Colombia is the best example of a country that has been able to question and change its status quo. A few decades ago, this country was full of bloodthirsty drug gangs and corrupt government officials who were in charge of everything. Now, it is one of the best places to invest in Latin America.
Even though there are still some safety problems, Colombia has the fourth biggest economy and is one of the freest economies in the Americas. Investors, I have good news.
You may have heard that Medellin, Colombia, is the place to be if you want to visit or live there. But when it comes to buying property, Bogota, the city, is the best place to do so.
This huge city is home to more than 13 million people, and if you always look for real estate markets that other people miss, you should give Bogota a chance. There are a lot of great deals on real estate out there, so grab them while you can.
But the really good news is that while you’re there investing in real estate in Bogota, you might as well get the permanent home that’s available. If you want, it could even lead to a second passport.
You see, this Latin American country has some of the most relaxed rules about who can move there. Guess where you can just show up with your ID and buy a house? The right answer is in Colombia.
So, we’ll tell you everything you need to know about investing in Bogota in this book. We’ll talk about everything, from which neighborhoods have the best deals to how the actual process of buying a house in Colombia works.
Let’s get started.
Why should you buy property in Bogota?
You should always look for investments with high returns and a good amount of cash flow. And when it comes to buying property in Colombia, the main city of Bogota is the best place to do so.
Bogota is one of the largest cities in the Americas. Only New York City and Mexico City are bigger. It is a top-notch city. It is the most important city in the area for government, finance, and foreign corporations. Because of this, it draws both locals and people from other countries. And if you want to rent out your Bogota home, they will all need a place to live.
Real Estate in Bogota, Colombia: There are a lot of great deals on good real estate purchases in Bogota. Simply put, the Colombian peso is at its lowest point ever; Colombia’s currency is trash.
This makes it a great place for buyers from other countries to come and start buying things. Even though the peso goes up and down by small amounts, it is weak in the long run.
But until the government realizes how unstable it is to have a currency with such a low value and gives its people what they want—the US dollar—you’ll have plenty of great buying opportunities.
Despite problems with its currency (or benefits, based on who you ask), Colombia has the fourth-largest economy in Latin America. And when you compare its size to the top countries of Brazil and Argentina, it’s not an easy thing to do.
When it comes to getting money from outside the country, Colombia is also a real success story. A lot of it has already come in the last 20 years, but we don’t think it will soon reach its peak. That’s because, from a business point of view, Colombia has a lot going for it. Colombia is:
- Stable. The average GDP growth in Colombia has been 4.25 percent, which is much higher than the average for Latin America.
- A skilled labor group. Per person, the country has more skilled workers than any other country in South America, including Brazil, Chile, and Argentina. Also, the number of its people is growing.
- A CIVET nation. Colombia is also one of the CIVETS, which is a group of six countries that have the most promise to grow quickly.
- easy for a business to happen. For how easy it is to do business, Colombia is ranked 42nd in the world, which might not sound like a lot, but it is third in Latin America.
- Great at making sure its clients are safe. Moody’s rating system now gives Colombia a BAA2 rating. This means that Colombia is one of the best countries in the area at keeping foreign investors’ money safe.
All of these things make Colombia a great place to invest at the moment.
Getting to Know Colombia
The weather in Bogota doesn’t change much because it is close to the equator and is high up in the Andes. In other words, you can’t talk about different seasons in Bogota. It always falls there.
Would you like to live in a place where there are, on average, 220 foggy mornings a year? Then this city could be it. It has a lot more moods and personalities than the happy-go-lucky countries and towns that are the best beach vacation spots in the world.
In Bogota, people live and work, but that doesn’t mean they can’t have a great quality of life. The way of life is probably one of the best things about buying real estate in Colombia or moving there.
So, what can the people of this country, which is known for its coffee, gold, leather, and emeralds, do? If we had to sum up this main city in one sentence, we’d say it’s a place where different things happen. The old and the new, the rich and the poor—all of this makes for a wonderful experience in a place where different cultures mix and glass buildings rise over church squares that look like they’re from Europe.
Bogota, which is the beating heart of Colombia, has a lot to offer in terms of culture and the arts. There are many shows and museums. Some of the best colleges in the area are there as well.
Colombia’s health care system is getting better and better, and each year, thousands of medical tourists visit the country.
Lastly, Bogota is well linked to the whole continent of America because it is almost in the middle of it. New York, Sao Paulo, and Mexico City are only a five-hour trip away.
You won’t have to fly anywhere to buy your favorite brand names, though. Bogota has all the shops and stores you could want, so you can live a truly global life there.
The Best Places to Live in Bogota
Santamaria bullring El Centro: El Centro has a lot going on, but the best deals on real estate are further north.
Let’s get one thing straight: every city in the world has bad parts. Some places have more violent crime than others, but it’s always a good idea to do your study, especially when it comes to countries that are “on the rise.”
The city of Bogota is split into four parts:
- The Southern part. You shouldn’t be there because it’s a poor and dangerous part of town.
- El Centro. The city’s important government buildings and historic buildings are all in the city’s center, which makes sense. This is right in the middle of the city, but El Centro isn’t a great place to invest in private real estate.
- El Occidente. In El Occidente, there are some places where middle-class and wealthy people live. It also has the largest parks and sports grounds in the city.
- The Arctic. This is where most of the new building has been going up in the last few years. You could mistake it for any other big city in the world since it has mega malls, boutique shops, cool cafes, and fancy restaurants all around its high-end apartments and offices for international corporations.
Even though La Candelaria, which is the cultural and historical heart of the city, might seem appealing at first, you should look for affordable homes in safe areas.
You can find deals between $1,300 and $1,700 per square meter if you look in the north of Bogota. The best thing to do is buy an older flat and fix it up to your liking.
Each of Bogota’s main neighborhoods is broken up into sections called “estates.” The best places to buy flats are in the fourth, fifth, and sixth estratos, in places like:
Chapinero. Chapinero is a wealthy neighborhood where most people are from the top classes. Chapinero is home to many famous places to eat and hang out at night, like the popular Zona Rosa.
Chico. This is a wealthy neighborhood, and Parque el Virrey and Parque 93 are its two most famous parks. Chico is a great place to live and spend because it has trendy cafes, salsa clubs that are open all night, and great restaurants. A 75 sqm flat for $160,000 is the most usual deal around here, but you can easily find deals for less money.
Santa Barbara. In Santa Barbara, you can find high-end restaurants, parks that are hard to find, and shops that sell unique designs. Even though it’s not as fancy as Chapinero, it has a lot of charm. Santa Barbara seems to have every kind of home, from English cottages and Spanish palaces to modern high-rises with huge balconies.
Teusaquillo. People from the middle class and the middle-upper class live in this quiet, green neighborhood. But because it is an old neighborhood, many of the houses there are very old and may need major repairs.
Think about what you want to do with the property before you choose a neighborhood. Will you spend part of the year there? Then choose the neighborhood that makes you feel the most at home.
Rent for a few weeks? Find a home that you can rent out for short periods in a touristy area that’s easy for them to get around in. And just so you know, there are a lot of Airbnb possibilities in Bogota.
Want to rent for more than a month? Probably the best thing to do would be to focus on young workers and small families and choose apartments near parks and public transportation.
As a last point, let’s say again how important it is to not take chances that aren’t necessary. If you don’t know much about a neighborhood or aren’t sure if it’s “on the rise,” don’t buy the house. In Bogota, you can find a lot of good deals in safe places.
How to Buy Real Estate in Colombia
The government of Colombia has made it very easy for people from other countries to buy property there. You have the same rights as a person who lives in Colombia. All you need is money and a visa.
If you want to buy property in Colombia, you can do one of two things:
- Invest as a single person. The best thing about this choice is that it makes you qualified for permanent residency. But you won’t be able to have private.
- Invest as a legitimate business. This is the best choice for people who want to buy several homes to rent out. It’s also great for people who don’t want residency but also don’t want their names on all kinds of official papers.
Once you know which way you want to go, it’s time to find that place and start negotiating. And this is where you might be surprised by the culture: most deals are done in cash, and you shouldn’t expect a discount if you pay in cash.
You might be able to get 5–8% off the price you’re being asked, but not much more. Even if the house has been on the market for a year or more, you shouldn’t expect a deal.
If you haven’t lived in Colombia for more than six months, you’ll need to tell the Bank of the Republic that all the money you’re sending there is foreign investment.
This is a very detailed process, and you can’t afford to mess it up. If you do, you could get fined a lot of money or even lose all of your money and not get your residence permit.
We wouldn’t advise you to buy real estate in Colombia on your own in any situation. You should always hire a lawyer, who can help you figure out how to deal with all the rules and paperwork needed to buy a house. And because not all lawyers know a lot about real estate law, you should be careful when choosing yours. We can help you do that.
You could also hire a translator if your Spanish isn’t very good, or you could find a lawyer who speaks English well so you don’t have to bring another person with you. But watch out for “gringo agents” who want to “do everything for you” but charge a lot more.
How to go about buying a home in Colombia
Once you have a property, a price, and a legal way to get your money to the country, you’ll need to take three steps to officially own the property.
All of them can be done in about three weeks, but give it a month to take into account the slow pace of Latin America.
1. Get a Tradition and Liberty Certificate
Ok, so this is a straight translation of the Certificado de Tradicion y Libertad, which has all the information about the property, like who owned it in the past, how it was financed, what work was done, and so on.
At this step, you will need the help of your lawyer. He or she will have to make sure the certificate is real. The lawyer will also make sure that all of the property’s taxes have been paid.
At this point, you will also need to have the house looked at and checked out.
This step usually takes a week and costs you whatever your lawyer charges per hour or day.
2. Write the agreement to buy.
All of the verbal deals up to this point have not been legally binding, but that stops here. If you want to buy the house, you will need to make a Promesa de Compraventa.
It’s a legally binding agreement in which both you and the owner promise to sell you the property.
In the buying agreement, there will be the following terms:
The agreed-upon price in full
- An itemized list of everything that is for sale
- A down payment, which is usually 30 percent
- A rule that says either side can get back 10–20% of the down payment if they back out of the sale.
3. Put your name on the Public Deed (Escritura Publica).
In Colombia, the last step in buying a home is to spend a long time at a notary’s office.
The process is very careful and “proper.” You’ll spend most of your day in the office signing a lot of paperwork.
They might even bring you juice and donuts, so make yourself at home.
By signing Escritura Publica, you will be legally recognized as the new owner of the property.
There are costs here as well:
- 0.15% of the property’s total value (plus VAT) is given to the agent for free.
- 1% of the property’s value will also be kept and used to pay the income tax that the old owner now owes to the government.
- The total tax for the sale is between 3.63 and 4.79 percent of the property’s value. And it’s 1.65% for you, the buyer.
Once the Deed is paid for and signed, it will be sent to the Registry Office and the Cadastre of Lands. The house will then be legally yours. Congratulations!
Taking Care of Your Bogota Property
Beautiful building in Bogota. It’s easier to take care of your Bogota property if you take care of everything while you’re there.
No matter what you do with your Bogota property after you buy it, you will have to take care of it.
And Bogota is different from other countries in that you have to set up your energy bills pretty much on your own. You will either have to be there in person or give someone else the power to act on your behalf.
Set everything up while you’re there and automate as many of your bills as you can.
In addition to worrying about power and water bills, you’ll also have to pay building maintenance fees and property taxes. Your concierge, who is usually very friendly and helpful, is usually included in these fees.
Now, when you buy a house or flat in Colombia, you also buy the land it sits on.
Also, property taxes look at both the value of the land and the value of the house on it. The government then charges a property tax of between 0.1% and 3.30 %. This isn’t much, but it’s still something to remember.
How Hard It Is to Buy Property in Colombia
Buying real estate is never easy, especially if it’s one of your first purchases outside of your home country. When it comes time to make the purchase, you will probably feel unsure, worried, or even scared.
But if you know what the main problems are with getting property in Colombia, you can feel less uncertain and afraid.
Things move more slowly. As you’d expect in Latin America, things move much more slowly in Colombia. Colombians have a more laid-back way of life, and there’s not much you can do about it other than accept it and have realistic standards about how quickly things will get done.
You will trade in foreign exchange. Whether you want to or not, you’ll be selling foreign currencies when you buy a home in Colombia. So, you won’t know the exact price of the property until the last minute because the exchange rate of the Colombian peso will go up and down.
There is no deposit and no title insurance. Colombia is very different from most Western countries because it doesn’t have any of these steps to protect buyers. You will have to send the full selling price to the owner of the property as you buy it, which is crazy. So, it’s very important to have a lawyer with a lot of experience and a good reputation who knows the complicated Colombian real estate rules inside and out.
The problems with short-term rentals. If you want to rent out your Bogota home on Airbnb, either all the time or when you’re not there, pay attention. Some laws say that you can’t rent out your home for less than 30 days, which could stop you from doing so. For instance, your unit must meet strict rules about how to avoid fires. Also, many apartment buildings allow short-term rentals. If 70% of the property owners in a building vote to make short-term rentals illegal, you can’t do anything about it.
You want to sell your property. There may come a time when you no longer want to include Colombian real estate in your collection of investments. Even though it only takes about three to four weeks to buy a house in the country, it will probably take much longer to sell it. The longer it will take to sell a home, the better it is. You should plan on your house being on the market for at least six months.
How to Live in Colombia and Become a Citizen
Buying real estate in Colombia has one big benefit that everyone is talking about. It has a good return on investment and is a good investment chance in general.
This perk is a permanent place to live that you will automatically get if you spend about $170,000 on real estate in Colombia.
The exact number will depend on how much the US dollar is worth in Colombian pesos and how much the minimum wage is in Colombia. To get an exact number, you multiply the minimum wage by 650 and then turn it into dollars. So, the value of the investment in 2021 is $172,707.
You can apply for a Colombian visa after five years, or two years if you have a Colombian spouse or child.
A passport from Colombia is now much better than it used to be. You’ll be able to go to more than 125 countries without a visa, and you’ll also be able to go to Europe’s Schengen zone without a visa.
Another great thing about Colombia is that you can have more than one citizenship. If you want to get a Colombian visa, you don’t have to give up your current citizenship.
But there are some bad things about the process. To become a Colombian citizen, you must first pass a language test as well as tests on the law, geography, and history.
And don’t forget that all guys under 50 have to serve in the military. Keep in mind, though, that you can be turned away for several reasons, such as having proof that you served abroad.
Still, want to get started? Here’s how to get a Colombian business visa (and a passport if you need one after that).
It couldn’t be easier, and the whole process of applying for permanent residence can be done online by sending PDF files of all the paperwork for your new home. So, unlike in many other countries, the COVID-19 outbreak hasn’t slowed down the process of getting a residence visa or becoming a citizen. Getting a visa will cost a total of $450.
Once you get your investment visa, remember that you can lose it if you don’t visit the country at least once every two years.
This is important if you want to get a passport because you have to be a regular resident of the country for at least five years before you can apply to become a citizen.
To sum up, the magic number you need to remember when it comes to the price of the home you want is about $170,000.
Visit this page or ask the Nomad Capitalist team for more information about Colombia’s programs for people who want to live there or become citizens.
NOTA: The amount of about $170,000 must be recorded on the deed or the purchase of the land. Some property owners will try to register a cheaper price so they can pay less tax, but you must make sure that doesn’t happen. Our advice would be to look for a property that costs more than the minimum amount you need to spend and then try to talk the price down. It won’t work the other way around.
Buying property in Bogota is not only a good deal, but it also lets you live there and eventually become a citizen.
Colombia Real Estate – FAQs
How much money do I have to put into real estate in Colombia before I can move there?
To be able to apply for permanent residency, you’ll need to put at least $170,000 into real estate. This amount changes a little bit every year, and it must be written on the buy deed.
Where can I buy different kinds of property in Colombia?
In Colombia, you can buy apartments, houses, business property, farms, wineries, and even rural haciendas. But we’d recommend going for flats in Bogota, which are one of the most liquid types of property and also have some of the best returns. You can get a resident pass if you buy any kind of real estate that costs at least $170,000.
Can I buy property in Colombia through a legal company and get a place to live?
No. In Colombia, only people can buy real estate and get a permanent place to live. In other words, if you invest in a property, you can’t use a company or a trust to ask for residency. You can, however, buy real estate in Colombia through a legal company if you don’t want to live there and want to keep your privacy.
Is it easy to become a citizen of Colombia?
We’d say so. The country wants foreign investment very much, so it has made it easy for you to apply by giving you a clear list of requirements and a simple process to follow. There won’t be a lot of hoops you have to jump through, and you won’t have to spend a lot of time filling out papers.
Where in Bogota is the best place to buy a house?
Depending on what you want, we would suggest looking at homes to the north of Candelaria’s historical center. Not only are those neighborhoods close to the city center, but they also have everything an upper-class person could want, like fancy restaurants and dance clubs that are open all night. We think the best places to invest in Bogota are in the Chico, Santa Barbara, or Chapinero neighborhoods.
Real estate in Colombia is a key investment
If you asked a few of your friends which Latin American country they might invest in, they might say Brazil, Chile, or maybe even Mexico.
We bet that no one would say Colombia, which is a shame.
The rest of the world still doesn’t know how much Colombia has changed since the 1980s and 1990s, which is great news for you.
Yes, there is a bad reputation that you will have to get over. There are still places in Colombia that you can’t go to, like some rural areas and poor neighborhoods in cities. But the country and its towns, like Bogota, have come a long way.
Colombia is now a very modern country with a stable economy, a rising population of happy, skilled, and friendly people, and a growing economy. If you move there, you can be sure that your life will be very good.
We’ve been buying real estate in Colombia for years, but should you?
Since not many people know about it yet, people who can see Colombia’s promise can get a lot of great deals. Who knows what will happen to real estate prices when they have already doubled in the last ten years?
Buying property in Bogota is also a great way to put down roots, get permanent residency, and, if you’re up for it, even get a second passport.
Even though the business world hasn’t fully warmed up to Colombia yet, governments around the world have. In the last ten years, the Colombian visa has become much stronger.
So, do you want to buy a piece of real estate in Bogota to add variety to your investment portfolio and give you access to chances you never thought you’d have?