6 things everyone should know about buying a property in Medellin, Colombia
Medellín, Colombia used to be on the map for all the wrong reasons. For much of the 1970s, 1980s, and 1990s, the city dealt with violence due to drug trafficking, gang violence, and government unrest, while international tourism and the value of the Colombian peso plummeted.
The city rebuilt itself after the violent climax of the 1990s, slowly becoming an off-the-beaten-path destination for backpackers before emerging as one of today’s best-kept real estate secrets: dollar for dollar, Medellin outperforms countries like Costa Rica. . , Mexico, and other Caribbean nations for its affordability, while also offering a state-of-the-art subway system, a diverse culinary scene, year-round spring temperatures, a thriving expat community, and direct three- and five-hour flights from Miami and New York, respectively. The only question left is,
1. Location matters (but knowing Spanish really doesn't)
Thanks to the influx of backpackers in recent years, Medellín’s neighborhoods have remarkably evolved into foreigner-friendly areas, each with a distinct personality and distinct style in neighborhoods such as: El Poblado, Laureles, Envigado, Sabaneta, and Bélen. While El Poblado certainly leads the way with the number of English-speaking locals, one could get by and live well in any of these places before mastering the language.
if you are investing in a rental property here I would not recommend buying outside of the El Poblado, Laureles and Envigado areas. Between the three, countless quality options abound, and they have so much name recognition for new expats or tourists that demand will always be strong in those areas. Sure, other parts of the city are great to live in, and if the apartment is for personal use, that’s another consideration, but for short- and medium-term cash flow, these three places are always in the highest demand.
If you’re looking at long-term appreciation (10+ years), you might want to consider parts of Belén near Avenida 80 (where a new subway line is being built) or something near the main exit roads in El Centro.
2. Your real estate attorney is your first choice
Hiring an attorney serves multiple purposes. First, it protects you from the natural stresses of an international real estate business: concerns regarding your final choice and the legality of your acquisition are natural and are best alleviated by an experienced expert in real estate legal jargon.
A power of attorney (POA) could be a good idea if you are going to be out of Colombia for much of the sale process, as your attorney will be able to work on your behalf. When I bought my first property in Medellin in 2014, I turned to a local law firm that helped make the process easy for me. At the time, my Spanish was essentially non-existent, but they had English-speaking attorneys who guided me every step of the way.
3. The real estate market works differently from your home country
There is no national licensing system for real estate agents in Medellin, which means that anyone can sell a property. This has led to a proliferation of real estate agencies (estate agencies), with over 1,200 currently in operation.
Many investors may be surprised to learn that it is rare for sellers to have exclusive agreements with real estate agents, so it is the norm that several different agencies try to sell the same property.
This is very different from the norm in the US and Canada, where agents almost always require exclusivity. While it might be assumed that having multiple agencies selling a property could result in faster sales, that’s not really the case here. In Medellín, and especially in the case of high-end properties, it is not uncommon for a property to remain on the market for several years.
4. Make a bank account in your real estate company
To finance your purchase of a real estate in Medellin, it is necessary to open a Colombian bank account.
I’ve heard anecdotal stories of those who have avoided it, but it’s essentially a required step. doing so can be daunting, so it’s a good idea to go with a real estate professional who knows the processes and can make sure you have money in your account long before negotiations begin.
Your real estate team can also help you determine certain details, such as whether to purchase the property in your name or your company’s name, while acting as a liaison between you and the buyer.
I visited a few different banks and finance companies and explored this step in detail.
I have now seen quite a few cases where the buyer did not need a traditional Colombian bank account to purchase a property but did need to obtain a brokerage account.
The purpose of these accounts is to transfer the $ to the country and register it duly in the Banco de la República. The two main companies that provide this service are called Alianza Valores and Acciones y Valores. Get in touch and they will provide you with the contact details of helpful workers at these companies who can help you get started with this crucial process.
5. Don't take it personally: you may be discriminated against as a foreign buyer
Most property prices in Medellin are highly negotiable.
Your real estate agent will research the properties you are interested in and find out how long they have been on the market and how motivated the sellers may be.
That way, you can write an attractive opening offer. It’s no secret that many of the locals assume that all gringos are rich. The seller may try to maintain a higher price if he knows that the interested buyer is foreign.
Having a local agent negotiate a price on his behalf is a crucial part of this step.
I have personally bought four properties here in Medellin (and have my eye on a couple others at the moment) and although I do all the research myself, I always use a local agent to negotiate the price, while hiding the fact that I am a foreigner until after signing the Promise of Sale.
6. Tracking
In order for the purchase and exchange of the property to be legally tight, your lawyer has some final processes to close after the notarial public deed.
The Colombian Registry Department supervises land titles/registrations and it is important that your purchase is reflected in their database (and a later one, the Catastro) so that your claim to the property is supported on all grounds.
Proper registration of your property now will save you all kinds of headaches when it comes to selling.
An important part of this final step is the proper payment of the “notary fees,” which are the closing costs associated with the sale. I recently wrote a detailed explanation of the different costs involved and how to calculate them in the following article:
The Colombian government may be assiduous in auditing foreign investments, but it is much more lax in auditing transactions at the local level, making your choice of lawyer and real estate agent the two most important decisions you will make in this exciting adventure. .
Last words
As you have seen, it is a whole process to acquire a home in Medellin, and it may be too much for you to do everything on your own, that is why we want to help you, write or contact us, we will be happy to help you.
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