Rentals in dollars or pesos: what is convenient today and how Garantear changes the real estate game

The rental market in the City of Buenos Aires is experiencing an important transformation. Although the law allows contracts to be agreed in the currency agreed upon by the parties, reality shows a strong predominance of the peso, with approximately 90% of traditional contracts signed in the local currency. At the same time, there is a decline in the offer published in dollars, which fell between 32% and 35% in the last 12 months, indicating that many owners are returning to quoting in pesos.

Faced with this scenario, the key question for tenants and owners is: what is convenient?

Dollars vs. Weights: a question of risks and opportunities

The choice of currency is not trivial and carries different risks and benefits for each party.

1. For the owner:

Contract in dollars:

• Advantage: It offers a theoretical “hedge” against a sudden devaluation of the peso. Income in dollars maintains its face value in hard currency.
• Risk: If inflation in pesos is very high and the official exchange rate remains stable (“exchange delay”), the owner can lose real purchasing power when converting your dollars to pesos. Furthermore, by quoting in dollars, it reduces the pool of potential tenants (many receive their salary in pesos), which can extend vacancy times. This format is usually reserved for premium segments of the market.

Contract in pesos with adjustment:

• Advantage: If the contract is adjusted by an index such as the CPI, the owner can protect your income and even exceed the profitability of a dollar contract in contexts of high inflation and moderate depreciation of the peso.
• Risk: If the agreed adjustment index fails to keep pace with real inflation, there is a risk of income erosion.

For the tenant:

Contract in dollars:

• Risk: Those who receive their salary in pesos are completely exposed to the exchange rate. Each jump in the dollar implies a immediate increase in price of rent in terms of your income currency, affecting your budget.
• Consideration: It is only predictable if you have dollarized income.
• Contract in Pesos with Adjustment:
  • Advantage: A prolonged drop in the exchange rate can reduce the cost in pesos, which will mean relief for those who have salaries in this currency..
  • Risk: In an unstable economy, depending on the exchange rate can present itself as a real problem, in the event of a strong devaluation.

Guarantee: peace of mind for the contract, in the currency of your choice

Regardless of whether the contract is agreed in dollars or pesos, a key element to finalize the agreement is the warranty. It is here where Guarantee It positions itself as a fundamental actor that accompanies and modernizes the process.

What is Guarantee?
It is an Argentine platform of rental guarantees digital that offers an agile solution so that tenants can rent without having to resort to the traditional owner guarantee or a huge deposit. The company defines itself as “your collateral quoted and pre-approved” in less than a minute.

Advantages it brings to the ecosystem:

• Speed ​​and digitization: Streamlines a traditionally bureaucratic and slow process.
• Expand the tenant pool: It allows people without a property guarantee or without properties in their name to access a rental by presenting this solid alternative.
• Reduces risk for the owner: It offers the lessor a professionally managed guarantee, which provides greater security of collection, regardless of whether the contract is in dollars or pesos.
• Market modernization: It aligns the Argentine real estate market with international practices, where the use of alternative guarantees is common.

In conclusion, the rental market in CABA today clearly leans towards contracts in pesos, reflecting the reality of the income of the majority of tenants. The choice between dollars and pesos is a strategic decision that depends on the exposure to each currency, inflation and exchange expectations, and the risk tolerance of each party.

In this context, the innovation of services such as Guarantee provides incalculable value: gives peace of mind about payment to owners and facilitates access to housing for tenantsmodernizing and streamlining a market that is in a clear transformation process.