Colombia: 7 Tips to Keep in Mind Before Buying a Real State

The economic reactivation in Colombia after the COVID-19 pandemic brought a new boom in the purchase of housing or any real estate in that country, as revealed by figures from essential trade associations.

For example, the Colombian Chamber of Construction (Camacol) showed that, according to its projections, an 11% increase in home purchases is expected to be reported by the end of 2023, compared to 2021 and 2022, when growth remained at 10%.

He also reported that there are currently almost 350,000 new housing projects available throughout the country, and it is estimated that another 19,000 projects are already under construction, which evidences an active dynamic in the construction sector.

However, the boom in home buying has caused unscrupulous people to take advantage of this situation, both in the construction of the properties and their amenities and in the legal process to get hold of them.

For this reason, LatinAmerican Post brings you some tips to keep in mind before buying real estate in Colombia:

1. Verify the Property’s Past

When acquiring a property, having a Certificate of Title and Freedom becomes fundamental, since it provides you with legal certainty as a buyer. This document reveals if there are any liens, mortgages, foreclosures, or other legal limitations on the property you want to purchase, allowing you to make informed decisions.

It is important to note that the cost of this certificate may vary depending on the city in Colombia where the property is purchased. Its approximate value is 17.000 pesos, although it is advisable to verify this information in the Public Registry Office of your city.

2. Review the Property Tax Clearance

Regarding the previous point, it is also necessary to consider that the property tax of the land or house is up to date, thus avoiding acquiring an unnecessary debt with the State. This information can be found in the official web portals of the city or municipality where the property is located.

3. Does the Construction Company Exist Legally?

The Certificate of Existence and Representation of a construction company is a document issued by the same construction company to the buyers that contain valuable information that allows for evaluating the progress and feasibility of the work.

The certificate is a crucial tool to provide transparency and confidence to buyers, as it allows for data on the legality and solvency of the construction company. This document can verify the legal existence of the company, its legal representative, and its current situation.

It also provides relevant information on financial management, permits and licenses obtained, and construction progress and processes.

4. In What Ways Can you use the Soil you are Acquiring?

Although this issue is generally addressed in the purchase of raw lots, it is not a point that should be taken lightly. When planning construction, it is essential to know the permitted land uses where the lot is located. This aspect is crucial and closely linked to the sector in which the property is located.

If the lot is located in a residential area or within a housing development, it is likely restricted to residential use only. Therefore, if you plan to build any other type of building, it is necessary to investigate the permitted uses of that particular lot.

5. Consultation on Threats and Opportunities in the Area

When choosing a place to settle or invest in real estate, it is essential to conduct an exhaustive geographic study to evaluate the possible risks and determining factors in the area. Experts suggest coordinating with government entities and neighbors to obtain information on possible floods, landslides, or other natural phenomena.

It is equally important to investigate the presence of nearby factories or oil and gas pipelines, as this can influence the community’s quality of life and safety. In addition, knowing the future development plans for the sector provides a more complete picture and allows informed decisions to be made.

6. Want a used home? Consider Remodeling

When looking for a used home, it is essential to consider whether it requires remodeling. Not all homes need modifications, but being attentive to the property’s needs is necessary. Whether to rent or to live in, these renovations should be considered within the budget.

It is advisable to be clear about what remodeling is needed before closing the business, thus avoiding surprises or unexpected expenses. Planning the required improvements will allow for a smoother transition and avoid setbacks.

Of course, it is advisable to consult with professionals in the field, such as architects or contractors, who can advise on the costs and scope of the necessary remodeling.

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7. Think ahead: Is it an Expense or an Investment?

Real estate investing can be a reliable way to increase wealth. Whether buying properties to lease, investing in off-plan real estate, or acquiring used properties with remodeling potential, you can see significant benefits in your financial income, such as monthly returns ranging from 0.4% to 0.5% for residential real estate or increased appreciation in the value of your new home.

However, analyzing the risks and seeking expert advice before investing is essential.