The easiest way to get a Colombian Visa
The Easiest Way To Get A Colombian Visa
by David Steckenreiter Medellin Real Estate Agent
(We have updated information for August of 2016 on buying Colombia real estate for a Colombia Investors Visa. But the information below is still good other than adjusting the exchange rate.)
Any visa application takes time and preparation. The least expensive Colombian visa in the terms of an investment would be a student visa (qualified that you have to pay your tuition and be prepared to study), a spousal visa or a pensioner’s visa if you can show a guaranteed income of 3 x the current Colombian minimum wage (at the time of this writing – 3 x 616.000 COP /2.050 = approximately 950.00 USD).
If you are not married, the spousal visa takes a different kind of investment and not one that we would recommend that you rush into. Even ”marriages of convenience” often turn out to be quite inconvenient.
If you want to invest and diversify your assets you can select a Colombia real estate investment of 350 times the current minimum wage, which at the moment is approximately 111,000 USD. This would qualify you for a Special Temporary Visa. The next step from this is the 5-year Resident Visa this requires an investment of 650 x the minimum wage or just over 205,000 USD (again these figures are based on the 2014 minimum wage and the current peso/dollar exchange).
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There is another option left. You can make a minimum investment in a Colombian corporation of 100 times minimum wage – for about 31,500 USD and qualify for the same Special Temporary Visa that a 100 K USD investment in real estate would bring you.
We have discussed the Casa Provenza project previously but for the ease of obtaining a visa, with a minimum investment, this is one of the best options you can currently find. In fact, the cost of the visa is included in your investment and the visa application will be filed on your behalf. Talk about no fuss, no muss.
There have been some questions and concerns about this project and we will address some of them here.
There are 35 investors or shares in this property so the maximum valuation is 35 x 35,000 USD or 1,225,000 USD
There is a built-in cost of approximately 1,000 USD for the visa and legal application being paid by Casa Provenza so the original Maximum valuation is 35 x 34,000 USD = 1,190,000 USD.
The April 2014 exchange rate has been hovering at 1950 so the investment required at that rate is 31,557 USD or a valuation of 1,104,500 USD and taking out the visa cost = 1,069,500 USD.
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It is extremely important to note that this is not a residential sale but Casa Provenza is a commercial property. As a result, commercial property valuations are based on the ratio of net rental income/total investment cost. This gives you the cap rate.
Cap rates for commercial projects in Colombia are typically 8%.
In 2013, Casa Provenza had a net of 55,917 USD so taken at an 8% cap rate, the building has a valuation of 698,962 USD. Due to 3 months of construction which reduced the income from February through April. If you factor those numbers out the net would have been 67,996 USD (this is the projected rental income for 2014) then the value would be rated at 849,995 USD.
Assuming a 5% annual increase in net rentals the forecasted valuation in 5 years is 1,084,775 USD which is slightly above today’s valuation of 1,069,500 USD. The five-year timeline was chosen because this is the holding period for the visa (but it must be renewed annually)
The forecasted net return for 2014 for investors at today’s exchange rate is now well over 6% which exceeds the original forecasts of 4% to 6% of one year ago.
This investment was designed for people who do not have or want to spend 100,000 USD to 200,000 USD in real estate but want a quick visa with an option that pays more interest than what North American banks are currently paying. Not only that but there are discounted shareholder rental rights and visas can extended to family members.
At today’s exchange, for just over 31,000 USD you can buy a share in the Casa Provenza Project. You can sell that share at any time (first right of refusal to the other shareholders) but if you want the Special Temporary Visa you must hold this share for 5 years.
For those who want the peace of mind and security of having a Colombian visa at a low cost, without the worry about what papers to file and get an annual dividend in excess of 6%, now is the time to make that investment.
For more information on Colombia Residency Visas – please contact our Colombia real estate agent and investment visa specialist here.
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