Where to Get the Most Value for Your Colombia Property Dollar
Friday, August 06, 2010
Medellín offers a perfect climate, a lush setting...and luxury penthouses for under $130,000
Over my last three trips to this country, I've come to believe that the city of Medellín offers the best overall value for your Colombian real estate dollar. And by "value", I mean that that you don't just get modern, quality properties at a good price. If you choose your neighborhood and property wisely, you'll also get a beautiful treed setting, loads of great restaurants and nightlife, and an upscale environment with a low crime rate.
And the cost of entry is low, with condos in good neighborhoods starting at under $70, 000, and large luxury penthouses going for under $130,000.
Medellín is located in the lush, green Aburrá Valley, and its metropolitan area actually consists of 10 municipalities with a total population of about 3.3 million people. The city sits at 5,000 feet above sea level (1,500 meters) which explains the ideal year-round climate. With days around 80° F (27°C or so) and nights in the 60s, you can't beat it.
People use no heat, and rarely use air conditioning. In fact, I left my windows open during my entire stay--since there are no bugs--and was comfortable day and night.
Depending on the weather patterns, Medellín can have a problem with air pollution, which is more apparent on the valley floor than it is in the higher-elevation neighborhoods like upper El Poblado. Motorists are restricted from driving certain days of the week (on a rotating basis), based on their license plate number.
The city has a modern metro system that carries over 300,000 passengers per day. While the international airport is outside of town, Medellín has a convenient downtown local airport--Olaya Herrera--that serves national flights. Several airlines offer nonstops to the US.
Medellín is the capital of the department of Antioquia, which has a unique regional culture known as the Paisa culture. People are of primarily Spanish descent, with little Native American or African influence.
An overview of Medellín's best sectors
After a few days in town, these are the neighborhoods that I'd focus on if I were buying for myself. A subjective call on my part--and I realize that there are a lot of great venues in Medellín that I haven't seen--but this will give you a good overview of what the city has to offer.
El Poblado is without a doubt "the place to be" in Medellín. It starts low in the valley, and extends about 500 meters in elevation upwards on the eastern side. El Poblado is green, forested, and uncrowded at its higher elevations, and it gets more "citified" as you get lower and go west. The lower part is more walkable, with everything closer at hand...while the higher part is newer and more residential in flavor.
El Poblado has very reasonably prices, with lots of new construction. Yet it's the most expensive and exclusive area in the city. It includes the popular Zona Rosa, known for its restaurants, sidewalk cafes, clubs, discos, and shopping.
Parque Lleras, is a tree-filled park that serves as the centerpiece and most lively spot in Zona Rosa...which in turn is the liveliest sector of the city.
I believe that El Poblado has the broadest appeal of anywhere in this market...and enjoys the widest-known reputation.
Laureles may be my personal favorite neighborhood in the city. It offers lush, tree-lined streets, and a green divided boulevard that goes through the middle of the sector with all of the cafes, restaurants, and shops close at hand.
Aside from the fact that Laureles has a crepe and waffle restaurant, I was particularly taken by its large, round, wooded park in the center of the district, named Parque Laureles. The park is a great place to pass the time, and the cafes and restaurants that line its perimeter are perfect for relaxing and just hanging out.
Another thing I like about Laureles is that it's very "walkable". I believe it offers an optimum blend of clean, treed residential areas and city amenities.
A Medellín market overview
The first thing that I noticed is that properties here are big. After looking at condos in Brazil and even in Santa Marta, Colombia, they're huge. Condos in excess of 2000 or 3000 square feet are fairly common.
And while you'll find expats spread throughout the valley, the vast majority are settling in El Poblado, without question. But I predict that this will change, as Medellín continues to evolve as an expat destination. People's varying preferences will have them settling all over the valley.
In 2009 and 2010, a large number of the expats who came to Medellín came from Panama and Costa Rica, seeking pleasant weather and lower prices. This is a trend that I think will continue as long as Medellín's prices remain as low as they are.
An investor's perspective
Medellín has a healthy real estate market, and has been traditionally active in short-term rentals. But in 2010, it's seeing a dramatic increase in long-term rentals.
Medellín in general (and El Poblado in particular) is not the place I'd go for a quick capital gain right now, from new builds or pre-construction. In fact, it's a bit over-built...to the point where they're restricting the issuance of building permits in some sectors.
If you're going to make a capital gain in Medellín, I'd look to a property where you can add value--a fixer-upper of some sort--or a distress sale. I'd feel comfortable with the liquidity required to turn over one of these.
But on the other hand, both long and short-term rentals are in demand and bringing good returns for property owners; between 6% and 12%, with the average around 8%. Many visitors to the city are opting for the privacy and room of a spacious condo rather than choosing a hotel for their stay.
Medellín properties on the market today
Starting with Laureles, there's a two-story penthouse for sale with 3 bedrooms, 3 baths, and 2046 square feet (190 square meters). It occupies the 7th and 8th floors, has an office, den, a patio, a terrace and balcony...and 3 parking spots. The asking price is just $147,000.
For a high-end, super-luxury option in Laureles, how about a 3446 square-foot penthouse with a huge rooftop terrace, 3 bedrooms, 5 baths, a den, office, patio, and 6 balconies. This property is brand new, with marble floors and oak trim, at $425,500.
In El Poblado, a small 13th floor apartment has 2 bedrooms, 2 baths, and a midtown city view for $63,000. This is about where the market starts.
Also in El Poblado, in a sought-after location near Parque Lleras, is a 2 bedroom, 2 bath apartment that's only three blocks to the park, yet on a quiet street. This new-construction property has an asking price of $139,000.
For a larger home in El Poblado, there's a 3 bedroom, 3 bath condo with 1777 square feet (165 square meters) on offer for only $139,000. It also has an office, a den, and a large terrace surrounded by trees.
The best penthouse deal I found was a 2585 square-foot, two-story apartment with a huge outdoor terrace. It offers 3 bedrooms, 5 baths, a maid's quarters, two parking spaces and a storage unit. In a good location, the asking price is just $128,480...that's only $535 per meter.
If you're considering a second home in Colombia, I think Medellín represents the best value and the broadest appeal for your Colombian real estate dollar. It has the type of properties and amenities best-suited to the North American expat or investor.
For Pathfinder International
Editor's Note: All prices in this alert are pegged to the exchange rate of 1868 Colombian pesos per USD, the rate on July 26, 2010.