The Spousal Factor
Latin America Correspondent Lee Harrison delighted the crowd in Medellin at this week’s Live and Invest in Colombia Conference with a recounting of his experiences shopping for and investing in an apartment in this beautiful city (with a little help from his dear wife Julie). Here are the highlights…
When Medellin, Colombia, came on to my radar, it got my attention, initially, because I perceived it as a market full of opportunity available at a very, very good price. My early figuring showed that I could invest in a rental apartment in Medellin with the expectation of double-digit annual yields. Seemed too good to pass up, so I planned a scouting trip. My real estate contact in the city assured me I could buy a great apartment in a great location, furnish it, and ready it for rental for a better than reasonable cost.
My mistake was introducing my wife to Medellin. Unfortunately, she liked it as much as I did. And she decided she wanted to come apartment shopping with me. My “reasonable cost” investment became something else entirely once my lovely wife got involved. Before I knew what was happening, we were buying leather couches, artwork, and designer faucets for all the bathrooms. I’d started out projecting an excellent net return on investment. Suddenly I realized I’d need 140% occupancy just to break even.
I revised my objective. The apartment Julie and I bought became not an investment at all but a great place to live.
That was the first lesson I learned: Don’t mix an investment property with the search for a second home. One of them has to take priority.
The second lesson I learned shopping in this market was thanks to the property/rental manager I consulted. Andrew Campione helped me to understand the importance of buying quality in a premium area. This can mean an important advantage for renting and for resale, and it can provide a cushion during market downturns.
In the end, I (with a little help from Julie) picked the place that felt most like home. It meets all the original objectives, plus it is a great place to be.
Now I’m shopping again. This time for an investment property, and this time I’m shopping on my own (please don’t tell my wife).
Lee Harrison
Continue Reading: Best Hotels In Medellin, Colombia
