Yield
The relationship between what a property earns and what it cost. Gross yield divides annual rent by the purchase price; net yield subtracts costs and vacant months.
Invest in property with clear information
Understand yield, appreciation, costs and cash flow before buying to invest in Bogotá and Colombia.
Concepts worth understanding
A short guide to compare properties and model scenarios prudently.
Appreciation
The increase (or decrease) in a property’s value over time. It depends on the surroundings, demand and condition, and is not guaranteed.
Price per m²
Price divided by area. It helps compare similar properties in the same area; always state whether the area is built or private.
Cash flow
Rental income minus the loan payment, administration and other costs, month by month. Positive cash flow alone does not make an investment good.
Vacancy
Time without a tenant between leases. Budget some months without rent when estimating yield.
Costs
Administration, property tax, insurance, maintenance and fees reduce net yield. Ask for them in writing before buying.
Administration fee
The condominium fee for shared costs. Depending on the lease, the owner or the tenant pays it; check what it includes.
Taxes
These include property tax and, depending on the case, income tax on rent and capital gains. Consult an accountant.
Maintenance
Periodic repairs and replacements. Set aside a share of the rent for the unexpected.
Educational content; not financial, legal or tax advice. Yields, appreciation and cash flows are estimates and are not guaranteed. Consult a professional before deciding.