Medellin, Colombia · Member since 2016 · 4 posts · 4 votes
Hello BP community,
I am part-time dedicated to Real State Investing. I have 2 years’ experience in the raw land Development, lots subdivisions and construction improvements.
I want to find people interested in investing in Medellin, Colombia. During the last 10 years, this city had have a vast improvement in public safety and public transportation system. In 2012, Medellin was chosen as the most innovative city worldwide based on its economy, urban development, culture/livability, technology and research.
For these days, Passive Income is my main objective. I want to study renting apartment opportunities in Medellin. I invite everyone interested in this topic to join me, share experiences and carry out a detailed study looking for potential areas of investment in this city.
Nice to meet you virtually. I just finished the purchase of my first apartment in Medellin and absolutely love it down there. Remodeling now, plan is to rent it to the tourist market in the coming months.
I'm out of the country (i.e. I'm in the United States now) for a month, but can connect when I get back. Happy to talk!
Nice to meet you virtually. I just finished the purchase of my first apartment in Medellin and absolutely love it down there. Remodeling now, plan is to rent it to the tourist market in the coming months.
I'm out of the country (i.e. I'm in the United States now) for a month, but can connect when I get back. Happy to talk!
Hi Andres and Steve. I've never been to Medellin however, I am very familiar with Colombia. I'm more interested in Barranquilla since that is where my wife is from. Perhaps we can learn and benefit from each other. Steve how was your experience and the process for purchasing in Colombia? Was it difficult?
I'm living in Medellin, and have been networking heavily with other real estate investors down here. I know several guys who have built up a portfolio of 10+ apartments and are renting them out on either Airbnb or longer term, and the business model seems to work very well.
Get an unfurnished apartment under contract directly with the owner (avoiding all the headaches of real estate agents here), and renting them out by the room or entire apartment. They have been able to work with trusted locals to manage the day to day needs of the tenants, as well as outsource the cleaning duties. A typical example would be renting directly with owner for $1,200,000 pesos, furnishing the apartment, and renting it back out for $3,000,000 pesos. More if you can maintain high occupancy rates with shorter term tenants (Airbnb).
Because of the low risk (Not owning the property or having to put out much cash), barrier to entry is small, and can be scaled up relatively quickly. I am looking to get my feet wet with an apartment soon and see if I can grow the business up quickly.
If you're in town and want to grab a coffee or drink and discuss, let me know.
I just came across your post and I'm very interested in investing in Colombia. My wife (originally for Barranquilla) and I have talked about it a lot lately. I was more so thinking of investing in the Santa Marta area and possibly Barranquilla but I'm open to other other areas of the country. How has your experience in Medellin been so far?
Adam, I've yet to find the first property, however it comes down to basically two factors. The owner allowing you to sublet, and the building itself allowing you to sublet.
Once you have an understanding with the owner, yes, you would just spell it out in the lease. Depending on the building and it's administration, you will want to make sure it's kosher with them as well, in writing if possible. It's fairly informal here though, and most business is done based on relationships.
Great information - thank you. Are you seeing a lot of undervalued properties? Why wouldn't someone just rent it for $1,200,000 pesos from the get go rather than when it gets to $3,000,000, for example?
I've been traveling to Medellin on business for the last 5 years and it's impressive to see the kind of growth the city has experienced. I am finally ready to take the plunge so this morning I went to check out a couple of developments that are currently under in the works.
The specific projects I am looking at would not be complete until the end of 2018 but the downpayment is only $5k USD for a 3 bedroom condo and $2k USD per month until completion. At that point I would need to pay the balance of roughly 50%.
Anyone have any experience with investing in pre-construction? Any useful insights to share?
Thanks!
Have you spoken with the folks at CasaCol Medellin? They've built a few high rises in the last few years, typically financed by pre-sells. I can connect you with a couple of folks there if you want their feedback.
Steve Marcinuk hey! I just got back from Medellin and was thoroughly impressed. I want to invest there. I’m located in West New York, NJ (across the Hudson River from Manhattan). Are you available for a call?
Medellin is an awesome city and what has happened there is nothing short of incredible. Many people visit and want to move there either full or part time. Some real estate investors among those who visit would probably love to invest there just because they like the place but that doesn't mean that it makes sense to them.
I'm an international real estate investor and would love to invest there if it made sense to me. The main issue is that there is no leverage available (at a decent price). Let's assume you can leverage a real estate investment in the US 4 to 1 (20% downpayment). To get an equivalent return in Colombia, the unleveraged return should therefore be at least 4 times as high, which is obviously not the case. Moreover, the risk of investing in Colombia is much higher, including the political and currency risks, the lack of knowledge of the local laws and of a local presence, .... To compensate for that extra risk, the return in Colombia should be even higher.
Hopefully I'm not pooping the party here. But, as we know, leverage is what makes real estate investing worthwhile. I'll be the first to invest there if and when mortgages or other borrowing becomes available at a decent price. In the meantime, I'll limit my international investing to countries where I can borrow at a decent rate. It would be interesting to hear if someone has been able to get funding at a decent rate based on local real estate.
As to the model where you rent long term and recent short term, how does it work given that my research points to a much lower differential between short and long term rental rates in Medellin than what was mentioned in a previous post. This, especially given that it's mostly forbidden in El Poblado, where most visitors who have a large budget want to be. Ahat model can be done in many other places. What is the advantage to follow it in Medellin, especially if you don't live there?
Since the original post and some reactions are from a year ago, it would be great to hear if the people who posted have taken action and made progress in the meantime.
@Mike Lambert I agree that the numbers seem difficult to make sense anywhere in Colombia. I am looking in Medellin at the moment but there is no way I can get near the 1% rule. I think your best bet is to buy in plans then sell upon completion. In my opinion I think re is too expensive in Colombia, but with the election of Duque it may go higher if he can bring even more security to the country.
Anyone have thoughts on the current exchange rate?
Have any other investors had issues bringing money in to invest?
I work for a real estate investment firm here in Medellin. General thought here is that the Duque election is good for business and removes some of the risks related to property ownership that investors were fearing with Petro and a left-leaning government in South America (see Venezuela for example). Bringing money in is pretty straightforward, and something we do all the time as almost all of our investors are foreigners. So would not let that stop an investment. Have some exciting new investment and purchase opportunities here in Colombia, primarily in Cali and Cartagena if anyone would like to discuss. Just let me know.
@Adam Jason I would be interested in hearing about what you are looking at in Cartagena. I think Cali (at the present) falls outside of my comforts zone as there are some security issues I think the government needs to address first. If you would like to share feel free to send me a message.
Hi all – I am heading to Medellin and Cartagena in August to scope out rental properties and make some connections. Ideally I'm looking for a higher-end condo to hold. Would love to meet up with anyone down there who has some experience with the local market.
I'm looking for pure investment. So far it's more of a macro play for me – the market near me is getting a little too rich, I like the idea of hedging against the dollar, a market with higher barriers to entry (language barrier, cash-only purchases), and the current exchange rate seems very favorable. I'm Colombian as well so I enjoy the country and see a lot of room for growth.
What I still lack is a good grasp of expected rental cash flows there, the finer details of the purchasing process, and just overall network. Hoping to spend more time there during my weeks off of work to learn more and meet others. I'd be happy to swap notes if you do end up going.
I'll be going sooner rather than later so yes sharing notes would be great.
Yes, Medellin is a great market, especially when it comes to potential capital gains and currency appreciation.
Interestingly, you mention the lack of leverage as a positive because it reduces competition. I'm not afraid of competition (there is little anyway) and I want higher cash flow returns for my investors and myself. So, I want leverage and this is why I have invested in other international destinations before Colombia. But I'm starting closer to finding leverage there.