Medellin, Colombia, and Montevideo, Uruguay: Two More Top Retire Overseas Choices Compared
“The two cities that I am presently considering are Montevideo and Medellin,” writes reader Phyllis D., of Sacramento, “and I’ve been researching various websites, trying to work out a realistic cost of living.
“From what I’ve found so far, it doesn’t look too easy to live well on a low budget in Montevideo. Based on what I’m finding, it seems the more economically suitable choice would be Medellin…”
Phyllis brings up a good question…one that I hear frequently about these two popular retirement destinations. Having lived in both cities, I think it’s worth a few minutes to compare the two.
First, I think Montevideo is a good choice within Uruguay; the cost of living is lower than in Punta del Este, and I found lifestyle to be richer for a year-round resident. Don’t get me wrong; I loved living at the beach. But Montevideo is alive and active every day of the year, while Punta del Este grinds to a halt in the wintertime.
Colombia’s Medellin, however, provides a more upscale environment than Montevideo. In my neighborhood of El Poblado, the streets are better kept, the city is cleaner, and everything seems shiny and new. In fact, the lifestyle is higher-end than anywhere I’ve lived in the United States…which makes Medellin an amazing bargain considering the low cost of living and of property.
On the other hand, I find a cultural richness in Montevideo that I don’t feel in Medellin’s El Poblado. The Old World European traditions, the predominantly Italian influence, and the friendly people create an experience that I haven’t been able to duplicate outside Uruguay. And Montevideo–in fact, Uruguay in general–offers the low-stress environment that comes with a truly non-confrontational culture…something I’ve found to be unique about Uruguay in the Americas.
Whether you prefer the Old World ambiance and tango culture of Montevideo or the upscale beauty of Medellin is a matter of personal choice. But here are a few other things to take into account, as well, if you’re deliberating between these two top retirement options.
First, I believe that the cost of living for day-to-day items in these two cities is almost the same. Based on my own spending habits for food and entertainment, I can’t see a difference in my routine expenses.
However, you’ll spend more on electricity in Montevideo, as you will likely use heat for three months per year and air conditioning for perhaps two months. Montevideo has four seasons (but no ice or snow), while Medellin enjoys moderate temperatures all year (average high of 79°F).
All things considered, I’d say you’ll spend less in Medellin than in Montevideo, especially if you live (in Medellin) outside the most expensive and sought-after El Poblado.
Both Montevideo and Medellin are cities where you could live without a car; although it’s easier to get around Montevideo on foot than it is El Poblado, as Montevideo’s terrain is fairly level and everything’s closer at hand.
Both cities also have solid infrastructure, with drinkable tap water, good public transportation, and reliable high-speed internet service available at reasonable prices.
Montevideo and Medellin also both host a significant English-speaking expat community. But in neither case is the English-speaking community large enough to affect the local culture.
One important difference has to do with the cost of real estate, which is significantly higher in Montevideo than in Medellin. Based on my personal experience, a Medellin apartment that sells in El Poblado for US$1,500 per square meter would cost more than US$2,500 per meter in Montevideo, in a comparable neighborhood.
Also, real estate transaction costs are much higher in Montevideo than in Medellin. I paid around 8.2% of the purchase price on the two Uruguayan properties I bought but only 1% on each of two Medellin properties I’ve purchased.
Real estate trades in U.S. dollars throughout Uruguay, while it trades in Colombian pesos in Colombia. So Uruguay offers exchange-rate stability (with respect to real estate), while Colombia offers the risks and/or rewards of buying in a foreign currency.
In both countries, you have exchange-rate exposure for all other expenses (aside from property purchase). Both the Uruguayan peso and the Colombian peso have risen strongly against the U.S. dollar over the past few years; however, recently the dollar has been gaining ground on both. This is impossible to predict, so I just chalk it up in the “risk” column.
In both countries, I found residency fairly easy to obtain; although Colombian residency is the easiest I’ve seen in Latin America. I applied and walked out the door with my Colombian visa in just under one hour.
Finally, Montevideo is less convenient to the United States than Medellin. The flight to Montevideo takes over nine hours from Miami, while Medellin is just three hours away.
As we say again and again and again, it comes down to your priorities. If you’re seeking to diversify your life outside your home country or looking for a safe haven, I would give Uruguay the edge over Colombia. It’s an easier jurisdiction for the movement of money; it has a far more flexible and customer-focused banking system; and it’s geographically and economically more removed from North America, which, in the context of “safe haven,” is a plus.
On the other hand, if want to be able to visit family, friends, or business ventures in the States regularly, Uruguay’s geographic situation would be a negative.
If you’re interested in the purchase of real estate, for investment and/or for personal use, I would recommend Medellin over Montevideo. This is where Medellin is the clear winner, not only versus Montevideo but versus almost any other city you could name right now.
Not only are prices significantly lower in Medellin than in Montevideo, but we see in Medellin the potential for continued appreciation of values over the near, mid-, and long terms. And, in Medellin, you also have the potential to generate cash flow from rental income of better than 10% per year net. Medellin is one of the top real estate investment markets in the world today.
Continue reading: Cost Per Square Meter Of Real Estate In Medellin, Colombia