Investing in Medellin real estate isn’t just about finding a beautiful property—it’s about knowing where your money works hardest. In a city with diverse neighborhoods and rapidly evolving demand, cap rates (capitalization rates) y rental yields vary significantly depending on location, property type, and rental strategy.
This blog breaks down year-long average returns by neighborhood to help investors make data-driven decisions in Medellin’s competitive property market.
What Is a Cap Rate and Why Does It Matter?
The capitalization rate (cap rate) is a percentage that reflects the annual return on a real estate investment based on its income, not including financing. It’s calculated as:
Cap Rate = (Net Operating Income / Property Value) × 100
A higher cap rate generally means higher returns, though it may also reflect increased risk or management complexity. Medellin offers cap rates that range from 4% to over 12%, depending on the rental strategy and neighborhood.
Best Performing Neighborhoods for Short-Term Rentals
Short-term rentals (Airbnb-style) typically offer the highest cap rates, especially in areas frequented by tourists, expats, and digital nomads. Here are top-performing neighborhoods:
El Poblado (Provenza & Manila)
- Cap Rate: 8% – 11%
- Why It Performs: Medellin’s most touristy zone, walkable, full of nightlife, coworking spaces, and restaurants.
- Risk/Reward: High demand, higher upfront costs, and regulations evolving.
👉 Explore short-term rental listings and opportunities
Laureles (La 70, Segundo Parque)
- Cap Rate: 7% – 10%
- Why It Performs: Local vibe meets growing foreign interest. Popular with longer-stay visitors and younger travelers.
- Risk/Reward: Lower prices than El Poblado, strong occupancy but less premium nightly rates.
Envigado (Central & La Magnolia)
- Cap Rate: 6% – 9%
- Why It Performs: Family-friendly, safer reputation, and rising appeal among digital nomads and remote workers.
- Risk/Reward: Slightly slower appreciation than Poblado but lower buy-in and stable growth.
Best Performing Neighborhoods for Long-Term Rentals
If you’re targeting monthly or yearly tenants—especially professionals, students, or locals—long-term rentals offer stability with lower turnover. Here’s how Medellin’s neighborhoods rank.
El Poblado (Outside Tourist Core)
- Cap Rate: 5% – 7%
- Why It Performs: Professionals, foreign workers, and expats seeking quiet but central homes.
- Tenant Profile: Longer-stay foreigners, remote workers, couples, students.
👉 See long-term rental-ready homes in Medellin
Laureles/Estadio
- Cap Rate: 6% – 8%
- Why It Performs: Consistent demand from university students, families, and professionals.
- Tenant Profile: Locals and foreigners looking for affordability and walkability.
Belen / Los Colores
- Cap Rate: 6% – 9%
- Why It Performs: Budget-friendly with rising value. High demand for year-long rentals from middle-class Colombians.
- Tenant Profile: Families, students, and workers in health and education sectors.
Key Factors That Influence Yield
- Furnishing: Furnished units can yield 20–30% more
- Admin fees (HOA): Can eat into profits in newer buildings
- Regulations: Airbnb is restricted in some buildings—know your zone
- Seasonality: High season spikes (Dec–Jan, June–Aug) lift short-term returns
- Property management: Quality local partners help maintain income and reviews
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What Returns Can You Expect in 2025?
Across Medellin, investors can expect:
- Alquileres Diarios: 7% – 12% cap rates (with strong demand and pricing)
- Long-Term Rentals: 5% – 8% cap rates (less volatile, steady tenants)
Each investor’s goals—whether appreciation, passive income, or long-term residency—will influence which neighborhood and strategy fits best.
Conclusion
Medellin remains one of Latin America’s most attractive markets for real estate investment—but success depends on local knowledge and smart strategy. Whether you’re going after high-yield Airbnb properties or long-term rental stability, neighborhood choice is everything.
EVERYPLACE helps foreign investors navigate the Medellin market with transparency, professionalism, and on-the-ground expertise.
👉 Start your search today: Properties for sale in Medellin 👉 Learn more about Medellin’s neighborhoods and market trends at everyplace.co