Uruguay has many attractive real estate ownership opportunities.
However, there are many situations when it makes more sense to rent an apartment in Montevideo instead of buy, such as:
- You are trying a new job or relationship in Uruguay and don’t want to buy until you know the new situation will work out.
- Your money is better invested in your own business or another field of investing where you have greater interest and expertise.
- You believe a more favorable market cycle or opportunity is around the corner and you want to keep your cash liquid and ready.
- You are still saving your money in preparation to buy a property.
- You are a free spirit and the responsibility of property ownership cramps your style.
Before finding an apartment, find a good real estate agent
A real estate agent in Montevideo who is bilingual, reliable, competent, and is looking out for your best interest may be more difficult to find than a good apartment at a fair price. To successfully rent an apartment in Montevideo you need someone who knows the rental market, is familiar with rental forms, and will be there to help if a future problem arises.
Since you are going to pay a commission to them to help you rent an apartment in Montevideo, it only makes sense to pick an agent based on his or her ability and willingness to serve, as opposed to ending up with an agent by chance simply because they happened to show you the first apartment you called about (and may be representing the property owner).
To locate a good agent to help you rent an apartment in Montevideo ask your English speaking expat friends, ask around at expat meetings, and check online forums. Make sure the recommendation comes from someone who used the agent’s services, and if not, ask for references and check them.
Tip: Ask a real estate agent about her fee structure in your first conversation, before you make a commitment to work with her.
Where to find apartments for rent in Montevideo, Uruguay
- Real estate offices that manage properties in communities of interest
- Signs on units in the area where you want to live: (Aquilar = For Rent)
- Friends, acquaintances, and members of expat groups
- Porters in buildings you would want to live in
- Sunday newspaper: El Pais
- Websites: http://gallito.com/ and http://www.apartamentos.com.uy/
Tip: Don’t get too excited about a rental listing when you first see it online or in a real estate office. Uruguay real estate websites are not always up-to-date. Also, an apartment could have been rented by another real estate office without notifying the office where you saw it advertised.
The paperwork
A rental lease agreement will identify the parties making the agreement, the property, the costs, pertinent time frames, the responsibilities of each party, and any other terms of the agreement. (Sometimes there is a reservation agreement similar to what is used in real estate purchases.)
Unlike real estate purchase agreements, the paperwork to rent an apartment in Montevideo does not require the legal services of an escribano, however, an escribano may be involved to act as a trustee in handling the deposit.
A condition report and apartment inventory at the time the tenant takes possession becomes a part of the agreement.
Options to renew may be included in the lease; however, Uruguayan law gives a tenant with a good payment history the right to extend their lease beyond the contract term.
Move in costs to rent an apartment in Montevideo:
- First month’s rent: paid in advance to the landlord
- Deposit or Guarantee: equal to 3 to 5 month’s rent. By law, the guarantee is deposited in pesos to Banco Hipotecario del Uruguay.
- Real Estate agent commission: I have been told that a fee equal to one month’s rent (plus value added tax) is common for leases of one or more years.
Note: A friend who is a property manager reports that foreigners usually need the full five month deposit because they often do not have collateral or a rental history in Uruguay.
Estimating your total monthly cost to rent an apartment in Montevideo
In evaluating and comparing the costs of apartments it is important to know the total monthly cost, as well as the total move-in cost, before you make a decision.
- Monthly rent
Tip: Ask how the monthly rent is to be paid each month. (Writing a check and putting it in the mail is not how payments are made in Uruguay.) Some owner’s require deposits be delivered to their bank to be deposited in their account.
- Gastos Comunes: Gastos Comunes are common expenses shared by the people living in a building such as lighting common areas, upkeep of elevators, porters, and building maintenance.
Tip: Buildings with more services and amenities tend to have higher gastos communes, especially if there are not very many apartments in the building to share the costs. Buildings with a lot of units often have lower gastros communes because the costs are divided between more units.
- Utilities: It is important to know what utilities are included with the rent and what utilities are your responsibility. (Water is usually included, electricity, phone, internet, and cable are usually not. Heating is a big expense, so make sure you calculate it.)
Tip: Make sure that utilities you will be paying for are in your name and billed to you. If a bill is in another’s name or will be shared between tenants, make sure you understand the situation and that all previous bills have been paid or properly prorated. Don’t get stuck paying more than your share.
Tip: Winter heating is a significant cost that can vary greatly. Some apartments in Montevideo have no heating equipment and you, as the tenant, will have to provide your own. Some buildings have a central heating system and divide the costs among all the units. Costs can vary dramatically depending on the type and efficiency of the central system, so don’t make any assumptions. In order to accurately calculate your monthly housing costs, you need to determine an average monthly winter heating cost.
- Taxes: There are various types of taxes associated with a property. The Contribución Inmobiliaria (Real estate contribution) and Impuesto de Enseñanza (Education tax) are paid by the property owner.
The Tributos Domiciliarios (Residential taxes) are due 6 times a year and paid by you, the tenant, when you rent an apartment in Montevideo.
The Tarifa de Saneamiento (Sanitation fee) is due 6 times a year. A friend who rents in Montevideo pays this fee as part of the gastos communes.
Tip: A good question to ask your real estate agent: “I am aware of these costs (list the costs you are aware of), are there any other move-in costs or monthly housing expenses I may encounter?
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