The first two times I visited the town of Santa Marta, on Colombia‘s Caribbean coast, I was a tourist who just wanted to relax on its superb beaches, eat its amazing, fresh seafood, and soak up its vibrant nightlife. And Santa Marta delivered.
This last time I came to check out its real estate and its potential as an expat haven. And once again, Santa Marta delivered.
Real estate here is affordable, rentals are in demand, and the city’s ongoing growth makes an investment look even more attractive. Throw in the current excellent 3,000-peso-to-the-U.S.-dollar exchange rate, and buying property here becomes almost a no-brainer.
You see indications all around that Santa Marta is preparing for an increase in both visitors and expat residents. The international airport is in the midst of a three-year, $46-million renovation and expansion. The city is upgrading and adding capacity to the public water and sewer systems. On my recent visit, my rough count put the number of high-rises under construction at about 20.
In 2015, nearly 1.5 million passengers came through the Santa Marta airport. That’s three times the city’s population. While most visitors were Colombians, more and more expats from all over the world are also discovering Santa Marta. It’s less crowded and less expensive than other Colombian coastal cities, while still offering great beaches, eco-tourism, and a growing restaurant and nightlife scene.
Santa Marta’s long-term rental market is tight. Current owners report that their properties are throwing off gross rental yields of 9% and more.
The neighborhood of Bello Horizonte is just five minutes from the Santa Marta airport. The nearly two-mile-long white-sand beach is lined with hotels, resorts, and a convention center.
Over the past few years, Bello Horizonte has become increasingly popular with both Colombian and foreign vacationers. A two-bedroom, three-bathroom, 1,265-square-foot apartment in a project now under construction is listed for $194,500. It has all the luxury amenities that make for a pampered getaway, including a swimming pool, sauna, squash court, and gym—and it’s right on the beach. For a modest $100-a-night rental fee (which similar properties listed on Airbnb already command) for only 15 nights a month (50% occupancy), the apartment would gross $18,000 a year, giving you a 9.25% gross return.
If you prefer an area that has a mix of residential sectors and vacation rentals, then El Rodadero is what you’re looking for. The northern and southern sections of El Rodadero are residential, while the central sector is the vacation and entertainment hub, filled with restaurants, gift and souvenir shops, and bars. El Rodadero’s semi-circle-shaped beach is one of Colombia’s most popular vacation spots.
A two-bedroom, two-bathroom, 925-square-foot apartment on the fifth floor—with a balcony, parking, 24-hour security, sauna, and a swimming pool—can be bought fully furnished for $86,000. With administration fees of only $88 a month and utilities at about $115 a month, living here is very inexpensive.
If you would rather have this as a rental property, this apartment could pay for itself. Rents for furnished apartments in the area average $550 a month. That works out to a 7.7% gross return.
A 10-minute, 50-cent bus ride from El Rodadero’s malecón drops you off in Santa Marta proper. As in many colonial cities, the historic center is filled with whitewashed colonial buildings that line the narrow streets.
Jardín is a perfect neighborhood if you’re looking for stand-alone or attached one- or two-story houses. The six- by seven-block area has tree-lined, flat streets for effortless walking. Bus lines, a supermarket, and pharmacies are all within a 15-minute walk.
An eight-year-old, 1,850-square-foot, two-story attached house with three bedrooms, three bathrooms, parking for two cars, and a landscaped garden lists for $120,000. Relaxing on the patio and enjoying the warm weather would be a great way to spend your afternoons. But if you’re looking for an investment, similar properties in this area rent for $1,000 a month, which would give you a 10% gross return.
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