THE COMPLETE GUIDE TO REAL ESTATE INVESTING IN COLOMBIA. PART 2

Invest in Colombian real estate in 10 steps
Intrigued? Before moving forward, there are several important considerations investors should be aware of before purchasing Colombian real estate.

Step 1: Travel to Colombia.
Whether you are eager to buy today or are on the fence about purchasing a property in Colombia, we urges prospective investors to visit different parts of the country and make sure reality matches up with individual expectations.
In Colombia, you can rent a local apartment in the city you are planning to move to or invest in and get a feel for the local vibe. If you’re not familiar with other Colombian cities, take time to scout them out and see how each compares.

Step 2: Choose a city.
Visiting Colombia will prepare investors for taking their next step: choosing a city. Investment opportunities can be found across Colombia, but the big four—Bogotá, Medellín, Cali, and Cartagena—offer some of the most promising ones.
Medellín, aka La Ciudad de Eterna Primavera, charms with its eternally spring-like weather and fascinating history, while Bogotá wins hearts with its thriving nightlife and blossoming food scene.
Cali beckons explorers with vibrant salsa beats. Cartagena, the jewel of Colombia’s Caribbean coast, calls to beach lovers with sun and sand.

Step 3: Choose a barrio.
After exploring the ins and outs of your new city, investors will be ready to decide where they want to live. Many of the cities in Colombia—including its four major destinations—are divided into neighborhoods, or barrios, each of which has a distinctive flare.
We’ll discuss some of our favorite barrios in each city below.
Medellín: A darling among expats, Medellín is home to a number of popular neighborhoods for foreigners. El Poblado—with its nightlife, upscale restaurants, and shopping—is a top choice. However, some digital nomads and younger professionals prefer Laureles and Envigado..
Bogotá: A modern city, Bogotá has everything from sleek and stylish residential zones to bustling bohemian neighborhoods. We recommend Chapinero, which is packed with dining options, cafés, nightlife, and more.
Cali: An up-and-coming destination, Cali is a favorite among travelers seeking an off-the-beaten-track adventure. Our favorite neighborhoods in the salsa capital of the world are El Peñon, Granada and San Antonio—lush, tree-shaded barrios with a flourishing restaurant scene.
Cartagena: Heading to sunny, beachside Cartagena? We suggest Manga, a burgeoning residential neighborhood within walking distance of the historic Old Town and Getsemani.

Step 4: Hire a bilingual local team.
When it comes to finding your ideal property in your preferred city and neighborhood, we emphasizes the importance of finding a reliable team that is familiar with the local market and Colombian real estate regulations. We recommend building a locally-based, bilingual team made up of the following:

A real estate agent. Particularly for investors whose Spanish is not fluent, it is highly advisable to find a bilingual agent. A local agent can help buyers find a property that matches their requirements for location, amenities, price, and investment potential, and then assist in negotiating terms with the seller.

A real estate attorney. Beyond an English-speaking local agent, it is important that investors seek guidance from a bilingual attorney. In Colombia, contracts must be written in Spanish to be considered legally binding. The attorney will assist in drafting the sales contract, performing a title search, ensuring that the buyers funds are properly registered with the Central Bank, and assist in crafting the terms and conditions for the closing.

Step 5: Make an offer.
With the support of a local team, investors will be ready to begin the process of making an offer on the desired property. In the initial negotiation, the investment team and the seller will come to an agreement on the price and the terms of the purchase agreement. Working with a strong professional team, the investor can then negotiate what is included in the price—such as parking, appliances, furniture and fixtures and storage—in addition to closing costs, down payments, and other important conditions.

Step 6: Title due diligence.
Once the initial offer is accepted, it is essential to work with a lawyer to ensure the title of the house is clean and problem-free to avoid any legal trouble. While Colombia has undergone tremendous growth, there are a few stray properties purchased with “dirty” money that linger behind as relics of the country’s tumultuous past. A local lawyer can help investors collect and review documents for due diligence, including:
Certificado de Tradición y Libertad. This document includes a list of past owners, in addition to any debts or legal claims held against the property.
Escritura pública. This is the property title that states its address, its matrícula inmobiliaria—or public lot number—and any restrictions on the sale.
Paz y Salvo Predial. This document certifies that municipal taxes on the property have been paid.
Paz y Salvo de Valorización. This document certifies that any taxes related to the increase in the value of the property have been paid.

Step 7: Sign a Promesa de Compraventa.
If investors decide to proceed with their purchase, their lawyer will draft a Promesa de Compraventa, or sell-and-purchase agreement. This contract should outline the final sales price and important terms, including but not limited to:
Payment terms, amounts, and dates
Any commission, fees, or taxes that remain to be paid
Proration of utilities
Proration of rental income if a renter is in place
Penalties for non-compliance of parties
When signing the promesa, investors may also be required to furnish a down payment. Down payments may vary in size but typically come to around 10% of the sale price.

Step 8: Transfer money to a brokerage account.
To obtain investor status and for their funds to be legally registered in the county by the Colombian Central Bank, Banco de la República de Colombia, investors typically must transfer money from their foreign account to a Colombian brokerage bank account. Note that it is very important to register the funds correctly as a foreign investment using Form 4 as this will enable you to repatriate the money in the event you sell the property. We strongly recommend working with a lawyer to do this.

Step 9: Sign the new Escritura pública.
After the day of closing, the Colombian government may take a month or longer to officially transfer the ownership. Once a month has passed, the new owner will receive the new deed, or Escritura pública. Once the deed is signed and notarized, the investor is officially confirmed as the new owner of the property.

Step 10: Obtain a visa.
Investors who wish to remain in Colombia and establish residency may do so by obtaining a Resident, or Type “R,” visa. With a qualifying investment of at least 650 times the Colombian minimum wage, investors may apply for a five-year visa that may be renewed every additional five years.
Investors can also opt for the three year renewable investment visa option at 350 times minimum wage or for 100 times minimum wage they can invest in a Colombian corporation.

Own a piece of Colombia
If you are thinking about embarking on the exciting but proven process of investing in Colombian real estate, we encourage you to get in touch.