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Cali Offers A Top Investment Opportunity In Colombia

Rental Returns Of More Than 20% Per Year? Yes…In This Top Property Investment Market That Nobody Is Paying Attention To (Yet)

Early this morning, while I was out taking photos of Cali, Colombia, I came across an Italian bakery on a corner in the El Peñón neighborhood. In a provincial style, it had a heavy wooden door, standing open, and old-fashioned windows opening onto both streets.

The aroma of baking bread drifted out onto the street…

Just inside the door were large tables piled with mountains of fresh-baked breads, and behind the cashier were racks of cooling pastries. I picked two warm croissants, ordered a large cappuccino, and sat down at an old wooden table overlooking the street to enjoy it all.

Through the window, I watched as an old man pulled a donkey cart, laden with palms, ferns, and tropical plants for sale. He announced his wares like a town crier as he made his way down the street.

El Peñón is one of my favorite Cali neighborhoods. But it’s just one of many good choices for living in this city.

One of the most appealing things about El Peñón and Cali in general is the cost of buying real estate here. You can find a spacious, three-bedroom apartment with a large terrace for less than US$70,000, for example. Generally speaking, it’s possible to buy a home in this city for some of the lowest prices you’ll find in any developed area of South America.

More on the Cali real estate market and other current listing examples to follow…

First, more background.

Cali is Colombia’s third-largest city—after Bogotá and Medellín—with a population of almost 2.5 million. Situated about 1,000 meters above sea level (3,250 feet), it enjoys warm weather all year, with refreshing evening breezes.

It’s a modern city, with good infrastructure and drinkable water. Cali’s commercial offerings vary from new, upscale shopping malls to mom-and-pop tiendas and places like the corner bakery where I sat with my cappuccino and croissants as I began writing this dispatch.

Crime is a concern in parts of Cali, and certain sectors have high levels of gang-related violence, including homicides. After pouring through a pile of crime statistics, I made a map of the safest neighborhoods in the city…and those that should be avoided. Needless to say, I confined my travels and real estate search to the safe sectors on the list.

Cali is best known as the world salsa capital. People come from all over to learn in the city’s schools and dance in its clubs and discos. Salsa originated in New York (with music from Cuba and Puerto Rico), but today Cali is the epitome of this dance form.

The two southernmost neighborhoods in Cali are the high-end suburban areas of Pance (PAHN ceh) and Ciudad Jardín, characterized by single-family homes with large yards and lots of trees. There are also elegant gated communities and options for apartment/condo living in both of these areas and even a country club in Ciudad Jardín. These two neighborhoods have the lowest crime rates in the city…and the highest prices.

In Pance, the city’s most expensive address, we found a new apartment of 105 square meters (1,130 square feet), located close to two universities and the city’s best medical facilities. With three bedrooms and three baths, the asking price is US$136,000.

Another apartment in Pance was larger, at 167 square meters (about 1,800 square feet), and had three bedrooms, three baths, a nice terrace, a pool, and a sauna. It was close to schools and shopping areas and listed for US$173,900.

However, the real bargains were farther north, in the west-central part of town, centered roughly on the neighborhood of El Peñón I’ve mentioned. Not only were the real estate prices here much cheaper, but the neighborhoods were more walkable and more colorful.

Cali’s historic center is San Antonio, which has the familiar Spanish-colonial look. The colonial architecture is well-maintained, and there are many cafes and restaurants. If you’re looking for expats in Cali, this is where you’re most likely to find them (although you won’t find many).

Have a look at this video of Barrio San Antonio, to get a feel for historic Cali.

The historic center is not far from my favorite walkable downtown areas, including El Peñón, Granada, and Centenario. Granada and El Peñón have excellent dining districts, with loads of restaurants, clubs, and cafes. Centenario—with its tree-lined streets—is within walking distance of both, with the least expensive real estate in the nice parts of the city.

A good example in Centenario is a three-bedroom, three-bath unit of 157 square meters (1,690 square feet). It’s centrally located, near the commercial center and the famous Avenida Sexta, the hub of downtown’s salsa scene. With a good-sized balcony the asking price is US$67,064 at today’s exchange rates.

In El Peñón, a two-bedroom, two-and-a-half-bath apartment of 106 square meters (1,141 square feet) plus a large terrace of more than 600 square feet, in a quiet area just two blocks from the park in El Peñón, is on offer for just US$82,000.

One of my favorite property finds was in Normandía. This apartment had two bedrooms and two baths, with 89m2 of living space (958 sq.ft). It was located right on the river that separates Normandía from the restaurant district in El Peñón, with tall riverside trees and a river and park view. They’re asking just US$79,500 at today’s exchange rates. This would be an amazing rental, just minutes from all the action.

Which brings me to my real point: Rental returns in this city can exceed 20% per year.

That’s a gross figure and it’s for a furnished rental. Still, that’s a number to get excited about.

I’m compiling a complete report, including many other current examples of bargain-priced properties and good rental investment opportunities, which I’ll be sending out to readers of our new free real estate e-letter service, Overseas Property Alert. I invite you to sign up here to receive my report when it’s ready. Again, it’s free.

Lee Harrison

 

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