Property Investments in Buenos Aires
A reader wrote in with the following comment, which I will post and then address. With all the posts recently about the negatives of investing in Argentina, I think there may be a little spell of pessimism going around.
I'm really enjoying your writings on your blog. I'm learning so much. Just today a local merchant/friend warned me not to invest in any property in Argentina because a friend of hers had her farm consficated by the government.
Safely Investing in Property
Although I don't know the details of the reader's friend's farm, I can only wonder whether all the taxes were paid-up and whether the land was being put to productive use. Foreign farm ownership is a very touchy issue in all of Latin America. Wars and revolutions have been fought over farm ownership in Latin America. United Fruit Company, anyone?
Despite all the negative things being said about real estate in Argentina, allow me to put forward a few positives. If you deal with reputable professionals, you will greatly reduce your risk. Make sure you use a good notary who will validate the title of the property. You want to make sure you will be getting proper legal ownership. If you are renting apartments, it may be smart to go with a management agency. These companies will investigate the tenants and require them to obtain a guarantee of payment. I went through one of these agencies when renting our office and believe me -- they really do check you out.
When signing contracts with local companies, make sure that as a foreign person or foreign company that you will have legal standing to enforce contracts within Argentina. I was surprised to learn that foreign individuals without a DNI essentially have no rights within Argentina. That's one of the main reasons I got my DNI -- to ensure that I would have the same rights and legal protections as citizens.
Get a second opinion. Ask around and see what people think about an investment idea you have. Have a knowledgeable third party look over the investment numbers and see if it makes sense. Before entering into any investment, it may not hurt to pay a lawyer $100 to look over everything and get his or her advice.
Doing business in a foreign country can be risky, but also very rewarding. Don't just write-off the country as "too risky". If you do your homework (or pay others to do it for you), you can limit your risk on any investment. Jumping into any investment without proper research is a good way to lose your shirt, no matter where in the world you happen to be. So, let's all not be so negative on Argentina. There is risk, but not so much more than anywhere else.