Gringo Pricing and Medellín Apartment Rentals - Medellin Advisors

Gringo Pricing and Medellín Apartment Rentals

Capricho

Lodging; everybody needs it. It’s not a topic that one can simply dance around. Fortunately, in a place like Medellín, those privy to the right knowledge are rewarded with unmatched value for money. Contrarily, those without it are likely to run into problems.

We know it’s a touchy subject, but yes… Airbnb listings are generally getting more expensive. Likewise, yes, ‘gringo pricing’ is growing more prevalent throughout the valley. It’s all because demand continues to surge in the once mystified land that is Medellín. The secret’s already out!

Fear not though. Medellín continues to be very affordable. It simply requires a little bit of diligence to separate yourself from other foreign visitors.

In Medellín, lodging accommodates everybody, regardless of budget.
In Medellín, accommodation accommodates for everybody, regardless of budget.

Whether it pertains to the growing phenomenon of ‘gringo pricing’, or navigating through the tough terrain of long-term rentals, you definitely want to make sure you’re clued up like a local. This is Colombia, and it pays to be in the know.

In this guide, I’ll share with you the ways in which I’m able to take advantage of Medellin’s boggling value for money.

I’ll also impart all that you need to know in order to navigate through the muggy waters that are long-term rentalsI know it can be a headache, and I’m here to help. 

Is Accommodation Really Getting More Expensive?

As far as it goes for the options that appeal most to foreign visitors – yes; prices are hiking. Why?

Tourism in the valley continues to realize new milestones. In the 5 years leading to 2019, tourism grew by over 50%. Furthermore, in November 2021, the city recorded 15.4% more travelers than it did in the same period of 2019. Americans (US) constitute Medellín’s largest foreign demographic at roughly 20%.

Medellín’s flourishing tourism sector coincides with the steady increase in property valuation and rental prices. According to the national statistics department (DANE), the average annual increase of property value in Medellín is 9.36%.

Simply put, in a valley restricted by space, demand is increasing quickly. And it’s not just amongst foreigners; despite possessing just 1.8% of Antioquia’s total land space, the Valle de Aburrá homes over 58% of the department’s population.

This makes the valley even more sensitive to market influences from foreign travelers.

A changing paradigm in the way we work, alongside Medellín’s proximity to the US, make it an attractive place to be, long-term… Now more than ever, people are competing for rent within the city’s higher estratos.

The vista from my Airbnb accommodation, infront of the Primer Parque, Laureles. Lodging can be very affordable in Medellin.
Vista from my old Airbnb in front of the Primer Parque, Laureles.

The problem you may or not have is that for many foreigners coming to Medellín, higher-end rent is still attractively priced. $1,300 USD for a furnished 1-bedroom apartment in El Poblado is widely considered amongst expats to be reasonable, regardless of whether it is actually a ‘gringo price’ or not. With more gringos, expect more ‘gringo pricing’. In any case, the Law of Supply & Demand prevails. Each year, the willingness to pay higher prices increases as the valley welcomes more high earners. It may be an unfortunate outcome for penny-pinchers like myself, but one that is inevitable when a place becomes popular. In that sense, it’s tough luck for those that aren’t willing or able to match up.

Apartments for sale in medellin colombia
In MedellÍn you can find luxury apartments ideal for comfortable living

Here’s the silver lining though, rentals in Medellín are very accommodating. Whilst higher-end furnished rentals are increasing in price, we must not forget that the average monthly income in Medellín is approximately $300 (USD).

Of course, this is going to be reflected within the price of lodging, regardless of foreign influence.

Obviously, to get in like a local, you have to think like one (or at the least, be privy to the right information). Por eso soy bueno! Below, I’ll tentatively share with you a resource that has never let me down.

CompartoApto - A Gem of a Resource

Compartoapto is an online marketplace for those looking to rent shared apartments.

The keyword here being ‘shared’. This option isn’t for everybody; if you’re looking for a private place, then perhaps give this one a miss…

If however, you’re on a budget and eager to immerse with Spanish speakers (highly recommended) then I can’t recommend this marketplace enough!

Compartoapto is a great option for those looking to rent a room. It is a very economical form of lodging.
Compartoapto is an economic way of finding SHARED lodging in Medellin.

In the image carousel above is a listed room located in the ritzy neighbourhood of Patio Bonito, El Poblado.

This listing is priced at COP $1,100,000/$278 USD, monthly.

Not only is it located in an estrato 6 area (the highest socioeconomic level) but boasts an impressive array of amenities.

The apartment appears to be well furnished and offers wi-fi.

It is shared with 8 other people – 9 people in total. There are 5 bathrooms meaning that each one is shared by approximately 2 people.

Again, depending on your budget and degree of willing sacrifice, you can find similar listings even cheaper than this.

For example, in Laureles (estrato 5) you can find rooms for as low as COP $450,000/$114 (USD).

The point being that having a strict budget does not equate to being cast out of the ‘nicer’ areas of the city. Concessions may be required though, e.g. willingness to live in a shared apartment.

Comfortable apartment in Medellin
For some, apartment sharing is an ideal way to save money.

So what is special about Compartoapto?

An advantage of this marketplace over others like Airbnb is that it is catered to, and predominantly used by, Spanish speakers. More importantly, it’s not catered to English speaking travellers that generally pay more for accommodation. Knowing the language is always good for lowering your costs.

Also, with Compartoapto, you do not need to pay booking fees/commission to the third party. This is not the case with Airbnb.

Finally, I would add that Compartoapto, much like Airbnb, takes the sting out of awkward Colombian bureaucracy. More on that later… 

My second go-to resource: Airbnb

Airbnb, the world’s favourite online marketplace for lodging…

With good reason. In Medellín, listings have exploded in recent years. This is despite government tightening on legislation.

Airbnb’s strength is in its popularity; the sheer variety of options available in a single domain is unrivalled. Unfortunately, this is also its biggest drawback. By far, Airbnb is the most popular means of booking accommodation in Medellín. Prices are currently spiking in response to high demand. 

Another gripe I have with Airbnb is that guests pay approximately 14% of the booking subtotal. If you’re paying $6oo USD for a flat, that equates to $84.

During past bookings, I have been able to circumvent this fee by contacting the host directly, thus bypassing Airbnb as an intermediary. For those on a budget, it is worth trying. Just remember, there is no guarantee that the host will allow you to book directly as although it will save the airbnb commission they lose some of the protections offered to hosts by the platform. 

This is how I find economical Airbnb options:

I must begin by introducing a caveat – I tend to seek single bedrooms only. I don’t care about sharing an apartment. Rather, I relish the opportunity to live with others. Others may not feel the same way and want more space for themselves.

Airbnb for accommodation in Medellin is getting more expensive.
Begin by listing your destination and time required. I have selected a month.

Then, on the far right of the page, click on ‘Filters’.

At the top of Filters, you will see the charted average price of all listings for that selected time period. In this case, the average price is £1,137/$1,420 (USD).

Drag that bar down to capture the budget range that you are looking for. See image below:

Airbnb accommodations in Medellin can still be very affordable with the right filters. Lodging.
Airbnb can be very affordable if the right filters are applied.

As shown above, there are plenty of lodging options that accommodate for a budget of £332.

And no, do not worry. They will not have you living in dire conditions, nor in an impoverished comuna…

Quite the contrary. Look at what £223 can get you in the Laureles area (estrato 5).

If you’re looking for something larger, or an entire flat; whatever it may – Airbnb provides you the tools to find what you’re looking, for the right price. Remember, communicating directly with the host can result in you bypassing commission fees!

Look at what you can get for £223. Accommodation in Laureles, Medellin, Colombia. Lodging
Look at what just £223 can get you in one of the best neighbourhoods of the city (estrato 5).

Long-term Rentals: The struggles are real

I hope by now, I have demonstrated that Medellín caters for all when it comes to short-term rentals. Marketplaces like Airbnb and Compartoapto take the sting out of uncooperative Colombian bureaucracy.

Believe me, that’s a good thing. Rental isn’t always such an easy endeavour. Inexperienced foreigners exploring their long-term rental options are quickly disillusioned. Medellín does not cater to foreigners in this respect.

Why?

It comes down to confidence. Renting property on a long-term basis exposes owners to risk. This risk is amplified by dealing with foreigners as they are able to do something locals can’t: pack up and leave; vanish…

The Promise of Purchase and Sale is a contract that is signed prior to the purchase of the property
Long-term rentals for expatriates require the signing of a contract and guarantor.

Some foreigners have further exacerbated tensions by behaving badly, damaging property, and/or using their lodging as a den for debauchery.

To deal with these threats, a frustrating amount of provisions are often required. Unless, as a foreigner, you are willing to either:

  • Pay a hefty deposit sum
  • Lock your money into a CDT (more on this here)
  • Purchase an insurance policy (complicated)
  • Establish a Colombian guarantor (known as a Fiador)

Real estate agents or property owners will likely shut you down during your endeavour for a long-term rental. In fact, many real estate agencies will shut you down even if you offer to pay the entire year contract up front. This has absolutely baffled some other expats I know, and the reasoning is that if you overstay at the end of a year, the process to remove a squatting tenant is onerous. 

What are the other challenges in securing long-term rent as a foreigner in Medellín?

Unfortunately, the process of finding and securing a long-term rental in Medellín is replete with challenges.

In keeping with the customs of Colombia, you can expect unreliability. Throughout the valley, you’ll find ‘Arrienda‘ (for rent) signs listed in front of different properties.

Take down the contact details of 10 of them, reach out, and see how many get back to you…

Not many. In my experience, the figure is likely to be 20-30%.

Even if they do get back to you, be prepared for further frustrations. It is not uncommon for agents to be 20-60 minutes late to their appointments.

A spectacular view in a luxury apartment in Medellín
In Medellín there are excellent options to stay as an expatriate.

If you think I’m being petulant, just remember – time after time, this all stacks up. Altogether, it makes the already arduous job of finding a long-term rental even more overbearing.

Another challenge is finding a reliable guarantor to guarantee the payment throughout the contract. This is known as a Fiador. They need to be Colombian, but not just any. Usually, Fiadors are required to demonstrate a certain level of income and/or prove that they own real estate.

This leads us on to another challenge, if not threat, when trying to secure a long-term rental: getting scammed!

Look on Facebook groups and you will see the extent of the problem. There are countless cases of unsuspecting foreigners handing over money to purported guarantors… only for them to vanish into thin air with their cash.

If anybody asks you for cash advances to reserve properties – be aware that you may be getting scammed.

Even After Possession - Headaches May Continue

While the struggles can be real, they are certainly not insurmountable. Thousands of expats live in Medellin year round and the vast majority of them have figured out a way to make a long term rental contract work. It is by no means impossible. And while you’ll be relieved to finally take possession of your new place, you’ll be presented with new challenges. 

Typically, an apartment in Medellín will generate four bills: 
– Administracion (HOA)
– EPM (public utilities)
– TIGO/Claro (Internet)
– Pre-Dial (Property Taxes)

If you are renting short term (monthly) instead of long term (6 months/1 year), your landlord should include all four of these bills. If you are renting long term, they’ll likely still cover Pre-dial and Admin, but you’ll be on your own for EPM and internet. If you have a Colombian bank account (and the payment system PSE), it is easy to pay EPM online. For internet, your headaches as a foreigner will continue, as you will generally not be able to set up internet in your name unless you have a credit history in the country. Instead, you’ll have to ask a Colombian friend (who hasn’t already destroyed their credit) to get the internet set up in their name, at least until you’ve established a credit history. 

Gringo Pricing in Monthly Furnished Rentals = An Entirely Separate Market

If you are going to stay in Medellín for a year or more, it is worth it to go through all of the previously outlined steps in finding a long-term unfurnished rental and buying the furniture yourself. Why? Because the short term (monthly) furnished rental market will cost you 1.5x – 2x as much (for the same apartment). 

When a landlord, regardless of if they are an expat or Colombian, goes through the trouble of acquiring a place, setting up and paying all bills, decorating it nicely, and offering it for rent – the market is clear – they are able to rent it for much more because they are dealing with all of the aforementioned Colombian bureaucratic headaches for you. 

 

 

Gringo pricing
Sign on the entrance to a nature reserve near the town or Urrao. Note the price difference (20x!) for foreigners compared to locals from the town

When furnished apartments are advertised for rent online, the Facebook trolls line up by the dozens to criticize and cry afoul. 

“That apartment should only cost X!”
” I rented a place in that neighborhood and only paid half that!”
etc, etc. 

But what often fails to be captured by those criticizing the landlord for taking advantage of gringos is that the entire market has been created for, and is advertised to, foreigners. A traditional Colombian family would essentially never rent a furnished apartment for a few months, because they have no need to. They have the family connections, the furniture, and the local know-how to make things work on a long-term unfurnished basis. 

Gringo pricing is charging a foreigner a different price for the exact same product or service and is an unethical practice (see the picture above). But when a landlord charges a premium on an apartment because they have taken all of the difficult steps out of finding lodging in Medellín – this is not the same thing. 

Premium Propiedades has real estate agents that will help you make your dream of investing in Medellín a reality.
Having a real estate agent with experience in helping foreigners can be a great advantage

Conclusion

  • Medellín is a city that truly caters for all budgets and needs. The majority of visitors that come here are positively overwhelmed with the overall value for money that is on offer. That is unlikely to change anytime soon, regardless of demand increasing (rather quickly).
  • For the convenience of short-term rentals, make sure to utilize the tips provided relating to Airbnb. I, myself, have saved a fair sum in applying them. 
  • If you are young, sociable, or eager to immerse in Spanish at home, I’d strongly recommend Compartoapto.
  • Listings tend to be cheaper than on Airbnb as they are catered for Spanish speakers. Also, there is no booking commission.
  • Finally, we know that the process of finding long-term rentals is one that is cumbersome. We would highly recommend that you solicit the services of an established real estate agency. 
  • No one likes to be taken advantage of – and many expats are wary of Gringo Pricing. But paying a premium for the convenience of a furnished monthly rental is a poor example of gringo pricing because it is an entirely separate market that Colombians don’t participate in. 


For any questions about accommodation, real estate, or daily life in Medellín, get in touch today.

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