What Are We Doing In This Land Of Drugs, Murder, And Kidnapping?
I’m in Medellin this week for the Live and Invest Overseas conference. Kathie and I have been writing about Medellin and Colombia for nearly three years. We began spending time in this city two years ago, and we purchased an apartment here, that we’ve since renovated, a year ago.
Still, after all this time, readers write in regularly to ask what’s wrong with us. Don’t we know that Medellin is the murder capital of the world…the drug capital of the world…the kidnapping capital of the world? How can we be so irresponsible as to recommend that people think about investing in such a dangerous and risky place?
Medellin has a checkered past and that’s part of the reason why this city offers such interesting opportunities for both investing and living today. Certainly the drug trafficking and everything that goes along with that haven’t disappeared entirely in this city since the death of Pablo Escobar in 1993. But this is a real city of about 3.5 million people. Don’t go looking for the drug world, and you likely won’t come across it.
Over the past couple of years, Kathie and I have been all over Medellin. We haven’t seen anything that’s given us any pause. What we have found is an interesting, vibrant city with an art scene, museums, parks, an annual flower festival, and, starting next week, an annual opera season.
Kathie and I keep making this point. Alas, not everyone is buying it. One sign-up for this week’s conference wrote in last week to cancel. After he told his friends and family he’d signed up for the event, they threatened to lock him up. Citing warnings about Colombia from the U.S. State Department and the U.K. Foreign Ministry, the guy gave in to the concerns of his family and friends and decided to stay home this week.
I took a look at the U.K. Foreign Ministry’s published travel info for the United States. I’d say that the guy probably shouldn’t be there either.
Medellin, A Land Of Opportunity..But Not For Everyone
Over the past couple of years, readers have unsubscribed from our e-letters because they object to our coverage of Colombia. Of course, these people have never been to Colombia…maybe they’ve never even been to Latin America. These armchair quarterbacks should stay home.
Colombia and Medellin aren’t for everyone. The altitude at about 5,000 feet doesn’t suit some. The lack of four seasons may bother others. And you’ll have to learn some Spanish if you decide to spend any amount of time here.
And, again, Medellin isn’t 100% danger-free. No multi-million population city is 100% danger-free. Every city of any size in the world has good neighborhoods and bad neighborhoods. Medellin is no different than Chicago or New York in that way. Residents and visitors to those cities avoid the bad neighborhoods, and I’d suggest you do the same in Medellin.
However, the price of real estate in the best neighborhood of Medellin is a fraction of that in the best neighborhoods of most U.S. major cities. You can still find apartments in El Poblado (the neighborhood in Medellin) for as little as US$1,000 per square meter. That means a 100-square-meter apartment (about 1,100 square feet) for about US$100,000. Remember, that’s in the best neighborhood of the city.
This low cost of investing is one reason why Medellin is one of my current favorite markets for diversification. You’re diversifying currency while buying into a growing and strong market where you can expect net rental yields as high as 10%, depending on where and what you buy.
Of course, to buy here, you’ll have to get on a plane to come check out the market. When you book your ticket, don’t tell anyone.