What is the reality of renting property here?

expatriate says on Jul 28, 2008, 17:45:

I have seen the rent more like 5-7%, with the owner paying the taxes. As long as the political situation is the same, property values should go up with inflation.

Furnished apartments are more expensive, but they are usually short term arrangements, have high overhead, and are not rented out all of the year.

Most people that can afford 7,400,000 per month can afford to buy a place, and in the Latin culture, owning a place is a high priority, so I think it might be hard for you to find a renter in that price range.

The advantage in Colombia compared to our house in Arlington, Texas, was that we were charging 12% annually, (about $1000 a month), but we had to pay $3600 in property taxes and $600 in insurance, plus maintenance, leaving us with an income of about 5% yearly. Also, the house was not appreciating.

You better take care of me Lord, if you don't you're gonna have me on your hands.

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bfree says on Jul 28, 2008, 20:02:

Rents fluctuate depending on the location.expatriate correctly points out that furnished apartments are more expensive, are mostly short term rentals, have high overhead and are not always rented for the full year. It is a pity that more people do not understand this. Another problem facing those who rent furnished apartments is the cost to replace or fix damaged items. My girlfriend rents out her apartment in Bogota and her costs keep going up. She has been renting for almost 3 years and she has not increased her rent.

I think some people who rent try to take advantage of people in the short run. But if you are smart about it, I think is more profitable and better business sense to look at things in the long run. My girlfriend's apartment is usually fully booked 2 months in advance.

She has a number of things working for her.
1. She really enjoys working with foreigners and is always taking classes to learn English.
2. She likes to please people and genuine about her feelings.
3. The rent she charges is reasonable and is lower than all of her competition (there is room for her to make a profit without getting greedy).
4. Lastly, she identifies with many people who rent from her and has even had them over to her place for dinner.

Yes this is a shameless plug but it also a rubber stamp on how you can succeed in renting your place in Colombia without being greedy!

Martha's apartment http://welovebogota.com

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tejasmarcos says on Jul 28, 2008, 20:05:

expatriate - my home in fort worth is not appreciating either, but the city seems to think so as they increased my values $18,000 more this year. bastards...

trying to walk a straight line on sour mash and cheap wine...

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Brians says on Jul 29, 2008, 06:28:

I actually agree with Gringo Spy. I would never buy a property with a 7% yield level. I only bought because I need to invest there thus look at it a little differently and thus lucked out and also lucked out with the appreciation. I personally would like to see yields of 10% and would not advise Colombia as a good investment now. However if you plan to reside there you need to have money invested there and real estate is the safest option in my estimation.

12VOIP.com gives free calls to Colombia. Brian

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tejasmarcos says on Jul 29, 2008, 08:16:

funny. that is the first time i have heard CAP associated with residential property investments in a long time.

SPY - and where do you normally find these 9.5% CAP properties you speak of? i assume you are talking about residential properties as the going rate for commercial (USA) has been in the 7% range for the last several years (4-5% on the west coast/USA).

- the capital gain was the big motivator in Colombia until the recent cool off. i've heard of investors doubling or tripling their money in just a few years here. that is uncommon elsewhere.

trying to walk a straight line on sour mash and cheap wine...

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