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Cali's rental market offers attractive yields averaging 7.31% gross annually as of September 2025.
The Colombian city presents diverse investment opportunities with yields ranging from 4.84% to 9.94% depending on property type, location, and size. Southern districts like Ciudad Jardín and Pance deliver premium returns, while western neighborhoods such as El Peñón attract strong short-term rental performance.
If you want to go deeper, you can check our pack of documents related to the real estate market in Colombia, based on reliable facts and data, not opinions or rumors.
Cali's average gross rental yield stands at 7.31% in 2025, with larger apartments in southern and western districts offering the highest returns.
Net yields typically range 1.5-2% lower than gross yields due to taxes, management fees, and vacancy costs.
| Property Type | Average Gross Yield | Best Neighborhoods |
|---|---|---|
| 1-Bedroom Apartments | 4.84% | El Peñón, Granada |
| 2-Bedroom Apartments | 6.39% | Ciudad Jardín, Center |
| 3-Bedroom Apartments | 9.94% | Ciudad Jardín, Pance |
| 4+ Bedroom Units | 8.09% | Pance, Santa Teresita |
| Short-term Rentals | 8-14.4% | El Peñón, Western Districts |
| Long-term Rentals | 6-8% | Southern Districts |
| Premium Houses | 7-9% | Ciudad Jardín, Pance |
What's the current average rental yield in Cali?
The average gross rental yield in Cali stands at 7.31% as of September 2025.
This figure represents a competitive return compared to other major Colombian cities and reflects the city's growing appeal among investors. Yields typically range from 4.84% to 9.94% depending on specific property characteristics and location within the city.
The Cali residential rental market has shown resilience throughout 2025, with consistent demand from both local residents and international tenants. Southern and western districts continue to outperform northern areas in terms of rental returns.
These yields are calculated based on gross annual rental income divided by total property purchase price, before accounting for taxes, management fees, and other expenses.
For investors seeking higher returns, larger properties in premium neighborhoods consistently deliver yields above the city average.
How do rental yields vary between different neighborhoods in Cali?
Rental yields in Cali show significant variation across neighborhoods, with southern and western districts commanding the highest returns.
Southern Cali neighborhoods like Ciudad Jardín and Pance deliver yields between 6% and 8%, driven by premium developments and rapid price appreciation. These areas attract affluent tenants willing to pay higher rents for quality accommodations.
Western Cali districts including El Peñón and Santa Teresita offer yields ranging from 3.88% to 8.62%, with exceptional performance for short-term rentals due to tourist appeal. These neighborhoods benefit from proximity to entertainment venues and cultural attractions.
Northern Cali areas like La Flora and Santa Mónica experience stagnation or slight yield decline due to shifting demographics and market saturation. However, mid-range neighborhoods in this zone show rising yields from increased demand by young professionals and students.
Central Cali maintains steady yields around 5-7% with good tenant stability and proximity to business districts.
What are the rental yields for different property types in Cali?
| Property Type | Average Gross Yield | Typical Monthly Rent (USD) |
|---|---|---|
| 1-Bedroom Apartments | 4.84% | $250-400 |
| 2-Bedroom Apartments | 6.39% | $360-480 |
| 3-Bedroom Apartments | 9.94% | $700-900 |
| 4+ Bedroom Apartments | 8.09% | $1,000-1,200 |
| Premium Houses | 7-9% | $800-1,500 |
| Standard Houses | 5-7% | $380-490 |
| Luxury Condos | 6-8% | $900-1,300 |
How does rental yield change depending on property size or surface area?
Larger properties in Cali consistently deliver higher rental yields than smaller units, reflecting strong demand from families and groups.
Three and four-bedroom apartments achieve the highest yields, often reaching 8-10% gross annually due to limited supply and high demand from affluent families relocating to Cali. These properties command premium rents while purchase prices remain relatively reasonable compared to smaller units per square meter.
Two-bedroom units offer moderate yields around 6-7%, striking a balance between affordability and rental income potential. These properties attract young professionals, couples, and small families.
One-bedroom apartments typically yield 4-5%, as purchase prices per square meter are higher while rental rates remain constrained by local income levels. However, well-located one-bedroom units in tourist areas can achieve higher yields through short-term rentals.
It's something we develop in our Colombia property pack.
What's the typical total purchase price including fees and taxes for rental properties in Cali?
Property purchase prices in Cali vary significantly by location and property type, with apartments ranging from $950-$1,150 per square meter in mid-2025.
Standard apartments in central and mid-range neighborhoods cost $950-$1,150 per square meter, while premium locations like Ciudad Jardín and Pance command up to $1,200 per square meter. Houses typically cost less per square meter, ranging from $720-$810 depending on location and condition.
Transaction costs add 4.15% to 6.15% to the total purchase price when considering both buyer and seller expenses. Buyers pay approximately 1.15% to 2.15% in property transfer taxes, notary fees, and legal costs.
Sellers typically pay 3% to 4% in agent commissions plus VAT, which buyers should factor into negotiation strategies. Colombia does not charge VAT on property sales, but annual wealth and property taxes apply to high-value properties.
Foreign buyers should budget an additional 10-15% above the listed price for all transaction costs, financing arrangements, and initial setup expenses.
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What are the ongoing costs, taxes, and typical mortgage expenses for rental properties in Cali?
Property ownership costs in Cali include several ongoing expenses that significantly impact net rental yields.
Property taxes vary but typically range from 0.5% to 1% annually for properties valued over $770,000, calculated on the assessed property value. Rental income faces a withholding tax rate of 3.5%, with total marginal tax rates scaling up to 39% for high-income earners.
Mortgage interest payments are tax-deductible up to COP 59,758,800 annually (approximately $15,000), providing significant tax benefits for leveraged investors. Foreign buyers typically access mortgage rates between 10% and 12% on variable terms.
HOA and property management fees range from $80 to $250 monthly depending on property type, location, and included services. Premium buildings with extensive amenities command higher fees but often justify costs through increased rental rates.
Additional costs include insurance (typically 0.2-0.4% of property value annually), maintenance reserves, and potential property management fees for investors not managing properties directly.
What's the difference in rental yield for short-term rentals versus long-term rentals in Cali?
Short-term rentals in Cali can generate significantly higher gross yields than long-term rentals, but net returns often converge after accounting for additional expenses.
Short-term rentals in tourist areas achieve gross yields between 8% and 14.4%, particularly in western districts like El Peñón where demand from business travelers and tourists remains strong. However, true net yields typically drop to 6-8% after accounting for cleaning, management, higher vacancy periods, and platform fees.
Long-term rentals deliver more stable gross yields around 6-8% in prime areas, with lower yields of 4-6% in suburban and northern districts. These properties benefit from consistent occupancy, lower management requirements, and reduced maintenance costs.
Short-term rentals require active management, professional cleaning services, and higher insurance costs. Vacancy rates for Airbnb properties average 52-65% annually (35-48% occupancy), requiring higher daily rates to compensate for empty periods.
Long-term rentals offer superior tenant stability, predictable cash flow, and lower operational complexity, making them suitable for passive investors seeking steady returns.
Can you give example rental yields for a few typical properties in different areas of Cali?
| Location | Property Details | Purchase Price (USD) | Monthly Rent (USD) | Gross Yield (%) |
|---|---|---|---|---|
| Ciudad Jardín | 3-bed apartment, 120m² | $140,000 | $700-900 | 6-8% |
| Center/Granada | 2-bed apartment, 80m² | $81,600 | $360-480 | 5-7% |
| El Peñón | 1-bed Airbnb, 45m² | $48,000 | $250-400 | 6-10% |
| Santa Mónica | 2-bed house, 110m² | $89,000 | $380-490 | 5-6% |
| Pance | 4-bed condo, 140m² | $160,000 | $1,000-1,200 | 7-9% |
| Santa Teresita | 3-bed apartment, 100m² | $110,000 | $650-800 | 7-8.5% |
| Western District | 2-bed vacation rental, 75m² | $70,000 | $400-600 | 6.9-10.3% |
What is the current vacancy rate in Cali and how does it vary by area and property type?
Vacancy rates in Cali vary dramatically between short-term and long-term rental markets, with significant geographic variations across the city.
Short-term rental properties experience 52% to 65% vacancy annually, translating to 35-48% average occupancy rates or approximately 175 occupied nights per year. Vacancy rates are highest in older suburban areas and northern districts where tourist appeal remains limited.
Long-term rental vacancy rates remain relatively low in southern and central districts where robust demand from professionals, families, and students maintains steady occupancy. Northern areas experience higher vacancy due to market saturation and demographic shifts away from these neighborhoods.
Premium properties in Ciudad Jardín, Pance, and El Peñón maintain the lowest vacancy rates due to limited supply and strong tenant demand. Mid-range properties in growing districts also show good occupancy rates as young professionals seek affordable quality housing.
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.
What is the breakdown from gross rental yield to net rental yield for properties in Cali?
Net rental yields in Cali typically run 1.5% to 2% lower than gross yields due to various operating expenses and taxes.
Starting from the average gross yield of 7.31%, property owners face several deductions including rental income taxes (3.5% withholding rate), property management fees (typically 8-12% of rental income), HOA fees ($80-250 monthly), and maintenance costs.
Property taxes add 0.5-1% annually for high-value properties, while insurance costs contribute another 0.2-0.4% of property value. Vacancy periods, even for long-term rentals, typically reduce effective rental income by 5-10% annually.
For a property generating 7.31% gross yield, the net yield calculation typically results in 5.3% to 5.8% after all deductions. Premium properties with professional management may see larger gaps between gross and net yields due to higher service costs.
Short-term rentals face additional expenses including cleaning services, platform commissions, higher insurance premiums, and more frequent maintenance, further reducing net yields despite higher gross rental rates.
How have rents and yields in Cali changed compared to one year ago and five years ago?
Rental markets in Cali have shown mixed performance over the past year, with notable geographic variations in rent growth and yield compression.
Over the past year, rents increased 5-7% in southern and western districts including Ciudad Jardín, Pance, El Peñón, and Santa Teresita. Northern areas experienced stable or declining rents due to oversupply and demographic shifts away from these neighborhoods.
Yields compressed slightly across the city as property purchase prices rose faster than rental rates, particularly affecting premium areas where international investment drove property appreciation. However, strong rental demand in growing districts helped maintain competitive yields.
Looking back five years, southern and western neighborhoods experienced substantial rent growth and yield improvement as these areas gained popularity among affluent residents and investors. Ciudad Jardín, El Peñón, and Pance transformed from secondary markets to premium destinations.
Northern districts showed relatively flat or declining rental performance over the five-year period due to supply saturation and changing preferences toward southern and western locations. The rental market increasingly polarized between premium growth areas and stagnant northern zones.
What are the smartest property investment choices in Cali right now, and how do they compare with similar cities?
The smartest property investments in Cali focus on larger apartments in premium southern and western districts, offering the best combination of yield and appreciation potential.
- Ciudad Jardín and Pance premium apartments: Three and four-bedroom units in these southern districts offer 7-9% yields with strong appreciation prospects and affluent tenant demand.
- El Peñón and Santa Teresita vacation rentals: Properties suitable for short-term rentals in western districts capitalize on tourist demand and generate 8-12% gross yields.
- Mid-range apartments in growing districts: Two and three-bedroom units in emerging neighborhoods provide 6-8% yields with lower entry costs and professional tenant stability.
- Well-located family houses: Larger houses in established neighborhoods offer steady 6-7% yields with long-term tenant retention and appreciation potential.
- Student-oriented properties: Apartments near universities and professional districts benefit from consistent demand and 6-8% yields with lower vacancy risk.
Compared to other Colombian cities, Cali offers lower entry costs and competitive yields versus Bogotá or Medellín while providing stronger appreciation potential than smaller regional cities like Barranquilla or Pereira.
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.
Cali's rental market offers compelling opportunities for informed investors, with gross yields averaging 7.31% and premium properties in southern and western districts delivering exceptional returns.
Success requires careful neighborhood selection, property type analysis, and realistic expectations about net yields after accounting for all expenses and taxes.
Sources
- Global Property Guide - Colombia Rent Yields
- Global Property Guide - Colombia Rental Yields
- Golden Harbors - Colombia Real Estate Market
- The LatinVestor - Average House Price Colombia
- The LatinVestor - Cali Price Forecasts
- Overseas Property Alert - Cali Rental Market
- The LatinVestor - Cali Real Estate Trends
- Global Property Guide - Colombia Taxes and Costs
- Airbtics - Airbnb Revenue Cali
- AirROI - Cali Market Data