“Colombia? Are you crazy? They hate Americans, and if you ever have to fly into Bogotá, the murder rate is one in 100.”

“Are you ignoring the government warnings? I’ll be reporting you to the proper authorities in the State Department!”

“What about the drug lords?”

Stereotypes: they’re at the root of many a good property deal. If it weren’t for negative stereotypes, the investors who bought beachfronts lots in Nicaragua for less than $30,000 would have never reaped such handsome returns.

But most stereotypes indeed have some factual basis, and Colombia is no exception. While it may not be the most dangerous place in Latin America, it’s by no means the safest, either. The political kidnappings and violence are real, and you could end up in genuine danger if you’re not careful about where you travel.

This is one reason why many savvy property buyers have set their sights on Cartagena, the centerpiece of Colombia’s Caribbean coast. We heard from a number of readers who are scouting there, have invested there, and even two who are currently building a home in Colombia’s famous walled city. Not to mention quite a few who are already in residence.

Why Cartagena? Let’s start with those stereotypes.

According to the U.S. State Department, “During the past four years, kidnapping and other violent crimes have decreased markedly in most urban areas, including Bogotá, Medellin, Barranquilla, and Cartagena.” In fact, Cartagena ranks among the safest of Colombia’s 32 department capitals. The homicide rate is better than Panama City, Caracas, or Brasilia…and also better than Memphis, Atlanta, Cincinnati, and Kansas City, Mo., according to statistics released by the FBI in September 2007.

As to the statement that “they hate Americans,” I strongly disagree. (I did not hear this claim from anyone who had actually been to Colombia.) I found the Colombian people to be friendly, open, and welcoming, from Cartagena in the north all the way down to Pasto in the south.

Drug lords? Cartagena has never been known as a center for the Colombian drug trade. While I suppose you could find drugs if you went looking, drugs, drug dealers, and “drug lords” won’t be an issue for expats or investors.

Simply put, Cartagena is a good place to live and invest…which is why so many are doing just that.

Located 2.5 hours from Miami, Fla., Cartagena and its surrounding areas is not a “newly discovered” market. On the contrary, this famous Caribbean port and its surrounding beaches have been a popular destination for many years among South Americans and Europeans. As a UNESCO World Heritage site and one of the world’s few remaining walled cities, it’s no surprise that property prices have been high for a while, especially given the magnificent condition of the colonial buildings.

You may recall that prices shot up about 50% in 2006, due to a dwindling inventory of properties inside the wall. In 2007, we’ve seen a similar performance, with properties in the city going up by 38% on a cost-per-square-foot basis.

Another impressive gain for a single year.

Cartagena is not the place to come if you’re looking for cheap real estate, although it’s not bad when compared with most of the Caribbean or to nearby Panama City. It is a place worthy of your scrutiny if you’re looking for a second home in the Caribbean or are considering a property investment.

And despite the gains over the last few years, there are still some reasonably priced properties on the market.

The Cartagena market is divided into two major sub-markets: the city of Cartagena proper, and the adjoining beach areas a few minutes away. Within the city, there are three major sectors: Centro, San Diego, and Getsemaní. Of these, Centro and San Diego lie within the wall, while Getsemaní is just outside. At the beaches, you’ll find Laguito, Castillogrande, and Bocagrande.

Centro is the heart of the walled city itself. It’s the best-preserved part of Cartagena, and has the largest number of tourist attractions and the highest tourist traffic. San Diego adjoins Centro inside the wall. It too has luxury hotels and fine dining, but it has more of a bohemian feel in some areas, with a residential flavor in others. Centro and San Diego make up a colonial environment that’s as beautiful as any you’ll see in Latin America.

Centro and San Diego are the prime sectors for real estate in the region, with the most rapidly increasing prices and sought-after properties. This is mostly because it’s a walled city, and the properties are therefore a finite commodity, with no room to expand.

The low-end entry point in the Centro market is represented by an apartment I saw situated right on the Santo Domingo square, which is the heart and center of the old city, central to the cafés, bars, restaurants, and boutiques. It was small (about 550 square feet), and the asking price was $92,500. This property was in great condition.

In San Diego, there’s a beautifully restored colonial home on offer with two bedrooms, three bathrooms, a terrace, and air conditioning. At 1,400 square feet, the asking price is $249,750 at today’s exchange rates. The property comes furnished, and I believe this is a great value for this area. Contact Paul Juan (see below) for details.

Also in San Diego, I came across a luxury condo project that’s selling pre-construction. The builder is offering more than a dozen floor plans to choose from starting at $269,000. Building is underway, and final payment is not due until construction is completed in October 2008.

Getsemaní (pronounced “get seh mah NEE”) is a neighborhood within the city but outside the wall, and was originally the sector for workers who made their living servicing the upper classes inside the wall. It is a colonial sector still in its unrestored form, and many streets are a combination of fixed-up homes interspersed with those still awaiting the paintbrush. With few tourists, it doesn’t yet have the secure feeling of the neighborhoods inside the wall. About 20% of this sector is restored to the level of Centro, including a pleasant waterfront area.

On a recent property scout, I found a house of 2,367 square feet, with three bedrooms and two bathrooms, in one of the areas that’s being restored. The asking price is about $275,000, and you can contact the owner directly at tuiran2932@hotmail.com. This is a good price in Getsemaní, the sector where there’s still plenty of room for appreciation.

If you’re looking to remodel, the fixer-uppers in this neighborhood start at less than $100,000—about half of what the same house would go for in Centro or San Diego.

The beach resorts of Cartagena are located a few minutes away from the city proper. While the gleaming highrises are a world apart from the colonial city itself, the prices are in fact driven by Cartagena’s districts within the wall.

El Laguito (“lahg EE toh”) is the most active beachside tourist destination in the region, and the beaches are busy all year, even in the low season. There are restaurants and sidewalk cafés, and the beaches are alive with vendors selling everything imaginable, which adds to the sector’s party atmosphere. The properties in Laguito tend to be smaller than in other sectors and are often designed for short-term rentals, often renting by the day or week.

Realtor Paul Juan has a one-bedroom, one-bathroom apartment on the 13th floor of a modern building with a pool near the Hilton. The view of the bay is spectacular, and the asking price is a negotiable $59,900, with condo fees of $71 per month.

A two-bedroom, two-bathroom apartment—also with an excellent view—will set you back $91,000—and it comes furnished. For more information, e-mail info@CartagenaApartments.com.

Castillogrande (“cah stee yo GRAN deh”) is a high-end residential haven in the midst of all the tourism. Even though it is within walking distance from Laguito, the beaches here are generally quiet, without vendors or many tourists. The streets are tree-lined and well kept, with large, expensive homes and tasteful highrises. Apartments and houses here are large and more geared to year-round living. This is the area’s exclusive, high-rent district.

One of the better pre-construction deals I saw was in the waterfront Malibu building, where you can buy an apartment of 1,515 square feet with three bedrooms, four bathrooms, a maid’s suite (one bedroom and one bathroom), and a balcony. This luxury building even has its own power generator. An apartment on the 16th floor will cost $315,500.

Bocagrande is the beach area nearest the walled city, and it has two very different characters. On the Caribbean side, it is geared toward the tourist trade, and has much of the atmosphere of Laguito. Its beaches are quietest on the end nearest the city (the northeast end), and they tend to get busier as you approach Laguito.

The bay side of Bocagrande is a different world, with high-end condos in gleaming new highrises. It has a luxury residential character similar to that of Castillogrande, and similar property prices.

Less than 25% of the visitors to Cartagena are international visitors, with the remainder being Colombians…so far, few North Americans. And once North American attention wanders from the comparatively high prices in Panama, this market could expand even faster.

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