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Apartment blocks are growing like weeds in big Colombian cities. More and more Colombians are able to afford them thanks to government subsidies to lower income families. Wealthy investors buy scores of more pricey units which they then put on the rental market. Despite the growing supply, there is still a housing shortage and prices as well as rents continue to climb with no end in sight despite some experts' claims that the real estate bubble will soon burst.
If you are interested in buying a new condominium apartment or town home in Colombia, your first step is to pick up one of the free magazines listing all the new constructions on offer, or consult the online versions ( Ex: propiedades.com.co for the Medellin area, metrocuadrado.com for Cali and Bogota, joomag.com for Cartagena ), These are in Spanish, of course. The other way is to physically attend one of the many real estate fairs where all local builders have booths. There are no laws preventing or restricting foreigners from owning real estate in Colombia.
Prices in major cities can go from as little as 35 million pesos (19,444 USD on 2012/09/29) for a subsidized unit to over 300 million pesos ( 166,666 USD ) for a luxury condominium in the best area, with 150 million pesos for one in a medium class neighborhood. Typically the unit will be unfinished, which means concrete walls and floors, and not even the most basic fixtures. Thus, count on spending around 20 million pesos ($11,1111) to properly furbish even the cheapest unit. Parking spots are rarely included, and can cost 10 million pesos ($5555) or more. Finally, your closing costs can be around two million ($1111). Finally, there are your monthly community fees, which will probably run you 150-200 ,000 pesos a month. So the cheapest unit can actually require double the sale price before it can be in move in condition.
Many of the cheaper apartments may claim to have three bedrooms even though the total floor space is only 45-55 square meters. Even at 65 meters, those three bedrooms will be almost closet sized, so if you cannot afford the larger units, at least try to get one that only has one or two bedrooms. They are harder to find because most Colombians families include children and want the extra rooms (which is what you have to bear in mind if you want to put the unit on the rental market). Studio / bachelor apartments are the least common.
If you are not interested in all the work involved in buying a new unit, then the best sources for the secondary market are the major Colombian newspaper classifieds, such as El Colombiano (elcolombiano.com) for Medellin, El Tiempo (eltiempo.com) for Bogota, El Pais (elpais.com.co) for Cali, and El Universal (eluniversal.com.co) for Cartagena, among others.
As mentioned earlier, foreigners enjoy the same rights as native Colombians in purchasing real estate, but financing could present a problem. You cannot finance your property through your bank in the homeland, and no Colombian bank will lend you money unless you have a credit history in Colombia. Note that opening a Colombian bank account requires that you have a “cedula” or national identity card (see my article on banking in Colombia), which you can obtain if you are married to a Colombian citizen or have lived legally in the country for a period of time. If you do arrange local financing, know that interest rates are likely much higher than those back in the old country, and you will have to put at least 30 percent down. That said, most foreigners do 100% cash transactions, and since you can't legally bring a suitcase full of cash into the country, they resort to wiring funds directly to the real estate agency and / or seller from their bank abroad. Needless to say, be sure everything is airtight before handing anybody vast sums of money!
The best suggestion I can make is that before you invest in real estate in Colombia, come to live here in a rental property, get established, then after you have the cedula and bank account, go ahead and buy into what is undoubtedly the best investment here!
Next installment in this series: Renting in Colombia.