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What are the additional costs of renting?
So, you’ve got your eye on a good option, and the price is right. 35,000 Uruguayan pesos (which is approximately 870 USD) for a two-bedroom, two-bathroom apartment with a balcony.
That means a year’s rent would be 420,000 pesos (10,430 USD).
Is that it? No, not exactly. Let’s do all the necessary calculations.
That means a year’s rent would be 420,000 pesos (10,430 USD).
Is that it? No, not exactly. Let’s do all the necessary calculations.
Mónica Tesouro
Uruguay Smart Estate Expert
The following major costs are incurred when entering into a real estate rental agreement in Uruguay:
Rent
This is the basic amount you pay on a monthly basis. Usually the rent in Uruguay is quoted in US dollars, although you can also find peso options. What you and I see in our example is the 35,000 peso rent.
Rent Guarantee (Deposit with the Mortgage Bank of Uruguay, BHU)
When you sign a lease, you are often required to pay a security deposit, which is usually the equivalent of five months' rent. This deposit is refundable at the end of the lease if there have been no late payments and the property remains in good condition. Thus, add to this 175,000 pesos of frozen funds. If you were to deposit this amount with BROU Bank, you would earn 16,625 pesos (at an annual interest rate of 9.5%).
Another method of guarantee that is popular among landlords is comprehensive insurance
In this case, landlords require tenants to take out insurance that covers the tenant's risks of loss, property damage, and late payment. Depending on the insurance company, you would have to pay about 30,000 pesos more as an insurance premium.
Rent
This is the basic amount you pay on a monthly basis. Usually the rent in Uruguay is quoted in US dollars, although you can also find peso options. What you and I see in our example is the 35,000 peso rent.
Rent Guarantee (Deposit with the Mortgage Bank of Uruguay, BHU)
When you sign a lease, you are often required to pay a security deposit, which is usually the equivalent of five months' rent. This deposit is refundable at the end of the lease if there have been no late payments and the property remains in good condition. Thus, add to this 175,000 pesos of frozen funds. If you were to deposit this amount with BROU Bank, you would earn 16,625 pesos (at an annual interest rate of 9.5%).
Another method of guarantee that is popular among landlords is comprehensive insurance
In this case, landlords require tenants to take out insurance that covers the tenant's risks of loss, property damage, and late payment. Depending on the insurance company, you would have to pay about 30,000 pesos more as an insurance premium.
The cost of rent, including commission, insurance or deposit will be:
39,943 pesos (14% more in case of deposit)
41,058 pesos (17% more in case of insurance)
39,943 pesos (14% more in case of deposit)
41,058 pesos (17% more in case of insurance)
!
Tip from USE
It is advantageous to contract for 2 or more years at once; in this case, you save on commissions, and then your average costs become as follows:
35,000 pesos: first year's rent
37,000 pesos: rent in the second year
(prescribed rent increase based on inflation data)
34,830 pesos: lost profit on the deposit for two years.
In this case, the appreciation will be an adequate 7%.
It is advantageous to contract for 2 or more years at once; in this case, you save on commissions, and then your average costs become as follows:
35,000 pesos: first year's rent
37,000 pesos: rent in the second year
(prescribed rent increase based on inflation data)
34,830 pesos: lost profit on the deposit for two years.
In this case, the appreciation will be an adequate 7%.
Conclusions to be drawn
Sign a contract for a long term with the possibility of prolongation
Consider additional costs when budgeting
Try to negotiate for a deposit instead of insurance
Consult the USE to get a crystal clear understanding of how things work with rental properties in Uruguay.
Sign a contract for a long term with the possibility of prolongation
Consider additional costs when budgeting
Try to negotiate for a deposit instead of insurance
Consult the USE to get a crystal clear understanding of how things work with rental properties in Uruguay.