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Property Management v2

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by

Roxie Reyes

on 12 August 2015

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Transcript of Property Management v2

Rental Property Management
in Medellin

Who Am I?
O
wner / Manager of
"The Apartment Medellin"
S
tarted business in 2006
M
erged with First American Realty in 2012
How Did I Get Started?
Arrived in 2005 as a backpacker
Rented an
apartment with
2 friends
Built a
3-page website
to advertise a room
Rented/sub-let
3 more apartments
50 different
owners from
9 different
countries
First managed property in 2007
Today we manage
over 80 properties
Growth in Tourism (Colombia)
1M in 2006
1.8M in 2013
80%
increase from 2006 to 2013
10%
Average
growth
per year
2006
2011
2012
2013
Most growth in last 3 years
Where are they coming from?
24%
80%
10%
of all tourists
of our clients
come from
the US
are from
the US
Business designed for westerners
of our clients
are from
Colombia
What percentage come to Medellin?
9.5%
of all visitors to Colombia
come to Medellin (2006)
12.5%
of all visitors to Colombia
come to Medellin (2013)
Cartagena receives
150
cruise ships a year
with
300,000
passengers
Bogota makes up nearly 50% of all visits*
*According to border entry
When do they come?
May
July
December
September
March
January
Expected Occupancy Rates
}
48% - 54%
Hotel growth,
Tax Incentives
Medellin hotel
The Apartment Medellin
72.3%
2009
72.6%
2010
73.3%
2011
75.2%
2012
75.8%
2013
What is the management fee?
Covers portal listing expenses of up to 13%
Weather in Medellin
Events and festivals
High seasons: Medellin vs Cartagena
Visit all year round
Why apartments?
Price vs hotels (up to 35% cheaper)
Space / possibility of sharing
Free services: Phone calls, Internet
Cook and wash for yourself
Privacy, and the feeling of being at home
Short term / Long term
Decreto 2590 - May 2010
Cotelco - Industry regulation
Cartagena vs Medellin
Requirements for short term
Very limited availability
From 30 apts. to 10 in 18 months
Rental Yields:
1, 2 and 3 bedroom units
Expenses
Maintenance: Varies according to apartment
Expenses - Long Term

Long term
$60 per night x 25 nights = $1,500
So what should I buy?
Facilities
Pool
View / Balcony
Jacuzzi
Air conditioning
Gym
Safe, Coffee Maker, Iron etc.
Minimum monthly payment
Cleaning costs were removed
Allows us to spend money on
professional photos
More than just a
financial investment
For visitors
For investors
1 Bedroom / Studio example
Short Term
__________
$1,980
$90 per night
x 22 nights
Long Term
__________
$1,056
$48 per night
x 22 nights
2 Bedroom Example
Short Term
__________
$2,420
$110 per night
x 22 nights
Long Term
__________
$1,320
$60 per night
x 22 nights
3 Bedroom Example*
Short Term
__________
$2,860
$130 per night
x 22 nights
Long Term
__________
$1,540
$70 per night
x 22 nights
*can vary greatly
40%
2 bedroom apartments
Studio/
1 bedroom
apartments
30%
3 bedroom apartments
30%
Management Fee: 135,000 - ~$75 USD
Agent Commissions: 15% - 20%
Utilities: Typically low cost (no heating/air)
Property Tax: Approx 1% of declared value
Cleaning: Varies according to contract
HOA Fees: Varies according to building and size
Management Fee:
Commission:
Bills:
Property Tax:
HOA Fees:
Cleaning:
Maintenance:
$75
$225 (15%)
$150
$70
$80
$0
$20
Total net profit:
$880 / $10,560 p/a
(approx. 7% ROI)
2 Bedroom / 780f $150,000
(6 months or more and 83% occupancy)
2
Centrally Located
1 Block from Main Avenue
Swimming Pool
View (No Balcony)
Good Facilities
Great Location
Available Short-Term
Old Building
Poor Furnishings
Smelt Like Mildew
Nice New Modern Furnishings
Nice View (Now Gone)
Bad Location
Good Location
Great Facilities
Air Conditioning
Balcony
Jacuzzi / View
Very High Utilities
The Importance of Interior Design
Location
Location
Location
The Golden Mile

Parque Lleras

El Tesoro Mall


Great views
Residential
Fewer conveniences
Ground Zero for tourists
Top nightlife spot
Well known to tourists
More long term visitors
Mining companies have returned
Families returning to Medellin
Investors
Independent workers
Retirees
Medical Tourism / Internships
Trends
"The Apartment Medellin/First American Realty"
Full management service
90% of clients live overseas
As much or as little involvement as you like
To summarize...
Right place,
right time
Thank you!
Tourism is on
the increase
Real estate prices
are rising 5-7%
per year
Still an
undiscovered
quantity
Monthly statements
Funds transferred to anywhere in the world
Focus is on quality not quantity
Always ranked highly on search engines
No serious competitors in our market
1.8M
Investment
or second home
Location
Furnishings/
Decoration
10%
of our clients
are from
rest of the world
World Heritage Site
New vs Remodeled
Suits your own personal taste
Experienced property managers and interior designers
Save time
Save Money
Custom-made artwork
Much better results
“WOW” factor
Currently Property Value: $180,000
Additional $6,000 per year appreciation
Total ROI of over 11%
AirBnb, Flipkey, Homeaway and Booking.com
Demographics
Full transcript