Like many things in foreign countries, Colombia housing searches take on a life of their own. You have to constantly bear in mind that the way we think or do things may seem universal when we’re at home, but this doesn’t hold true once you cross a border.
If you’re entering a new culture with a different language, you’ll find the differences multiply until you begin to feel you have no cross-reference at all. See this as an adventure, a prelude to the trip itself!
You can start by using the Internet to look at properties and their costs; here are a few words of advice on that front:
Once you’ve found some properties you’re interested in, send an email to indicate your interest. Most listings will have a form for this purpose, addressed to the owner. The owner will probably never see this email as it will go straight to a real estate agent.
Here are a few tips to keep in mind:
There are a lot of sites to work your way through, but here are some of the best:
The last two will require the use of a translator app such as Google Translate (unless you speak Spanish, of course).
Prices are all over the map, depending not only on which city you are interested in but in what part of town. Needless to say, Bogotá, with its high demand, is commanding a larger price than Medellin. Places like Cartagena and the Caribbean coast feature a large number of holiday rentals for tourists rather than expats, so these are more expensive as well.
There are unfurnished one-bedroom apartments as cheap as $150/mo in Medellin and as expensive as $375 in Bogotá. There are fully furnished three-bedroom apartments from $400/mo to $1,000/mo depending on city and location.
However, this is often just the rent. There can be HOA fees (administration) of $35 on top of that, and utility costs of $100 - $200 per month, based on usage. This will include gas, garbage, electricity and internet.
Parking may be extra as well. You need to ask if there is a hot water heater included; if so it will deliver about 5 minutes worth of hot water.
1.5 hours outside of Bogotá I found a beautiful farmhouse, with 4 bedrooms, furnished, for $400 per month. I also found a 6 bedroom villa with extensive property, suitable for business management meetings, for only $200,000 per week! That included servants and transportation. Caveat emptor is the guiding principal of the Americas.
The good news is that there are no restrictions for foreigners buying property in Colombia. The process is relatively straightforward and some say you don’t need a lawyer. (The lawyers don’t agree.)
Essentially, a title is procured and researched, a new title drawn up and notarized, a transfer tax is paid and the deed is delivered. Due diligence ensures the property is free of encumbrance. The cost of this is between 5% and 6% of the property value, shared between buyer and seller, with seller paying about 2/3.
The bad news is that mortgages are difficult for non-residents to obtain. Banks like Citibank will be more familiar with your needs and hopefully more helpful. You will need a local bank account with a history of at least 6 months, and the property needs to be a principal residence.
Property prices, like rentals, range broadly, depending on city and location. A 70 m² apartment in Bogotá will cost about $135,000, while a 250 m² will be in the $750,000 area. Better areas will cost about 20% more.
Places such as Santa Barbara, south of Medellin feature apartment properties from $163,000 for 60 m² to $445,000 for 200 m².
Property values have been increasing steadily for the last 10 years and there is now talk of a bubble forming.
Property taxes are in the 3 to 3.5% range of the cadastral property value, as set by the municipalities.
Be aware that there is a 33% tax on rental income to foreigners!
This report only scratches the surface of the property business in Colombia. For a thorough examination of property investment and values in Colombia I highly recommend the Colombia section of the Global Property Guide.