The World’s Best-Kept Property Investment Secret
“Pablo is dead.
“There. That’s my presentation.”
Rich Holman made a move as though to leave the stage.
“Seriously,” he continued, after the laughter in the room died out, “that is all you need to know about Medellin, Colombia.
“The world and especially Americans are afraid of Medellin,” Rich went on, “mostly because of Pablo Escobar. But, again, Pablo is long dead.
“Escobar has caused a lot of trouble for the city of Medellin, but, the truth is, he’s also providing a service for us global property investors. He’s keeping prices down. Real estate prices in this city are seriously undervalued because the world doesn’t understand what this city really is. And that’s all thanks to Pablo.
“What is Medellin really?” Rich asked the crowd. “It’s Latin America’s best-kept secret.
“Who here has been to Medellin?”
Eight or nine people raised their hands.
“OK, great. Keep your hands up,” Rich instructed.
“Now, everyone else in the room, take note of those with their hands raised. At the break, ask those folks what they thought of Medellin.
“I’ll save you the suspense of waiting for their answers. I’ll tell you now what they all thought of Medellin. They loved it.
“How do I know? I know because I have never met any expat who has visited Medellin and didn’t love it. The challenge isn’t selling Medellin to anyone who has ever seen it. The challenge is getting people to go take a look. Once you’ve seen it, the city sells itself.”
Thanks to Medellin’s status as the world’s best-kept property investment secret, you can buy here, at the best addresses in town, for as little as US$800 per square meter…and you can rent for a net yield of 8% a year.
In addition to that ongoing cash flow, you’ve got the potential for currency upside (which, yes, can also go against you…though it’s worth noting that the Colombian peso is up 35% against the U.S. dollar since 2009 and is expected to continue on an upward course) and capital appreciation.
As Lief told the group this morning, “When investing in a rental property anywhere in the world, you don’t want to count on appreciation. Make your buy decision based on your yield and cash flow projections. Then any capital appreciation you may enjoy is the icing.”
That said, property values in Medellin have increased a steady 5% to 7% per year for the past five years (fear of Pablo notwithstanding), and we expect this trend to continue for several years more.
A rental property investment in Medellin buys you a hard asset in a market with an expanding middle class and an appreciating currency. It also buys you a pied-a-terre in one of the world’s premier cities.
Lucky for you, few others have figured this out.
Yet.
Kathleen Peddicord
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