Retire to charming, dirt-cheap Buenos Aires

By International Living

On Jan. 7, 2002, Argentine President Eduardo Duhalde announced default on the country's $141 billion debt and ended the peso's peg to the U.S. dollar. It was pure desperation. Thirteen people were killed a week earlier as Argentines rioted in protest of government restrictions on bank withdrawals. Unemployment rose to 20%. The economy contracted 11%. Prices on real estate fell by 30% to 70%, creating some of the best bargains in the world.

Today the crisis isn't over, but the worst of it appears to be. The politics are a mess, but getting better. The economy has been decimated, but a recovery is under way. There are still opportunities in this country for savvy investors.

If you are thinking of relocating here -- either full- or part-time -- now is the time to get a foothold. There are no restrictions on foreign ownership of property, so it is very easy for a foreigner to buy real estate here.

Buenos Aires is a cosmopolitan, genteel and welcoming city, and, if you are at all interested, you should visit it now, while prices (for just about everything) are probably lower than they will ever be again. The Argentines appreciate foreign tourists, particularly foreign investors who will be able to help turn the economy around.

In fact, the only signs of turmoil may be the prices. They are unbelievably low on everything from taxi rides to fine-tooled leather goods, from delicious food (a multicourse lunch at a corner bistro will run less than $5) and world-class wine to -- especially -- real estate.

The capital has all the symbols of modernity: joggers, Internet cafés, ubiquitous cell phones, women who have clearly resorted to plastic surgery, psychiatrists and real-estate agents, health-food stores and overpriced folklore boutiques. There is a large expatriate community in the northern suburbs of the city, where you'll find supermarkets with shelves stocked with familiar American products.

All indications are that an investment in an apartment in Buenos Aires is a good one. If this interests you, you have two options:

• You can buy something small, something that would be considered a starter home for a single person or a couple;

• Or you can buy a larger unit, a "classic" apartment in one of the better neighborhoods.

A smaller apartment would make a good long-term rental on the local market, returning a good profit with minimal hassle. Given the current economic crisis in this country, though, eviction could be a potential worry. However, laws in Argentina are similar to those in the United States, and the eviction process isn't overly difficult. There are steps to follow, and it's nothing like Europe, where even the most deadbeat of tenants can be all but impossible to eject. Still, you should do some background checking before accepting any renter.

It is important to note that, these days in Buenos Aires, even the smaller apartments in good neighborhoods are doing well as short-term rentals. Tourism has become a very big business in Buenos Aires. Smaller apartments (one and two bedrooms) are ideal for short-term rentals. The demand is quite high since most hotels are fully booked, and the cost of renting a short-term rental apartment is much lower than staying at a hotel.

Either way, if you purchase an apartment in a desirable location -- especially in the Recoleta and Plaza San Martin -- you probably won't go wrong. Here, apartments in older buildings are reminiscent of those in Paris and Barcelona, with style and character. They appeal to local residents as well as tourists and longer-term visitors. And if you owned one of these, you would certainly want to have occasional use of it.

Neighborhoods of Buenos Aires

San Telmo: Funky, artistic, bohemian, charming San Telmo is one of our favorite places in Buenos Aires. If you like funky sidewalk cafés, bohemian bistros and eclectic antiques -- and if you don't mind a neighborhood that's still a little rough around the edges -- you'll love San Telmo, too. Prices in San Telmo currently range from $80 to $110 per square foot. And the government has just embarked on two initiatives that should help property values grow in coming months: A street-and-sidewalk improvement plan has been approved, as has a program to provide additional security to this area, a long-time favorite of both locals and tourists.

Palermo: This is a trendy neighborhood … and a tranquil and safe one, hence prices are relatively higher than in other areas of the city. Current prices in Palermo range between $120 and $180 per square foot, with the higher values for new construction or premium location and the lower values for older properties.

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