Colombia is a paradise for those looking for a place with a warm climate, with good amenities at low prices, to experience endless exotic fruits and let themselves be permeated by their customs. That is why many people look to buy real estate in Colombia.
This has made the arrival of foreigners to the country more and more massive. For example, Ministerio de Comercio Industria y Turismo (the Ministry of Commerce, Industry, and Tourism) in 2023 showed a 34.3% increase in non-resident visitors to the country.
This shows that more and more tourists visit Colombian territory, although there are no official figures of how many of these visitors decide to stay in the country. The figures of digital nomads can give a clue that foreigners prefer Medellín over other cities to live for long stays, and it is estimated that there are approximately between eight thousand and ten thousand in this city.
This leads foreigners to wonder what the best places to live in the country’s main cities, and a study carried out in 2023 by Properati and Trovit showed which are the ideal places to buy a house or apartment, and these were the results.
Bogotá
Neighborhood: Suba.
Medellín
Neighborhood: Laureles.
Cali
Neighborhood: Granada.
Buying real estate in Colombia can be complicated if you are a foreigner. That is why at Medellin Guru, we list the 17 most frequent mistakes foreigners make when buying real estate in this country. Buying a home in Colombia and working as a foreigner with real estate agents can be challenging.
1. Select too quickly
Some foreigners that move to Medellín or other cities in Colombia buy properties quickly. Some of them buy their house even during the first month of living in the country.
Before buying property, we recommend a trial of living in a neighborhood and spending more time researching the market to find out what is available and what you like.
For Pensioners
Living in a quiet neighborhood as Laureles is a good option.
For Digital Nomads
El Poblado has good restaurants, nightlife, and networking spaces.
Furnished apartment rentals are readily available in many neighborhoods in Medellín and other cities in Colombia, which makes it easy to try living in a neighborhood.
Relocating to Medellín or other cities in Colombia and buying real estate are not decisions to be taken lightly. Investing in a foreign country can be exciting and rewarding and involves some risks.
2. Not using the right people
It is important to involve an experienced bilingual lawyer who understands real estate law in Colombia to do a title search and other background checks. In our guide to buying real estate in Medellín, we recommended engaging a real estate attorney. The lawyer will check:
Certificado de tradición y libertad
Which is a history of the property.
Certificado de paz y salvo predial
Which states municipal property taxes have been paid.
Certificado de paz y salvo de valorización
Verifies that taxes related to increases in the value of the property have been paid.
In addition, a real estate lawyer can help to ensure funds used to buy real estate are popularly registered with the Central Bank of Colombia.
In addition, make sure to negotiate legal fees in advance. So, there are no unpleasant surprises.
3. Working with a local real estate agent not experienced with foreigners
It is always important to have people with experience with real estate with foreigners because they are already clear about the step-by-step process and paperwork necessary to make the purchase.
It will also be important to find an agent who can speak English so that the conversation is more fluid, you can understand what they are telling you, and you can ask your questions. The conversation will not be the same if done through a translator.
Medellin Guru has partnered with Real Estate by expatgroup.co to provide real estate services to foreigners and locals interested in buying and selling properties in Medellín and across Colombia.
Recognizing our readers’ demand for real estate guidance, this partnership with Real Estate by expatgroup.co aims to deliver trustworthy and comprehensive real estate services to our audience.
Medellin Guru Real Estate Service
Our reliable partner, a leading real estate company, offers a wide range of services:
- Transfer funds to Colombia
- Legal analysis property background checks
- Sales agreement
- Deed registration
- Legal representation
- Investment visa
4. Property that doesn't permit short-term rentals
Not all buildings in Medellín or other cities in Colombia permit short-term rentals. Short-term rentals (by the day or week) for furnished apartment investment properties are important for higher returns.
You have to know
Rentals of less than 30 days in Colombia have specific laws that apply, making them illegal unless the building and the unit meet a checklist of requirements from licenses to fire extinguishers.
According to the law
Colombian law states that 70 percent of the owners in an apartment building can change the “reglamento” (bylaws) of a building to their liking.
5. Not properly registering funds
Funds for investing in Colombia’s real estate must be properly registered with Banco de la República (Central Bank of Colombia). This is normally done with Formulario #4 (Form #4) as part of the purchase process.
Not registering funds properly will cause problems with taxes, investment visas, and repatriation of funds in the future. Experienced real estate lawyers will know the correct process to register funds so you don’t encounter issues.
6. Select a new construction
New construction tends to be substantially more expensive than older properties. We recently surveyed new apartment pricing in Medellín, and in that blog, you can look in greater detail at the prices in the different neighborhoods in Medellín.
However, the following table shows the price range per square meter of a new apartment in Valle de Aburra (Medellín and nearby places).
These figures were taken from la Cámara Colombiana de la construcción en Antioquia (the Colombian Chamber of Construction in Antioquia) and published by Semana Magazine.
According to the above, the cheapest place to find a house in Valle de Aburrá is Caldas, and the most expensive is Envigado. However, keep in mind that ranges may vary depending on the neighborhood you choose to live.
However, it is possible to find older properties (10 to 15 years old) that can be purchased for up to 50 percent less per square meter than new properties.
In addition, some older properties may have wood flooring, higher ceilings, bigger balconies, and other desirable features. Some older properties may need some remodeling, but the bottom line is that they can be much lower priced than new properties.
7. Not finding out the true value of a property
There is no Multiple Listing Service (MLS) in Colombia. If you are buying or selling, this can make it challenging to find comparable property sales and understand market prices.
It is important to get expert advice on the true market value of an apartment or casa (house). Some properties can be over-priced compared to similar properties.
Also, there can be some hidden factors that can affect the price and future resale value. This can include administration fees (HOA fees), taxes, rental restrictions, new construction in the area, and trends in the real estate market.
8. Not understanding the risks
Investing in real estate can be lucrative, but it is important to understand the risks. We have a separate article examining the risks of investing in real estate in Colombia.
Colombia´s real estate market has experienced strong house price growth over the past several years. From 2011 to 2018, During those years, they grew like this.
However, for 2023, the figures are not positive because, according to Camacol (Cámara Colombiana de la Construcción), in 2022, 139,000 homes were sold until September, and this year, 65,800 were sold for the same month.
On the other hand, it is important to consider some risk factors when investing in Real Estate.
Money
In recent years, the dollar and the peso have shown drastic rises and falls.
External factors
Political issues, pandemics, wars, or other issues may affect the market.
Interests
The increase in interest on bank loans can rise or fall according to what happens in the market.
Legislation
Changes in the legislation of each country that may directly affect the purchase and sale of homes.
There are several other risks of investing in real estate covered in our article about the risks of investing in real estate in Colombia.
9. Not understanding the estratos
In Colombia, residential properties are ranked on a 1-6 socioeconomic scale (with 6 being the highest). These are known as “estratos”. The expensive (for Colombia) estrato 6 properties being touted by some real estate agents focused on expat customers – like in El Poblado in Medellín or Zona G in Bogotá – are not the typical housing for Colombians.
Below, you will find how many people in Colombia for 2021 belonged to the 6 estratos. Kantar provided these data and are the most recent figures available to date.
If you buy a property in estrato 5 or 6, remember that when it comes time to sell, a limited pool of buyers in Colombia can afford these expensive properties.
However, if you are buying a rental property, location is key. Well-located buildings in popular areas for expat tourists, like El Poblado in Medellín or Zona G in Bogotá, can do well as rental properties or be offered on Airbnb.
10. Try to impres with the cash
Most real estate deals in Colombia are all-cash deals, as Colombia’s mortgage market is tiny. So, sellers won’t be impressed with your all-cash deal.
Only about 3 percent of the adult population in Colombia has a mortgage. In addition, mortgages are more common for new construction projects in Colombia as builders help arrange financing, and mortgages are less common for used homes.
In United States
Only about 40 percent of homes are free and clear of mortgages.
In Colombia
Over 90 percent of homes are free and clear of mortgages.
11. Not giving enough details
It is important to provide your purchase requirements to a real estate agent so they can find properties.
It is important to let the real estate agent know the following details:
Budget
Neighborhood
With view or not
Apartment, house or farm
Number of bedrooms and bathrooms
Ideal size of what you are looking for
With insufficient requirements, much time can be wasted looking at many properties. Also, Colombia has no lockboxes with keys for viewing properties. So, it can take time to arrange to get keys to show properties.
Also, remember that real estate agents who show you properties for free are paid by commission, not tour guides.
12. Not understanding sales time
It can be relatively quick to buy real estate in Colombia. I have met several expats who bought properties in Colombia about four weeks after finding a place.
Below are some figures showing how housing time has changed in Colombia recently.
13. Construction time is long
One risk of buying property in new development projects in Colombia is that some projects may take longer than originally planned, and a few never complete.
For example, I am aware of some apartment buildings in Medellín that took three to five years to complete when the original plan was two years.
In addition, I know of a few property refurbishment projects that took double the original planned time (two years instead of one year). Don’t trust the completion dates touted by property developers or real estate agencies in Colombia. In many cases, the promised dates are optimistic.
14. Believe in verbal offers
A buyer is not protected with a verbal offer from a seller. After you have a verbal agreement on the price and terms for a purchase, your lawyer will draw up a purchase agreement, known as a “promesa de compraventa”.
A “Promesa” is a binding contract where you state the intention to buy or sell at a given price, and the seller states the intention to sell.
Also, keep in mind that Colombians are sophisticated negotiators. So, it is common for Colombians to renegotiate right up to signing the “promesa de compraventa”, at a notary. You can also make changes at a notary before signing the purchase agreement contract.
15. Don't understand how to buy it in the country
These are two important notes for foreigners to know when buying real estate in the country. Colombia has NO title insurance and NO escrow (except for new construction properties).
So, it is very important to hire an experienced lawyer who understands real estate law in Colombia to do a title search and other background checks.
16. Not knowing about visas
To purchase property in Colombia, foreigners are only required to have a valid passport; it is not necessary to have a visa initially. Some foreign property owners in Colombia might be eligible for a real estate visa depending on the amount of money invested and the purchasing process.
If you are looking for Real Estate in Colombia, you must consider whether you want to apply for a Real Estate Migrant Visa through this investment so you can stay more than 180 days a year in the country or start the path to reside in Colombia permanently.
In brief, the requirements are:
Having purchased a property for more than 350 SMMLV in 2023.
Being the exclusive owner of the property.
Having the Freedom and Tradition Certificate.
Having the Certificate from the Colombian Central Bank.
After having this migrant visa for over five years uninterrupted, you can apply for residency. Below, you can learn more about the investment and resident visas.
17. Thinking that El Poblado is cheap
Some real estate agents have commented that foreigners have unrealistically low budgets for real estate in Medellín and other cities in Colombia.
For example, one foreigner thought buying property in El Poblado was possible for only $15,000 USD. But El Poblado is the most expensive neighborhood in Medellín, and no properties are available for that low price.
However, finding some properties in Medellín for $15,000 USD or even less is possible. But these properties will be located in low estrato, in neighborhoods that would not suit most foreigners. Also, the quality of such properties would be less than most foreigners are accustomed to.
It is possible to educate yourself online about current property prices in Colombia.
Are you looking to buy or sell real estate in Colombia?
Medellin Guru has partnered with Real Estate by expatgroup.co to provide real estate services to foreigners and locals interested in buying and selling properties in Medellín and across Colombia.
Recognizing our readers’ demand for real estate guidance, this partnership with Real Estate by expatgroup.co aims to deliver trustworthy and comprehensive real estate services to our audience.
We chose to collaborate with Real Estate by expatgroup.co for buying and selling real estate services for several reasons:
- Real Estate by expatgroup.co is recognized globally and is a familiar brand for foreigners.
- As one of Colombia’s largest realtor companies, Real Estate by expatgroup.co has extensive coverage throughout the country, enabling it to serve various locations in Colombia.
- They boast a robust team of agents, many of whom are bilingual in English and Spanish.
- Real Estate by expatgroup.co ensures fair pricing through a thorough Comparative Market Analysis (ACM).
To access this real estate partner service from Real Estate by expatgroup.co, click the button below, complete a brief form, and receive a complimentary consultation offering insights into the local market, current pricing, and tips for buying or selling properties.
Medellin Guru Real Estate Service
Our reliable partner, a leading real estate company, offers a wide range of services:
- Transfer funds to Colombia
- Legal analysis property background checks
- Sales agreement
- Deed registration
- Legal representation
- Investment visa
Medellin Guru's guide to buying, selling and renting apartments and choosing a neighborhood
On the Medellin Guru website, we have a comprehensive and up-to-date guide to buying, selling, and renting apartments and choosing a neighborhood in Medellín found in several articles, including:
Buying and Selling Apartments
- Medellín Real Estate: 2023 Property Buyer’s Guide for Foreigners
- Selling Real Estate in Colombia: A Guide to Selling for Foreigners
- Mistakes Foreigners Make When Buying Real Estate in Colombia
- Current Costs to Buy New Apartments in Medellín
- Rent vs Buy: Downsides of Renting and Buying Property in Medellín
- 13 Things Real Estate Agents in Colombia May Not Tell You
- How to Obtain a Colombia Investment Visa
Renting Unfurnished Apartments:
- Apartment Rental Guide: Renting Unfurnished Apartments in Medellín
- Guide to Finding Unfurnished Apartments and casas in Medellín
- Guide to Overcoming the Fiador Requirement in Colombia
- 2019 Unfurnished Apartment Rental Costs in Medellín
- 6 Inexpensive Neighborhoods for Unfurnished Rentals in Medellín
- Furnishing Apartments: A Guide to Furnishing Apartments in Medellín
- Apartment vs Casa (House) Rentals in Medellín: Pros and Cons
Renting Furnished Apartments:
- Furnished Apartment Rental Costs in Medellín – 2019 Survey Results
- Guide to Finding a Furnished Room for Rent in Medellín
Choosing a Neighborhood in Medellín:
Also, we have several articles that can be used to help foreigners choose a neighborhood in Medellín:
- What are the Safest Neighborhoods in Medellín and the Aburrá Valley?
- 5 Best Neighborhoods in Medellín: A Guide to Choosing a Neighborhood
- 9 Downsides of El Poblado: Living in Medellín’s Expensive Neighborhood
- Estratos: A Guide to Understanding Estratos in Colombia
- El Poblado vs Laureles: Which is the Better Neighborhood to Live in?
- El Poblado vs Envigado: Which is the Better Neighborhood to Live in?
- El Poblado vs Sabaneta: Which is the Better Neighborhood to Live in?
- El Poblado vs Belén: Which is the Better Neighborhood to Live in?
- 2018 Unfurnished Apartment Rental Costs in Medellín in 5 Neighborhoods Popular with Expats
- 6 Inexpensive Neighborhoods for Unfurnished Rentals in Medellín
The bottom line: Mistakes foreigners make when buying real estate in Colombia
The bottom line is to do your own due diligence before buying real estate in Colombia. Also, it is important to understand the top mistakes foreigners make when buying real estate in Colombia. You can learn from the mistakes foreigners have made in the list above.
Also, it is very important to make sure you understand how the real estate market operates in Colombia, which we previously covered in our property buyer’s guide. Otherwise, you may be taken advantage of as a foreigner.
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Editor’s note: Updated December 12, 2023, with new images and data.