International Finance

Over the last few years prices of Real Estate in Medellin has been going up steadily in the double digits year over year. This move can be contributed to many different factors but some of the ones that we see the most relate to the economic progress that the city has had. Infrastructure, security and technology projects led by the public and private sectors have fueled the city’s grow and as a result its real estate has not been any different. International interest for Medellin is at an all-time high right now and it is expected to continue growing in the coming years. Global service providers have found that Medellin is the perfect hub for their businesses. Paisas (as the natives from Medellin are referred as) are very talented individuals and overseas businesses are relying on them to run their operations and services hubs from Colombia. On the other hand, small and medium sized businesses have found that Medellin is the perfect location for them to run their businesses from. Good weather, relatively affordable cost of living, strategic location and almost no time zone difference with the US have been attracting small companies to the city of eternal spring. Another interesting trend is the surge of European and American retirees who fall in love with the beauty of Medellin and decide to call the city their perfect retiree home. There are many other factors that are helping the city and its real estate become one of the most lucrative and smart investment opportunities. Here at Grupo Brik we have helped dozens of individuals who have made the decision or who were wondering about the option of investing in Colombia. Once you consider the possibility we want to be there for you to help you through the process. The following information will help you make the right decision and save you the burden and uncertainty that such important process has in a foreign land.

1. 1. Visit the city long enough to feel local: Whether you are planning to live in the property you buy or to rent it out or even to flip it, we both agree that it would be ideal to understand the city like the locals do. Becoming familiar with the city and its warm people should be your number one priority. As soon as you feel local, you will be ready to make a more sound decision than when you were fresh out the boat. Recently one expat from Canada called me to bid on a 300K USD property in El Poblado. When I asked him how many times he has been in Medellin he responded: “only once for a weekend” I immediately recommended to him that he should come back and explore the city a little further. We closed on a property a little later in Envigado for 180K USD and he is in the process of buying a lot in Guatape to slowly build a finca.
   2. Get professional help: You are going to need a lot of help throughout the process. It is important that you find a reputable company or person that has gone through the process enough to help you determine your best options. They can help you with the process of finding the property, the repatriation of the funds and the successful closing. A good company will also be there for you throughout the first months so that you are provided with everything you need.
   3. Establish a budget: This is applicable to buying property everywhere. However when buying overseas you should establish more than one budget. The first should be the maximum amount of money you are willing to pay and the other one should be the minimum life-style quality you are willing to enjoy. Telling your agent what kind of lifestyle you are looking for is far more helpful than the amount of money you are willing to pay.
   4. Talk financials: Make sure your agent is able to walk you through the costs of buying a property. In Medellin it is uncommon for buyers to pay a broker commission but there are some costs associated with closing and title research. In addition If you are in need of a mortgage or financing make sure you mention this early in the process so that you understand what your options are. A good agent who understands the Medellin market but also understand the international financial market will be able to guide you through different alternatives you have when buying real estate in Colombia using both local and international financial vehicles.
   5. Learn about the neighborhoods in Medellin: Location, location, location. Recently we did a tour with a French family who was moving to Medellin. The tour lasted 10 hours (a full Sunday) and we only saw 3 properties in 3 different neighborhoods. This tour was super special because they only had one day in Medellin to look at properties before going back to Panama, where they were staying. What we agreed on doing was visiting each property and spending 3 hours in each neighborhood. We even had breakfast and lunch together to get a sense of what the neighborhood local vibe was like. In Grupo Brik’s website you can always use the section “Sitios de Interes” to browse some of the cool spots around the property you are interested in. This is a good way to get a sense of what the neighborhood has to offer.
   6. Make sure you understand the money transfer strategy: Colombia has very tough regulations regarding AML (Anti Money Laundering) therefore banks have a lot to ask when a large wire transfer is being attempted from overseas. In order to make sure you can deliver on your promise and make your payments as promised, make sure you work with your agent to figure out your money transfer strategy first and then propose your payment schedule. Having your process well laid out first will save you time and money later.
   7. Make sure you have been provided the sufficient local tax law education: Over the last few years Colombia, more than ever, has opened the doors to international investment. As a result, I can say that today we experience a very friendly tax environment for foreigners. However, as you may be accustomed in your homeland, each case is different and it is important that you discuss your situation with your agent. This way both of you can work on the strategy for categorizing this investment in Colombia and making sure you are not heavily taxed later both in Colombia and in your homeland.
   8. Hire a local attorney: The due diligence in buying a property is big enough for you to consider the help of a professional legal counsel. He will make sure that your interests are well taken into consideration and most likely he will work with you through the process of evaluating the property and closing it. We at Grupo Brik count with a team of legal geeks that are available to help you when you are buying a property listed with us. However if you are not you are still invited to give us a call and we are more than happy to help you.
   9. Ask about closing costs: Closing costs are the cost associated with transferring the deed on your behalf. These vary depending on the value declared for your purchase. However make sure that you are well informed about trying to avoid paying too much closing costs when declaring full value because that may become a problem later on when you are selling.
   10. Have an exit strategy: Make sure you know the what ifs of the transaction. Establishing a good relationship with your agent will help you down the road especially if you find yourself in need of selling the property.

I hope that you read all or most of these things to consider when buying property in Colombia. If you have any questions please feel free to email me directly at juan@grupobrik.com or call me at my cel in Colombia 302 290 7597. I want to invite you to check out the available listings that our group has so that you can give yourself an idea of the current market offering. Click here to see the available inventory. We at Grupo Brik are more than happy to help you in anything you need regarding the purchase or sale of real estate in Medellin.