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Colombia An Attractive Destination for Property Investment

In Colombia, you can buy real estate cheap and achieve an 8% return on your investment from a rental.  You may also benefit from the exchange rate because local real estate transactions are denominated in local pesos.

Colombia An Attractive Destination for Property Investment

 

It is amazing how much Colombia has changed. 15 years ago, it was the last place you would think of real-estate investment because it was a country in real trouble.  Leftist guerillas controlled large parts of the country especially in the jungle and clashed frequently with the armed forces and many of the major cities were controlled by the drug cartels.

Now, the middle class is on the rise and getting wealthier and Medellin, once described as the murder capital of the world, is a completely changed city.

This transformation has not happened overnight and Colombia has not yet left all its problems behind.  You would still have problems operating in the jungles or in remote areas.

  • However, the income of the average citizen has doubled in less than 10 years and the streets of cities like Medellin are full of swank new restaurants and boutiques.
  • Brand-new cars fill the streets and 40% of the population is under the age of 20.
  • Many Colombians who left the country because of the problems are beginning to return.
  • Plenty of foreign companies are coming in to take advantage of the opportunities.
  • Wall Street believes that Colombia is going to be the new Brazil because of its abundance of natural resources, low indebtedness and it’s progressive government.

 The best place to buy property in Colombia

In the up market Medellin areas of El Poblado and the Golden Mile, a high quality condo measuring 1000 ft.² could cost you as little as USD $100,000.

The cafés here remind you of Europe and your don’t have to worry about the weather since the temperature varies only 1° throughout the year

  • A few minutes away from El Poblado, the Golden Mile is full of banks and offices, and outdoor eateries that are full of activity.
  • Weekend nightlife revolves around this area as well as the Zona Rosa in El Poblado.
  • Property sizes are denominated in square meters and you should multiply by 10 to get the rough area in square feet.  Surprisingly, the smaller units are more expensive and large penthouses are available at the lower end of the price range.
  • Preconstruction condos sell for USD $2000 per square meter and more compared to older apartments are available for around USD $1,500 per square meter.
  • Short-term rentals are not allowed in the better buildings and it is illegal to rent your apartment for less than one month unless 70% of the owners in the building agree.
  • But these are normally the places where you should buy because of the quiet surroundings and the quality of maintenance.
  • You could earn a yield of up to 8% on rentals of a few months to a visiting executive and there are agents who specialize in this business.

 The bottom line

Colombia seems to have returned to a stable period of existence and I believe that property prices are set to grow strongly over the next five to 10 years.  While you are waiting for this to happen, you would be achieving a yield of 8% on your investment.

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