Investing in real estate in Cali

Colombia presents a distinctive mix of opportunities and challenges for those investing in real estate in Cali

Investing in real estate in Cali, often overshadowed by Medellin, presents an intriguing prospect for those willing to explore beyond its past reputation.

Cali has faced significant challenges, notably with violence and drug cartels. However, the city’s image is improving. Homicide rates, although still concerning, are lower than in cities like St. Louis and Baltimore. Crime is mostly concentrated in poorer areas, away from where foreign investors typically invest.

Cali is now known as the capital of Salsa dancing and a hotspot for medical tourism, particularly in plastic surgery and dental work. The city also offers rich opportunities for hiking and nature enthusiasts. With Medellin gaining popularity among foreigners, Cali is increasingly seen as an attractive alternative.

Cali’s proximity to Buenaventura, Colombia’s central Pacific port, enhances its appeal. As global trade shifts from the West to the East, Buenaventura’s importance is set to rise. This port is just a two-and-a-half-hour drive from Cali, making it a strategic location for logistics companies.

Many prefer to base their operations in Cali due to its better security and livability compared to Buenaventura. As Colombia improves its road infrastructure, Cali becomes even more accessible.

Cali, Colombia, enjoys a tropical savanna climate, characterized by warm temperatures year-round and distinct wet and dry seasons. Daytime temperatures typically range between 25°C to 30°C (77°F to 86°F), with nighttime temperatures seldom dropping below 18°C (64°F).

The city experiences two main rainy seasons: from March to May and from October to November. During these periods, heavy afternoon showers and thunderstorms are common.

The dry seasons, particularly from June to September and December to February, see less rainfall and more sunshine. This climate makes Cali a vibrant and lively city, with lush greenery and a comfortable atmosphere for both residents and visitors.

Investing in real estate in Cali is an opportunity for digital nomads

Short-term rentals in Cali are highly lucrative but come with regulatory challenges. To rent an apartment for less than a month, approval from homeowners’ associations is needed, which is rarely granted. Investors have two main options: buying a small house or an entire building.

Small houses are usually far from tourist areas and lack security. On the other hand, purchasing a whole building allows investors to set their own rental rules. Occupancy rates for short-term rentals can exceed 85%, offering impressive returns.

Investing in long-term rentals in Cali is less attractive. Gross yields are about 4%, making short-term or mid-term rentals targeting North American digital nomads a better option. For those looking for Investing in real estate in Cali, the southern part of the city is often recommended by locals due to its better lifestyle amenities.

However, the north and northwest regions offer more potential for real estate investments due to their tourism appeal and future development prospects. Areas like Granada, San Antonio, and El Peñon are particularly notable. Granada is known for its vibrant nightlife, San Antonio for its colonial charm, and El Peñon for its premium location.

The historical center offers another opportunity for those interested in Investing in real estate in Cali. Entire buildings near the central square are available at attractive prices. Though the area is currently rough, the potential for long-term gains is significant.

Investing in real estate in Cali is a frontier market with significant upside potential

Investing in a whole building is arguably the best strategy in Cali. A Danish investor named Patrick, who has lived in Cali for years, specializes in this approach. He buys, renovates, and rents out buildings, achieving net yields of 10-12%. The cost of acquiring and renovating buildings in prime areas of Cali is about $1,000 per square meter, making it a unique investment proposition.

Individual apartments in Cali, while cheaper than in Medellin, often yield lower cash flow. The market in Medellin is more liquid, with a growing international airport and higher demand. Unless an exceptional deal is found in Cali, Medellin remains a safer bet for most investors.

Investing in real estate in Cali does come with risks. As with any investment in Colombia, there are inherent challenges. However, the potential rewards, especially for those willing to invest in entire buildings, can be substantial.

For investors looking for a frontier market with significant upside potential, investing in real estate in Cali presents a compelling case.

For those interested in investing in real estate in Cali, Caporaso & Partners offers comprehensive legal support and expert guidance to secure the best deals. With extensive knowledge of the local market and regulations, they provide invaluable assistance in navigating the complexities of property transactions.

Caporaso & Partners ensure that all legal aspects are thoroughly addressed, protecting clients’ interests, and facilitating smooth, successful investments. Our expertise and dedication make us an ideal partner for anyone looking for opportunities to capitalize on investing in real estate in Cali.