A friend of mine recently bought property here in the city, in the Laureles neighborhood. We sat down with her for an interview to find out what she thought of the process, and seek advice for others who are thinking of doing the same.
Tell us a little bit about yourself, where you’re from, and how you ended up in Medellin.
My name is Erin, I’m 29 years old, I’m from Portland, Oregon and I’m a teacher. I first came to Colombia in 2008 for a vacation with family friends who are Colombian. After graduating college, I decided that I wanted to teach abroad and I started looking at ways to move to Colombia. After completing my CELTA teaching certificate in 2015 I was connected with a job through the Ministry of Education of Colombia and was placed in Medellín. Three and a half years later, I am still here and have just finished the process of buying an apartment in Laureles. I am also starting my own education project called Proyecto Florecer as well as a Kombucha company called Media Luna Kombucha. These different local projects have me feeling as if I will be staying here for quite some time, so it felt like a great time to put down roots here.
Why did you choose to invest your money in Medellín?
The first question I had to ask myself, was “Why do I want to invest in an apartment?” Will it be an investment property? Will it be to get a visa? Do I want permanent residence? For me, I decided to invest in Medellín because after nearly four years of living in the city and renting I wanted to create a permanent home. My family has always been very supportive of buying (and luckily, of me living so far from home) and fortunately with the dollar being so strong it seemed like the right time to invest in property here. Medellín is becoming more of an international destination and I believe the value of property is only going to increase over time.
Did you consider any other cities in Colombia?
After having lived in Medellín for three and a half years, I didn’t consider buying property anywhere else. Prices are still relatively affordable in nice neighborhoods and the city of Medellín is only attracting more and more people every day.
Which neighborhoods were you considering? Why did you end up in Laureles?
When looking at neighborhoods, I wanted something central in the city and in an area that had access to public transportation, parks, restaurants, gyms and shopping centers. When I started my search, I looked for apartments in the Belen, Laureles, San Joaquin, Conquistadores, Floresta and Estadio neighborhoods. I was fortunate to find a place I loved in Laureles Las Americas, and it has great access to all of the things that I was looking for in a neighborhood. Laureles is one of the greener neighborhoods in the city, with Primer Parque and Segundo Parque just ten minutes from my apartment. There are also great coffee shops like Café Revolucion, Del Muri, and Casa Redonda a co-working space and coffee shop. As a vegetarian, there are also great menú del día restaurants and natural grocery stores like Salud Pan, Café Naturalia and Espiritu Libre. If you are looking for good nightlife, Laureles is right next to la 70, which has a lot of authentic fonda bars and restaurants as well as Son Havana for live salsa music and dancing.
Public transportation is also really important to me, and my apartment is located close to La 33, La 80 and buses pass right out front of my place, that go to El Centro. I am hoping that one day the city completes the Tranvía on La 80 which would make connecting to the metro even easier!
How did the financial process proceed? Tell us about any issues you had with opening accounts, transferring money, or getting visas.
To purchase the apartment, I used my bank from home in Portland, Oregon to transfer money to an account I opened at Alianza Valores. The process for bringing money into Colombia with Alianza was fairly smooth, and before long the money was in my Colombia bank account.
The visa process was a bit more complicated, as it is for many foreigners. I want to work independently to allow myself time for my education project to develop. Because of this, I did not apply for a work visa or a student visa. Additionally, I did not qualify as a foreign investor because I had spent more than 180 days in the country over the past year. After working with my lawyer and discussing different options we decided to register my education project Proyecto Florecer as a corporation (the same as an American LLC) and purchase the apartment through the business. By investing in the business via the corporation I was able to get my visa.
When I transferred money to Colombia, the exchange rate at the time of the conversion was 3,015 COP / dollar. The peso had been dropping so we decided to convert as soon as the money was in the account. Fortunately, the dollar has been really strong over the last few months, but luckily with Alianza you have one week to convert the money and you decide on when to convert at a time when the dollar is the strongest. It is important when transferring large sums of money to make sure that you follow trends in the exchange rate because the fluctuation of even 100 pesos can mean losing a significant amount of money.
Once you knew you wanted to buy, how did you get started? Tell us about the process.
The investment process for me started in early January 2019. I was home in the United States and started by looking at apartments on Fincaraiz, Metro Cuadrado and Facebook. When I arrived to Medellin on January 15th, I had already connected with a real estate agent.
The realtor and I went and saw a place together, and, although I really liked the apartment, I was hesitant to invest so quickly and wanted to pursue other options in other neighborhoods. I continued looking for another month in other areas like Belen, Conquistadores and San Joaquin. All of the apartments I saw were more expensive and less square footage than the one I ended up buying so I decided to go back and schedule a second viewing. After seeing the apartment several more times, I made a verbal agreement with the owner regarding the price and we came to an agreement.
Usually apartments in Medellin are priced higher than their value and you can negotiate between a 10%-20% reduction. With closing costs included, I was able to purchase my apartment for 30,000,000 COP less than the original list price. After completing the agreement for the promesa de compraventa (purchase sale agreement), we signed a month later. It is critical to have a lawyer that is able to look over the title search to make sure there are no liens or any issues with the apartment that could affect the investment in the future. It is better to invest in lawyer fees (in my case approximately COP 3,000,000), than risk losing property investment or having issues reselling in the future.
What websites did you use to search?
I started with a search of different real estate agencies in Medellín and came across a few useful websites. I spent some time cruising through websites like fincaraiz.com.co, premiumpropiedades.co, and espaciourbano.com to look at different listings.
It’s important for others familiar with real estate in North America to understand that Medellín does not having an equivalent to MLS listings, so these websites can be a good place to start. They allow you to enter specifications for the property you are looking for (price, square footage, neighborhood, number of bedrooms, bathrooms, etcetera) and then give a list of apartments based on the data you’ve entered.
While they are in Spanish, they are very user friendly and easy to navigate with either the google translate tool built into the sites, or a little patience. I saw a property that I liked on the website, and contacted the agent that was listed. My agent was very knowledgeable and I decided to work exclusively with him from the start. Unlike in other countries, sellers don’t exclusively work with one agent so there is no guarantee that the property you see will not be shown by other people. This can make it difficult to know if a property is about to be sold.
What tips do you have for other people who want to invest in Colombia?
My tips for people wanting to invest in Colombia would be to work with a good real estate agent and a good lawyer. Although my lawyer fees were fairly high, I really felt as if they earned their money. They were knowledgeable and efficient in all of the work they did.
My other tip would also be to be patient and do a lot of research beforehand because there are a lot of things to consider when buying an apartment (price, administration fees, location, old or new construction, location, etc). Fortunately for me, I had a clear idea of what I wanted from an apartment and overall this process was a lot easier and faster than I expected. There were still frustrating moments and setbacks when things didn’t go as smoothly as I expected.
Tell us about any issues or problems you had during the process.
After doing research for the property title search, my lawyer found out that there was a lien on the apartment because one of the owners hadn’t finished a payment he owed. This meant that the apartment could not be sold until the owner had paid off their debts and the process was registered with the city. This process took about six weeks after it went to court and the embargo on the apartment was lifted. Another issue I encountered was that there were six different owners. The apartment I bought was owned by a large Colombian family and each of them had a different percentage of the apartment, including a different percentage for each parking space. This meant writing six different checks at the time of the purchase and an additional cost paying for each cashier check.
You purchased a pretty big place for just yourself (144m2) . Were you certain you wanted 3 bedrooms?
It is difficult to find an apartment with such great square footage for the price I found. I wanted a place that had at least three bedrooms so I could rent out the rooms for extra income as well as have the possibility to have a place for a family someday. I plan to have an income to begin with from the apartment renting the rooms at $275 USD each and the parking spaces for COP 100,000. There is a lot of potential for this apartment because it is so large and square footage is one thing you cannot add to an apartment!
After the purchase of the apartment, what else is there to do?
The apartment I bought is a classic Colombian style apartment. To begin, I plan to paint and renovate the kitchen and bathrooms and open up a wall in between the kitchen and the living space. Fortunately, the structure of the apartment is in great condition and only cosmetic changes need to be made.
Any thoughts about the future of the real estate market in Medellín?
I am hopeful that the value of properties in Medellín is only going to increase as time goes on. As more people travel the world and look for places to work abroad, Medellín is an incredible option due to its geographic location, weather, the wonderful people and the affordable cost of living. I feel fortunate that I made the decision to purchase when I did because I know the value of properties is only going to increase.
We hope you’ve found this Q and A with Erin to be helpful. If you have anything else you’d like to ask her , Contact Us and we’ll put you in touch with her, as she’d be more than happy to answer follow up questions.
Also, feel free to reach out to me directly at any time at [email protected]