As market conditions change, real estate developers quickly respond. Even existing properties can often be easily re-purposed as in the case of converting vacation homes to rentals, fractional ownership or Airbnb.
The pandemia certainly changed many things. One, there was a spectacular rise in remote working. Overnight you could work from anywhere as long as you had a decent internet connection. People also wanted out of crowded living conditions. They wanted outdoor spaces and their own little gardens. Wanting to reduce their individual carbon footprint, they also sought out agro communities to grow their own produce and organics.
But when the pandemia was over, there was suddenly a new problem. The cost of living. An overnight insane policy change away from fossil fuels to electricity caused gas and diesel prices to soar effecting the cost of everything. Suddenly we were experiencing the highest inflation rates in 40 years and shortages on just about everything due to supply chain issues. Single family home prices went crazy and so did interest rates.
So what are the opportunities today ?
Due to the high costs, apartments and condos have gotten very small. Tiny. Developers are somehow cramming 3 bedrooms, 2.5 baths into less than 900 SF (80 m2). Attached Townhouses are everywhere as the 2 story format requires a very small footprint and developers pack then into the small parcels. Your tiny back porch is maybe 3 x 2 or 4 x 2 (m2) and your next door neighbors on both sides are within arms reach. And you are looking directly into the apartment behind you. There is NO privacy.
In Colombia, these townhouses are selling faster then they can build them for about $5 to 6 milliones per m2 or about $550 to $700 milliones....some are as high as $800 milliones for delivery in 18 to 24 months. In dollars, we are talking say $120,000 to $155,000 for 900 SF = $133 to $172 per SF.
The opportunity is to give them a similar sized apartment but on their own lot for the same price out in the suburbs say 30 to 45 minutes from the city. Instead of trying to cram a 3 bedroom into that space, only have a 2 bedroom 2 bath but with a nice outdoor porch area. Buyers today are mostly single or a couple with no children. They don´t want the cost and hassle of maintaining a 3,000 to 4,000 SF home.
Land outside the cities especially small to medium sized cattle farms are ideal for this type of development. Even a relatively expensive parcel can work.
For example, I have a 9.176 m2 parcel, zoned urban, with 120 meters frontage on our gorgeous private golf course. This could be subdivided into say 30 lots of 240 m2 (12 x 20). The houses would be say 90 m2 plus a deck which at a generous cost including profit of $3 million per m2 = $270 milliones plus $300 milliones for the lot = $570 milliones. Right in the target price range for immediately sell out. The 30 lots times $300 milliones = $9 mil milliones. This lot is being offer for $1.8 mil milliones.
Big profit potential.
Contact me at:
William Schwind
colombialivingrealty@gmail.com
304 201 3535