Property Management in Colombia, Residential and Commercial

Implementing effective management concepts from the US we have built an international full-service property and asset management company designed to make owning offshore real estate investments hassle-free while adding value and maximizing returns on well-located quality real estate investments.

We are a full-service property management company in business since 2002. We have built a reputation for solid leadership and high standards and are regarded among the top Property Management companies in Panama. Our focus is on caring for your property and maximizing your net income. We specialize in residential properties located in the prime downtown area, where the demand for managed properties is highest.

Our Property Management team is comprised of professionals in accounting, legal, reservations, marketing, housekeeping, and maintenance.

Our services include:

• Experienced multilingual staff

• Online marketing and booking

• Utilities and administration fees payments

• Monthly owner statement with complete and organized accounting

• Maintenance and cleaning services

Online Marketing and Booking

Our service includes the promotion of your property. We have therefore several websites and options available always focusing on your wishes and needs. Additional to our flagship webpage Premier Casa we own several smaller pages with a more specified focus on various target groups. Furthermore, and especially for short-term rentals, we cooperate with Airbnb, Booking.com, and other listing pages for driving the maximum of attendance to your property.

Our advanced backend system allows us to integrate auto booking options, especially for short-term rentals. Our booking system is working fully automated and permanently synchronizing between the backend and the pages where your property is listed.

Here you will find a summary of law 820 of 2003 that regulates leasing of properties and some of its most important points for landlords and tenants. Please be aware that this is a piece of first general information.

Law 820 of 2003.

The leasing of dwellings is regulated by Law 820 of 2003. This law only applies to all rental agreements signed after July 10 of 2003, this law contains 40 articles that talk about the right of the landlord as well as the tenant, contractual agreements, regulation of monthly payments, the prohibitions of sublease and deposits, grounds for termination and more.

Some highlights of the rental regulations found in this law

Tenant must pay rent on time – Rent must be paid on time and other services such as electricity, gas, and water according to the provisions of the contract has to be paid on time as well.

The monthly rent ask is somewhat limited

Rent prices can be set freely between the tenant and the landlord, as long as the monthly rent doesn't exceed 1% of the commercial value of the property, rental agreements can be made both orally or written.

Rent increases

the law also allows for rent increases every 12 months from the execution of the lease agreement, however, the amount increased cannot be more then 100% of rent increase over the previous year, if the tenant believes that the increase is above market price or if it exceeds the 100% price increase limit, the tenant can request a revision before the mayor’s office.

early termination penalty for a tenant or landlord to end a lease early, at least three months written notice must typically be given and there is usually a penalty (indemnification), which is usually equal to three months’ rent required.

Because of this pretty stiff penalty, apartment leases in Colombia are rarely terminated early.

Reasons for termination: In Colombia landlords can only end a rent agreement in specific circumstances

• If the tenant stops paying rent or utilities

• If the tenant is subleasing the apartment to a third party

• If the tenant is not taking proper care of the property or making improvements without consent

• If the property is being used by the tenant for a criminal act

There are other instances where the landlord can end the rental agreement but in this scenario, the landlord must pay the tenants a penalty equal to three months’ rent.

• If the owner wants to occupy their property

• When the property is set to be demolished to build a new building or when required to vacate to do repairs

• If the owner has sold the property

Security deposits are not allowed: deposits are not allowed by law, therefore real estate agents rely on fiadors (cosigners with property) to rent apartments, but this requirement can be overcome if, for example, you can offer 6 months of rent in advance.

As you may be able to tell, rental law in Colombia is neutral to more favorable to renters, a landlord cannot increase the rent unilaterally, and there are clearly defined rules as to how to end a lease, overall Colombia is a prime real state market whose value is set to go up.

Utilities in Colombia

Utilities in Colombia are divided into regions, each region or municipality is responsible for contracting a utility company to serve its residents. Utility bills are calculated according to the social-economic estrato, in which the property is located, for example, people in a lower social economic estrato pay lower utility rates and as you may guess, people in higher estratos pay more to subsidize the former.

Electricity and Gas Providers in Colombia

Some of the main utility companies are listed below (most websites are in Spanish only).

CODENSA: Electricity supplier for Bogotá, with customer service points around the city
At: Carrera 13A Nº. 93-66, Zona Norte
Tel: 115 / (1) 7115115

Surtigas: Gas Company providing services for the Caribbean region, with offices in Cartagena, Monteria, and Sincelejo
Tel: 164 (Emergencies) / 018000 910164

EMCALI: Electricity and other utilities in the city of Cali
At: Avenida 2 Norte with Calle 10, Cali
Tel: (2) 8999999
Open: Monday to Friday: 08:00-17:00

How to Pay Electricity Bills

Electricity and gas bills are paid monthly, and even though payment options for utilities vary, most companies offer a choice of payment options that including:

Online payment: As online banking becomes more popular, more companies are now offering this service, nowadays utility companies allow customers to pay their monthly bills online, from either the company’s website or through the bank's website or app.

Banks and ATMs: There are many ATMs and banks that take payments for utilities, where you can pay your bill, even if you don’t have a bank account in order to pay your utility bills with cash.

Baloto machines: baloto machines are the local lottery machines that are found in, supermarkets, stores, and lottery stand, large supermarket chains, drugstores are able to take payments for utility bills.

Income tax

When it comes to trental income tax residents in Colombia are taxed on income from both inside and outside the country, while non-residents only have to pay income tax from income that is coming from Colombia, to be considered a non-resident you have to spend less than 183 days in the country.

Expats living in Colombia should also be aware of double taxation. It is always good to check if you have to pay taxes in your home country because double taxation could be an issue, Colombia has some tax treaties with other countries to avoid this issue, however, they are exclusive agreement with other South American countries, we suggest you seek help from a financial advisor to see if there any ways to mitigate or avoid this issue.

Property tax

Income generated from leasing real estate is considered as ordinary income and taxed at the rate of 33%. Rental income is subject to a tax withholding of 3.5%, which is viewed as an advance tax payment. This tax can be credited against the taxpayer's income when the tax return is filed.

Taxable rental income is calculated by simply deducting the income-generating expenses such as insurance, taxes, realtor fees, administrative expenses, maintenance, and repairs from the total rent.