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).
Continue Reading: Best Hotels In Medellin, Colombia