Colombian Real Estate – Why So Cheap?
I recently purchased a penthouse apartment in Cali, Colombia for $400 USD per square meter.
That may mean nothing to you, unless I provide something to compare. Let’s look at some worldwide price averages…
- Italy = $8,000 per square meter
- France = $10,000 per square meter
- US = $17,000 per square meter
- UK = $23,000 per square meter
- Hong Kong = $25,000 per square meter
- Monaco = $50,000 per square meter
(All data taken from Global Property Guide)
So, I will repeat what I said in the beginning… I recently purchased a penthouse apartment in Cali, Colombia for $400 USD per square meter.
How can that be?
That is a MASSIVE price difference.
You literally cannot build the apartment I bought for the price I paid. I bought for less than the cost of construction… and that’s not even including the value of the land it’s sitting on.
And guess what’s around the corner from the apartment?
There’s a brand new Marriott hotel, an Intercontinental Hotel, and several five-star boutique hotels. There’s also lots of high-quality restaurants, coffee shops, parks, and everything else you’d want.
What I’m saying is that it’s a nice part of town and major companies are dropping serious money there.
I could go on and on about the other exciting things happening, but let me show you the apartment. We just started demo, so this is what it looks like, as of last week:
Demo underway.
But… my business partner owns the apartment right below this one. He already remodeled his and we are doing the exact same design. Here is what his looks like:
Kitchen.
One of three bathrooms.
One of three bedrooms.
One of three bathrooms.
One of three bedrooms.
One of three bathrooms.
One of three bedrooms.
Balcony overlooking the street with restaurants right around the corner.
Kitchen and dining room.
Living room.
Kitchen, dining and living room pano shot.
Back laundry room, with lots of extra space for storage or an office.
Pretty nice, right?
Oh, and this apartment yields real returns. With short term renters, yields can go well above 20%. (But that’s a lot of management and work.)
With long term renters, you’re looking at returns between 10% and 12%.
And guess what happens in a couple years when the outside world discovers this place?
Property prices are going to go up. And as property prices go up, rents will go up… which means our yield will go up as well.
So, until that time comes, we’re still going to make great returns on these properties.
And even if the property prices never go up, we’ll still get paid.
It’s an excellent investment!
So, why is Colombian real estate so cheap?
Perception.
I’m not going to pretend that Colombia is some perfect country with unicorns and gold plated streets.
But, it’s also not the hell-hole everyone thinks it is.
It has great weather, beautiful nature, friendly people, and a tremendously bright future ahead.
—
By the way… I’m going to be investing A LOT more in Colombia (and other countries as well) and I’m taking other investors with me.
Here is the selfish truth: My investments will be more successful with other people investing with me. I can only get so much done on my own.
Other’s success will make me more successful, as it often takes a team to make real change.
Hi Cody!
would you say it is a good idea to buy colombian peso right now in order to participate in the evolution of columbia?
is it a good investment?
Wow this sounds fantastic. I hope to get involved Cody/
Cornell is looking forward to weekend!
Hi Cody,
I just discovered your website today and have found your posts really interesting. This one confuses me though. I bought a newish house in a great area of Las Vegas for $830/sq meter a few years back, it’s estimated value today is about $1100/sq meter. You quote Global Property Guide’s US average of $17k/sq m. That’s a huge discrepancy. Am I missing something?
The property guide is the average of major cities (like downtown areas that have high premiums).
Not just the peso… perhaps investments denominated in the peso, like real estate.
Hi Cody,
In a previous article I read that interesting countries to purchase real estate or land are Turkey, South Afrika and Columbia. I recently revisited Morocco and has changed so much since I’ve been there 6 years ago. Since I’m interesting in buying some property outside of Europe I checked the prices and the last 10 years the price per square meter has risen. What is your take on Morocco? Do you also consider this a country to invest in?
Kind regards,
Dick
Definitely on my radar. You can pick up some unbelievable Riads and other estates for cheap right now… but I’ll have to do more research.
Hello Cody,
Thanks for all the inputs and information in your blogs.
I am an indian citizen but lived and worked in US for about 10yrs and knows how the western world works
with respect to india.
India being an emerging country, i have seen lot of profits in real estate for the last 20 yrs and my investments
gave huge runups and profits ranging around 50 to 100 percent.
Currently commercial properties in india are fetching good rental values ranges from 15 to 20 percent in southern
part of india and cities like visakhapatnam, hyderbad etc.
I am also interested to explore the possible options of commercial properties between 100 to 200k USD in any
country you have listed out. Please do let me know the probable returns i can expect in a 10 yr life span.
Thanks,