Why I'm no longer bullish on real estate in Colombia.

Updated: Jul 4

I’m going to be real with you, this has been difficult for me to write. I started out incredibly bullish about Colombia real estate, in retrospect largely because of what I’d read about it and based on my own personal experience in the country. But as I have dug deeper below the surface of the information that is promulgated online, running my own financial analyses, the economic value proposition for U.S. retail investors is far less clear in the case of the most commonly pursued buy-and-hold investment strategy. It is not even clear in the case of someone just looking to purchase a vacation home and break-even or realize a small <3% net return by renting it out when they’re not using it; a so-called “lifestyle investment”.


If you are starting your international real estate journey, you likely have seen many of the same resources I did at first. The danger though is many prospective investors stop there and make a sizable investment decision solely based on that. The sources are often thoughtful, appear reasonably credible at face value, and for the most part I imagine they are well intentioned. The issue is there are small nuances that are often omitted, but which would have a material impact on investor returns over a typical long-term real estate time horizon. Those nuances have become clearer to me over time. I’m going down a rabbit hole here, so for now let’s put a pin in that and we’ll get back to it at a later date. For now, Colombia specifically.


My TL; DR about Opportunities in Colombia: Market Sentiment Overweight. Purely from an investment-lens, and not accounting for any emotional / lifestyle factors some buyers desire, Colombia real estate can currently make sense in two situations:

  1. You do not plan to repatriate proceeds back into USD, and/or

  2. You are deploying an investment strategy on a short time horizon (e.g., a property flip, or new construction developer investment).

Basically, purely from a financial perspective, you do not want to be the one holding the asset in a long-term buy-and-hold situation. I am continuing to explore several additional potential investment strategies, but for the time being I’m deprioritizing Colombia.


Disagree with me or know someone who does? Drop me a note. I’d love to hear your perspective and understand what I might be missing. I've been known to be wrong. Many times.


Additional Interesting Articles & Resources

This month I’m sharing a few of the articles which would lead one to be bullish about opportunities in Colombia, but with which I now disagree.

Stay inquisitive. Stay smart.


-Ben

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