What is the average rental yield in Bogotá?

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THE LATINVESTOR

A team specialized in real estate investing in LATAM countries

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Bogotá. If you'd like to learn more about us, you can check our presentation page.

What are the different property types available in Bogotá and their average rental yields?

Bogotá's rental market offers four main property categories, each delivering distinct yield profiles based on location and tenant demand.

Apartments dominate the market and represent the most liquid investment option, especially in central and northern districts like Chapinero, Usaquén, Cedritos, Chicó, Santa Barbara, and Zona T. These properties typically yield between 5.8% and 8% annually for long-term rentals, with smaller units performing better on a per-square-meter basis.

Houses are more common in suburban areas such as Suba, Fontibón, and La Calera, offering yields of 5.5% to 6.7%. While these properties attract families seeking longer tenancies, they generally require higher initial investments and deliver lower yields per square meter compared to apartments.

Commercial properties, including offices and retail spaces, are concentrated in business districts and offer yields that fluctuate with economic cycles. Mixed-use and boutique units in trendy locations like La Candelaria can deliver yields of 7.2% or higher, particularly when managed as short-term rentals.

Short-term rental properties in prime business and tourist zones can achieve gross yields up to 11%, though these require active management and are subject to higher vacancy risks and potential regulatory changes.

How do yields vary by neighborhood or district in Bogotá?

Rental yields in Bogotá vary significantly across neighborhoods, with central and northern districts consistently outperforming suburban areas.

Chapinero leads the market with yields of 6.5% to 8%, driven by strong demand from young professionals, students, and expats attracted to its vibrant nightlife, restaurants, and proximity to business centers. The district's excellent transport links and diverse housing stock make it highly liquid for investors.

Usaquén delivers yields of 5.8% to 7%, appealing to families and executives who value its upscale residential atmosphere, shopping centers, and quality schools. Properties here command premium rents but also require higher purchase prices, balancing out to solid mid-range yields.

La Candelaria offers yields around 7.2%, benefiting from tourism demand and the area's historic charm. However, investors should consider the neighborhood's evolving character and potential gentrification impacts on long-term returns.

Zona T, San Patricio, and Parque 93 can deliver up to 11% yields for short-term rentals, thanks to their concentration of hotels, restaurants, and business facilities that attract corporate travelers and tourists. Cedritos provides stable 7.2% yields, while outer districts like Suba and Fontibón offer more modest 5.5% to 6.7% returns but with lower entry costs.

How do yields change depending on property size and surface area?

Property size significantly impacts rental yields in Bogotá, with smaller units typically delivering higher returns per square meter invested.

It's something we develop in our Colombia property pack.

What is the average total purchase price including all fees and closing costs?

As of September 2025, purchasing property in Bogotá involves significant upfront costs beyond the listed price that investors must factor into their yield calculations.

Average property prices in Bogotá's city center range from COP 5-8 million per square meter (approximately $1,450 per m²), while suburban and outer areas cost COP 2.5-5 million per square meter. Transaction fees typically add 3-5% to the purchase price, creating a total cost structure that impacts net yields.

Agent fees represent the largest additional cost at 3-4% plus VAT, followed by transfer taxes of 0.5-1%, registration fees of approximately 1%, and notary costs of 0.3-0.5%. Legal fees and due diligence add another 0.5-1% for foreign buyers navigating Colombian property law.

For a $100,000 USD apartment purchase, expect total costs of $103,000-$105,000 after all fees and closing costs. These additional expenses reduce effective yields by approximately 0.3-0.5 percentage points annually when amortized over a typical 10-year holding period.

Foreign buyers should also budget for currency exchange costs and potential delays in the registration process, which can temporarily impact cash flow planning for rental properties.

What are the common taxes, ongoing costs, and mortgage expenses owners face?

Property ownership in Bogotá involves several recurring expenses that directly impact net rental yields and must be carefully calculated for accurate return projections.

Annual property tax ranges from 0.3% to 1.6% of the cadastral value, which is typically lower than market value but still represents a significant ongoing cost. Monthly maintenance and HOA fees vary widely, with administrative fees of COP 3,000-8,000 per square meter and maintenance costs of COP 2,000-5,000 per square meter depending on building amenities and age.

Property insurance costs COP 500,000-1,500,000 annually, while utilities for a typical 2-bedroom apartment run COP 200,000-400,000 monthly when landlord-covered. These costs can reduce gross yields by 1.5-2.5 percentage points annually.

Mortgage financing presents challenges for foreign investors, as Colombian banks typically require local residency and established credit history. When available, mortgages often require 20-30% down payments with interest rates varying based on market conditions and borrower profile.

Professional property management services, essential for short-term rentals and recommended for long-term properties, typically charge 8-12% of rental income, further reducing net yields but often improving occupancy rates and tenant quality.

How do short-term rental yields compare with long-term rental yields?

Short-term and long-term rental strategies in Bogotá offer distinctly different risk-return profiles, with short-term rentals delivering higher gross yields but requiring significantly more active management.

Long-term rentals in prime areas like Chapinero, Usaquén, and Cedritos typically yield 5-7% annually with minimal management requirements. These properties attract families, professionals, and expats seeking stable housing, resulting in lower vacancy rates and predictable cash flows. Lease terms usually span 12 months with automatic renewal options, providing income stability.

Short-term rentals in business and tourist zones like Zona T, San Patricio, and La Candelaria can achieve gross yields up to 11%, particularly for well-located, professionally managed properties. The Bogotá Airbnb market grew nearly 20% in 2024, driven by increased business travel and tourism.

However, short-term rentals face higher operating costs including frequent cleaning, utilities, maintenance, platform fees (typically 3-5%), and professional management services. Vacancy rates average 5-8% compared to 3-5% for long-term rentals, and seasonal fluctuations can significantly impact monthly income.

Regulatory risks also differentiate the strategies, as Colombian cities increasingly scrutinize short-term rental operations, potentially impacting future profitability through licensing requirements or operational restrictions.

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Can you share example yields for different combinations of property type, area, and rental strategy?

Real-world yield examples demonstrate how property type, location, and rental strategy combine to create different investment outcomes in Bogotá's market.

A concrete example: A $80,000 studio apartment in La Candelaria generating $650 monthly through Airbnb achieves 9.75% gross yield before expenses. After deducting management fees (10%), utilities ($50/month), maintenance ($30/month), and vacancy allowance (7%), the net yield drops to approximately 7.2%.

Conversely, a $120,000 two-bedroom apartment in Chapinero renting for $700 monthly long-term achieves 7% gross yield. With lower management costs (5%), stable occupancy, and tenant-paid utilities, the net yield reaches 6.2%, providing more predictable returns despite lower gross performance.

What are the typical renter profiles for each property type and area?

Understanding renter demographics helps investors select properties that match market demand patterns across Bogotá's diverse neighborhoods.

Central trendy areas like Chapinero and La Candelaria attract students from nearby universities, young professionals working in the financial district, expats drawn to the international atmosphere, and tourists seeking authentic Colombian experiences. These renters typically prefer furnished studios and one-bedroom apartments with modern amenities and proximity to nightlife and restaurants.

Northern upscale districts including Santa Barbara, Chicó, and Zona T appeal to corporate executives, diplomatic families, and affluent Colombian professionals who prioritize security, quality schools, and shopping access. These tenants often seek unfurnished two to four-bedroom apartments or houses with parking and building amenities.

Outer suburban areas like Suba, Kennedy, and Fontibón primarily serve local Colombian families seeking affordable housing with good transport links to central Bogotá. These renters typically occupy larger properties for extended periods, valuing space over location prestige.

Short-term rental zones attract diverse profiles including business travelers attending conferences, tourists exploring Colombian culture, and digital nomads seeking temporary housing. These guests prefer fully furnished, well-equipped properties in safe, well-connected areas with easy airport access.

What are the vacancy rates, and how do they differ by property type and area?

Vacancy rates in Bogotá vary significantly by location and property type, directly impacting investor returns and cash flow predictability.

Prime residential areas including Chapinero, Usaquén, and Cedritos maintain low vacancy rates of 3-5% for long-term rentals, driven by consistent demand from professionals, students, and families. These neighborhoods benefit from excellent transport links, employment opportunities, and lifestyle amenities that sustain rental demand even during economic downturns.

Tourist and short-term rental zones experience higher vacancy rates of 5-8% due to seasonal fluctuations and economic sensitivity. Business travel demand varies with economic cycles, while leisure tourism peaks during holidays and school breaks, creating predictable but variable occupancy patterns.

Commercial and industrial areas show variable vacancy rates depending on broader economic trends, sector-specific demand, and infrastructure development. These properties typically require longer marketing periods when vacant but can offer stable returns when occupied.

Suburban areas like Suba and Fontibón generally maintain moderate vacancy rates of 4-6%, though tenant turnover tends to be lower due to family-oriented renters seeking stability. Properties in these areas may take longer to rent but often secure longer lease terms once occupied.

It's something we develop in our Colombia property pack.

We did some research and made this infographic to help you quickly compare rental yields of the major cities in Colombia versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.

How do you calculate gross yield and net yield from top-line rent to final return after expenses?

Accurate yield calculations require understanding the difference between gross and net returns, as marketing materials often emphasize gross yields while investors earn net returns.

Gross yield calculation is straightforward: (Annual Rental Income ÷ Purchase Price) × 100%. For example, a property purchased for $100,000 generating $7,000 annual rent delivers 7% gross yield. However, this figure ignores all ownership expenses and provides an incomplete investment picture.

Net yield calculation provides realistic returns: (Annual Rental Income - Annual Expenses) ÷ (Purchase Price + Transaction Costs) × 100%. Essential expenses include property taxes, maintenance and HOA fees, insurance, vacancy allowance, management fees, and repairs.

For short-term rentals, additional expenses include cleaning costs, utilities, platform fees, frequent maintenance, and higher management fees. A property with 10% gross yield might deliver 6-7% net yield after these expenses.

Long-term rentals typically have expense ratios of 25-35% of gross income, while short-term rentals can reach 40-50% due to higher operating costs. Professional property management, while reducing net yields by 8-12%, often improves occupancy rates and property condition, potentially increasing long-term returns through better tenant quality and property preservation.

What are the smartest property choices for maximizing yield in Bogotá today?

Strategic property selection in Bogotá requires balancing yield potential with risk factors, liquidity considerations, and management requirements.

Mid-range apartments in Chapinero, Cedritos, and Usaquén represent the optimal balance for most investors, offering yields of 6.5-7.5% with strong tenant demand, low vacancy rates, and good liquidity. These properties attract diverse renter profiles and maintain value during market fluctuations.

Small units including studios and one-bedroom apartments typically yield higher returns per square meter, particularly near universities and business districts. These properties appeal to students, young professionals, and short-term renters willing to pay premium rates for convenient locations.

Short-term rental properties in San Patricio, Zona T, and La Candelaria can maximize yields for hands-on investors comfortable with active management. Success requires understanding seasonal patterns, maintaining high property standards, and navigating evolving regulations.

Emerging neighborhoods experiencing infrastructure improvements or gentrification offer potential for both rental yields and capital appreciation. However, these areas require careful market analysis and higher risk tolerance due to changing neighborhood dynamics.

Properties near metro lines, universities, and major employment centers consistently outperform due to sustained rental demand and future-proof locations that adapt to changing urban development patterns.

How have rents and yields changed over the past 5 years, past year, and what's the forecast for 1, 5, and 10 years, including how Bogotá compares to other similar big cities?

Bogotá's rental market has demonstrated resilience over the past five years, with yields remaining relatively stable at 5-7% despite economic fluctuations and the pandemic disruption.

From 2020-2025, property prices in key districts rose 7-8% annually, outperforming Colombian inflation while rental demand remained strong after a brief pandemic downturn. The short-term rental sector particularly rebounded, growing nearly 20% in 2024 as business travel and tourism recovered.

In the past year (2024-2025), gross yields have slightly increased due to rising rents and moderate price appreciation of 3-7%. Infrastructure improvements including metro line extensions have boosted certain neighborhoods, while increased foreign investment has supported market liquidity.

One-year forecast suggests steady yields with modest 3-5% price growth, supported by continued infrastructure development and economic stability. The market shows resilience against regional economic headwinds.

Five-year projections indicate 3-7% annual price appreciation with stable yields of 5-7%, assuming continued political stability and infrastructure investment. Bogotá's growing international profile as a business and cultural center supports long-term rental demand.

Ten-year outlook positions Bogotá favorably compared to regional capitals like Lima, Santiago, and Mexico City, with potential for yield maintenance or slight increases as the city develops its tourism and business sectors. The expanding metro system and urban development projects create optimism for sustained rental market growth.

It's something we develop in our Colombia property pack.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

Sources

1. The LatinVestor - Bogotá Property Guide
2. Properstar - Bogotá Real Estate
3. RE/MAX Colombia - Bogotá Properties
4. The LatinVestor - Bogotá Rental Income Potential
5. The LatinVestor - Bogotá Real Estate Market
6. Pacific Prime - Cost of Living in Colombia
7. Wise - Buying Property in Colombia
8. The LatinVestor - Bogotá Property Taxes and Fees
9. The LatinVestor - Bogotá Apartment Maintenance Fees
10. The LatinVestor - Mortgages for Foreigners in Colombia