TLDR? Foreigners can buy property in Medellin if they want to!
If you’re thinking of buying real estate in Medellin, Colombia, you’ll be glad to know that foreigners are legally allowed to do so.
However, you should know a few things to avoid any surprises or legal issues down the road.
Keep reading, and we’ll outline everything you need to know about buying property as a foreigner in Medellin.
Why You Should Buy Property in Medellin
If you’ve come to fall in love with the city of Medellin and want to buy property here, you’re not alone.
Many foreigners are interested in investing in Medellin’s real estate market. Medellin is an appealing destination for retirees, digital nomads, and anyone looking for a change of pace. Here are a few of the many reasons why:
In addition, foreigners can qualify for a residency permit, depending on the size of their investment. Just note that the purchase needs to be in your name and not a company name to qualify for the visa.
All you need is a valid passport and proof of sufficient funds to cover the purchase.
What to Know Before Buying Real Estate
Okay, so you’re in. You want to buy real estate in Colombia. Good for you!
Before you do, there are a couple of things that you need to know. Let’s check out a few things to be aware of before you rush into purchasing
Foreigners Can’t Open Bank Accounts in Colombia
One of the first things you need to know is that foreigners without a Colombian ID cannot open bank accounts in Colombia. Plus, most banks won’t approve a mortgage loan for a property in another country.
This means that if you want to buy a property in Medellin, you will have to use cash. In order to take out cash, you can transfer the funds to a brokerage account that can wire the money to the seller.
This is the safest way because you can only fly with up to $10,000 USD in cash. Plus, bringing that much cash with you is not advisable.
It’s not recommended to wire your funds to a friend, spouse, or the seller directly, as this could create legal issues down the road.
Once you have transferred your funds for the purchase, the money must be registered with the National Bank of Colombia (Banco del República).
Unlike the United States, there is no title insurance or escrow in Colombia. This means that it is even more important to work with a reputable lawyer in Medellin.
A lawyer can help you verify that the seller is the rightful owner of the property and there are no outstanding liens or mortgages on it.
The lawyer will also help you acquire and verify a Certificate of Tradition and Liberty or ‘Certificado de Tradición y Libertad.’ This certificate will provide all of the histories on the property, including
Your lawyer will verify the property taxes are paid and any other unpaid debts related to the property.
If everything checks out, the lawyer will also prepare a Promesa de Compraventa (Promise of Sale) that outlines:
Down Payment amount.
Settlings of mortgages and liens.
Declared Property Values
Taxes and HOA costs.
Be aware of the penalty clause in the contract as well. This can cost the buyer or the seller 10%-20% if they back out of the sale. You’ll need to be ready to cough up the cash when the time comes.
If the lawyer catches any red flags, then it is best to walk away from the deal.
Pay Taxes and Fees for the Property
Be prepared to pay different fees and taxes when closing on the property. You’ll need to pay a percentage of the total value of the property to:
A tax fee for the registration of the property.
A government tax.
A fee of the property’s value for the notary.
A fee of the property’s value for the real estate agents.
Once the fees and taxes are paid, the final step is to sign the Public Deed or ‘Escritura pública.’ You will need to pay a notary to produce this document.
After signing the deed and transferring the remaining funds to the seller, you will be the property’s new owner!
If everything goes smoothly, your lawyer will register the property in your name at the registry office. Then a new Certificado de Tradición y Libertad will be issued, and the process is complete!
Now that you know what to expect, you can start searching for the perfect property in Medellin! If you are still on the fence about whether or not to buy, keep reading as we explore why you should buy property in Medellin!
Perks of Buying Property in Medellin
It doesn’t matter what country you are from; buying a property is always a huge investment. But, there are some great reasons to buy a property in Medellin that you may not have considered!
The most obvious reason to buy property in Medellin is for investment purposes. The city has been experiencing rapid growth over the past few years, and this is only expected to continue.
This means that buying a property now will likely result in a healthy return on investment down the road. In addition, with tourists flocking to the city, there is also the potential to rent out your property and generate some extra income!
Another great reason to buy property in Medellin is for the lifestyle. The city has so much to offer residents, including:
Not to mention, the cost of living in Medellin is very affordable, especially when compared to cities like New York or London. So, you can live a comfortable life without breaking the bank.
Renting vs. Buying
If you’re considering whether to rent or buy a property in Medellin, you should definitely opt for the latter. Not only will you have the potential to make a profit down the road, but you’ll also have the security of knowing that you will always have a place to live.
You can also choose to rent it out when you are not using it and generate some extra income. Just be sure to factor in the cost of maintenance and repairs when calculating your return on investment.
If you want to secure a residency visa to live in Colombia, buying property is one of the easiest ways. By getting the visa, you can invest in other investment opportunities. In addition, you can leave Colombia as often as you want without worrying about your status.
Keep in mind that if you leave Colombia for more than 2 years consecutively; you lose your residency visa and have to reapply.
Things to Consider Before Buying Property in Medellin
It’s important not to rush into any real estate deal. So, let’s take a look at some of the things you need to consider before making such a big purchase.
One of the most important things to consider when buying property in Medellin is the location. After all, you want to be sure that you invest in a safe and desirable neighborhood.
The best way to narrow down your search is to decide what type of lifestyle you want to live. For example, do you want to be where you can walk to all the best restaurants and bars?
Or, would you prefer to live in a quieter neighborhood that is still close enough to the action?
Lastly, do you plan on renting out your property? If so, choose a popular location with tourists, such as El Poblado and Laureles.
Of course, you will also need to consider your budget when buying property in Medellin. The good news is that there are plenty of affordable options available, even in the most desirable neighborhoods.
Just be sure to work with a reputable real estate agent. They can help you find the best deals and steer you clear of any potential scams.
The Bottom Line: Buying Property in Medellin Is a Great Investment
Buying property in Medellin is a great way to invest in your future and secure a residency visa. Take advantage of the 90-days you can be in Medellin without a visa. This will give you time to check out different neighborhoods and real estate listings.
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