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Several years ago I decided to make plans to leave the US and retire abroad. I began to sell off my real estate holdings consisting of a restaurant, office building, and a couple of condo's. The US market was peaking and I had no problem disposing of these properties without the use of any realtors. My next problem was where to invest these funds. I looked first at Mexico, then Costa Rica and Panama. I had read so much hype about what a great place Panama was for Americans to invest I was excited to check it out. What a disappointment. Americans everywhere greed ozzing from their eyes, buying everything in site at prices too high for me. I drove the entire length of the country and all I can say is its so ugly and the only nice looking ladies I saw there were imported from Colombia. A great sales job by some vested interests. Their main sales pitch is no land taxes for 20 years on most purchases. These taxes are so low in these countries to be honest it shouldn't be a factor in your decisions. Prices in Mexico and Costa Rica were also much too high for me.
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I decided that Colombia offered the best bargain for what I was looking for. The prices in Cartagena were already bumped up beyond my price range so I decided between Bogota and Medllin. Bogota has good jobs and is always growing but prices there were on average 30% higher than Medellin and I had fallen in love with Medellin so thats where I wanted to invest my US dollars.
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I sold the condo I was living in in Fort Lauderdale for $300,000 and it was about 1000 s.f. so figure selling price $300 per s.f.
I bought my first condo in Medellin for $75,000 and it has 1330 s.f. so about $57 per s.f.
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Jim's apartment in Medellin |
The building in Fort Lauderdale. was 25 years old, taxes were $6,000 per year and monthly maintenance was $310. My new apt. building is only 1 year, the taxes are $700 per year and monthly maintenance is $55.
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As an investment I could get $1800 per month rent from my old apt. The net return looks like this at 100% occupancy. Annual rent $21,600 less expenses of $9,700, net income $11,900 on $300,000 or about 4% return.
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I am getting $1000 per month from the second condo I bought in the same building in Medellin. This condo cost me $95,000 and is 1600 s.f.. ROI on this apt is : Rental income $12,000 less expenses of $1,360, net income $10,640 on $95,000 or about 11% annual return.
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Jim's apartment in Medellin |
Real estate agents here are virtually useless so you can buy from the builders on pre-construction or directly from the owners. You should use a bi-lingual lawyer and they charge about 1%. Years ago when I first brought property in Colombia it was necessary to form a corporation and at least one stockholder must be a Colombian with 1-2% of stock. Now they are encouraging investors and making things easier. Once the sale is completed here you need not worry later that a family member or other party might claim an interest in your property because this is not allowed in Colombia. If they think they have an interest they must express this PRIOR to the closing or they lose their interest. Many owners will want partial payment in dollars in the US or Panama and this works just fine. The sale price of the property is shown as the amount of money paid in Colombia so your taxes will be less and everyone is happy.
A word of caution you must negotiate the rate of exchange from dollars to pesos prior to sending the money to Colombia as the banks here are less than honorable and you could lose thousands of dollars if you don't have this in writing prior to wiring the money, you must wire your funds to Colombia via the Bank of New York to the Republic Bank in Colombia. This is the legal way for you to bring funds into Colombia. Its not difficult and the lawyer can help you
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