Bogotá 1-bed duplex: accept COP 410,000 monthly negative cash flow?

[isa.reed]

I’m considering a 1-bed duplex in Bogotá. The location appears to have durable demand, but using a conservative rent of COP 5,497,000, I still get a shortfall of about COP 410,000 per month after reserves. I can comfortably cover that, yet the purchase seems dependent on future rent growth or appreciation. Would you view this as a calculated investment, or simply a monthly payment on an appreciation bet? Disagreement is welcome, especially if the duplex format changes your assumptions.

 

[field.full]

On those figures, I would not buy it purely for appreciation. But “after reserves” needs unpacking: have you also allowed separately for vacancy, management, maintenance, insurance, property tax and tenant turnover? Also, how sensitive is the COP 410,000 shortfall to the financing terms? Principal repayment may build equity, so negative cash flow is not automatically a bad return, but the full breakdown matters.

 

[measureTheFinch]

I’d be slightly less dismissive than amelias, provided the downside is deliberate. COP 410,000 becomes COP 4,920,000 over a year before any surprise beyond your assumptions. Stress-test flat rent, a vacancy, higher maintenance and less favourable financing, then decide how long you would willingly fund it. I would also compare it specifically with other 1-bed units: a duplex layout may attract interest without producing enough extra rent or resale value to justify its price premium.