyway, thanks for your opinions Anonymous I thing that one of the reasons we are the way we are is because of people thinking like you, is not worth it to do this or that, it's a maffia, you need tons of money, etc. Too sad man.

10/01/2010 05:40:00 PM  
Anonymous Anonymous said...

Hi All,
I am an American living in Lujan Buenos Aires. We moved here about a year ago. We bought a clothing business front upon arrival. The business started off very well but sales have dropped more than 50% in the last year. The local taxes and electric bill are killing us. We opened up a second business. Take Out food: Fried Chicken and Wings along with local cusine. The Take out is okay but not nearly enough to our liking. My advise to all of you is make sure you know all of the litte bills that come along with business here. As far a taxis go we looked into that as well and the return rate here where we live is minimal. Perhaps in B.A. it is much better but the competiton is high and there are payoffs.
I do agree that the Argetnine work drive is very low in this country. We work 10 to 14hrs a day between both business and no days off. Good luck to all of you!!

1/28/2011 06:00:00 PM  

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