Medellín combines three important benefits that most of us look for when searching for an overseas destination; year-round excellent weather, an enviable lifestyle, and affordable properties. And in 10 years of searching the world for the perfect getaway, I’ve never seen anything quite like it.

You can see hundreds of high-quality properties, with expansive views in great locations, and at a reasonable price. For a real estate buyer, it doesn’t get any better than this.

Last month we looked at the lifestyle I discovered when buying my own second home in Medellín. Now let’s take closer look the real estate scene, in this first-world haven.

High in the Andes

Medellín stretches for 15 miles along the Aburrá Valley. Its metropolitan area consists of 10 municipalities, and is home to almost four million people. The unique culture is different from anything else in Colombia…more reminiscent of Europe or Argentina than the typical Latin America. You’re more likely to hear Tango than Salsa music, and the culture’s bloodlines have remained predominately Spanish, with little Native American or African influence.

Medellín has dozens of desirable neighborhoods, each with its own unique appeal and price range. But most of the real estate action is in one area, called El Poblado; a green, lush part of Medellín that sits on the mountainside east of the valley floor. El Poblado is considered Medellín’s best neighborhood.

At the hub of El Poblado is an area called the Zona Rosa, which hosts Medellín’s best restaurants, exclusive shopping, and hottest nightlife. Another sought-after area is the Golden Mile, a strip along Avenida Poblado where you’ll find El Poblado’s shopping, financial, and business district.

If you buy in a part of El Poblado, with access to the Zona Rosa or Golden Mile, you’re in a premium area within Medellín’s best neighborhood.

Why it stands out

For buying real estate, I find there are five things that make Medellín stand out in the crowd.

It’s physically beautiful. Medellín—and specifically El Poblado—is built on lush hills, with tree-lined streets, green parks, and meandering roads. Throughout the area, small streams tumble down from the mountains, their borders lined with dense areas of lush, tropical vegetation.

The weather is perfect. The city sits at the optimum 5,000 feet above sea level near the equator; which means ideal temperatures and no seasonal variation. With days around 80° and nights in the 60s, it’s always comfortable. As a second homeowner or rental manager, you’ll benefit from having no “off season”.

It’s a first world environment. Medellín boasts well-maintained roads and drinkable water, along with dependable phone service, electricity, and high-speed Internet. You’ll find shopping galore, from mom-and-pop stores to upscale boutiques…as well as a number of large, modern shopping malls. The modern airport provides direct flight to the U.S.

It’s an enjoyable place to be. From the hole-in-the-wall shop selling home-made empanadas to elegant restaurants with fine French cuisine, your dining experience will be varied and limitless. You can also spend an evening at the theater or orchestra, explore the city’s museums, visit its many galleries, or relax in its parks. And what’s more, the sizzling nightlife in Medellín draws visitors from around the world.

The market is mature, active, and under-valued. There’s a solid and dependable real estate industry here, with a great inventory of quality properties. Construction standards are high—even in older buildings—yet prices are lower than you’ll find in most markets in the hemisphere…amazing value when compared to Medellín’s quality of life. What’s more, the property registry process is secure, and transaction costs are low.

These five obvious advantages are what convinced me to buy in Medellín, but I had a few other personal motives, too. One was to diversify my currency position by holding assets outside the U.S. dollar…and the other was to generate non-dollar income. In both cases, it’s a hedge against the dollar’s decline.

Medellín’s Properties

Most expats I’ve met in Medellín came first to enjoy the city’s lifestyle. But most buyers also rent their properties when they’re not in residence, allowing the properties to pay for their cost of ownership.

I looked at over 70 properties in Medellín before buying my own, and kept some useful statistics. On a per-square-meter basis, Medellín was about half the price of other comparable cities in Latin America.

One good value was a three-bedroom, two-bath home on a quiet, tree-lined street. The location was perfect…within the Zona Rosa, and two blocks from the Golden Mile. With 1,250 square feet, the asking price was $105,500, at today’s exchange rates.

For something larger, I found an impeccable 1,560 square-foot unit with three bedrooms, four baths, maid’s quarters, and awesome valley views for $136,100. The least-expensive unit I saw in this neighborhood (and in the best location) was 861 square feet, with two bedrooms and two baths for $83,300.

Of course there are plenty of lifestyle options outside of El Poblado. I particularly liked the neighborhoods of Conquistadores, Laureles, and Envigado. They have their own commercial areas, and each offers its own unique lifestyle. I don’t believe these markets are quite as liquid as El Poblado, but the values are terrific.

Conquistadores for example, is a pleasant, treed, residential neighborhood. I saw a large 1,636 square-foot apartment that offered four bedrooms, four baths, a balcony, and garage for only $108,000.  That’s an amazing $713 per square meter, or $66 per square foot.

Buying a property

There are no restrictions on foreign buyers in Colombia, and you don’t need to be a resident. You can repatriate your gains and earnings to your home country. And Colombia has a sound process for tracking property titles and recording liens…so it’s unlikely that you’ll unknowingly be stuck with a title problem.

I recommend using an attorney for two major tasks. One is to do your title verification, sales contract and deed. The other is to help with processing your purchase payment into Colombia, so you’ll have rights to expatriation of funds and favorable tax treatment.

I’ve worked with four attorneys, and Clara Múnera continues to be my choice for property transactions, money matters, or residency. Email: mcmunera@hotmail.com.

The process for buying is simple. Unlike most countries, your attorney should verify that the title has no liens or encumbrances before you sign anything or pay any money. Then you execute a sales contract (promesa de compraventa) and make the down payment, normally 10%. Next you’ll sign the deed (called an escritura) at closing, and make final payment. Remember, properties are priced in Colombian pesos.

Transaction costs are as low as you’ll find anywhere in the Americas. As a buyer you’ll pay a portion of the transfer tax and notary fees, as well as the title registration fee and your own attorney costs. I recommend allowing between 2% and 3% of the purchase price, to be conservative. For my property, the transaction cost was 1%, including the attorney fees.

The near-term outlook

So far, Medellín’s outdated, lingering stereotype is keeping prices down…an image kept alive by movies, TV shows, and Tom Clancy novels. But even the mainstream is learning the truth today, and things are changing fast.

The average asking price jumped $100 per square meter in El Poblado between February and May of this year. But more importantly, the attitude of the sellers changed remarkably…they stood much firmer on their prices, and often had multiple offers in hand for the best properties. I lost six properties to the competition on my second visit to the city, which was unheard-of a year ago.

This is the best city lifestyle I’ve found in my 10 years of wandering Latin America. But once the mainstream sees the value here, the bargain prices will be gone for good. My only regret about Medellín is that I didn’t come here a few years earlier.

Real Estate professionals

Rich Holman is founder of First American Realty Medellín. He maintains an English-language website and employs only bilingual agents. Email: Rich@FirstAmericanRealtyMedellin.com; website: FirstAmericanRealtyMedellin.com.

Marjorie White is probably the most-energetic and hard-working realtor I’ve worked with anywhere, and I bought my property from her. Marjorie speaks Spanish, but works with an English-speaking associate (email: mayowr@une.net.co).

Get the full story

The new 2011 edition of the Colombia Report is now available. I included complete details on Colombia’s top cities, real estate examples, and comprehensive “how-to” information on residency, moving money, and property purchase. See here for more information.