Short-Term Rental Houses Attract Digital Nomads in Medellín

Digital nomads looking to plant a flag in Latin America have turned their sights from Mexico City to Medellín—and locals and developers are taking note.

Since the outbreak of the pandemic, Colombia’s second-largest city has seen an influx of foreign temporary residents, prompting developers to respond with the proliferation of “viviendas turisticas,” or “tourist homes” for these digital nomads, Bloomberg reported.

Modeled similarly to a hostel, these short-term rental properties combine elements of a boutique hotel, a co-living space and a studio apartment. So far, an estimated 90 viviendas, ranging in cost from $1 million projects with a few units to $100 million towers built by major developers, have been constructed or are under construction, according to Growth Lab, a research and consulting company in Medellín owned by local developer Trazos Urbanos SAS.

Some locals initially converted their apartments into Airbnbs to meet digital nomad demand, which led to a spike in rents as well as sex trafficking and drug tourism issues, according to Bloomberg. In 2020, Colombia enacted strict limits on short-term rentals in residential buildings, leading Medellín officials to think of attractive incentives for developers to construct new, purpose-built developments for tourists in neighborhoods less prone to gentrification.

The growth of these professionally operated viviendas has helped stymie some of the sex and drug traffic, per city tourism officials. The developments cater to visitors’ needs with large private rooms with bathrooms and kitchenettes, fast internet connection and uniquely designed common spaces. Lower prices also attract out-of-towners as well as some locals, such as relocated employees or newly divorced men, according to Bloomberg.

“What appeals to nomads appeals to a lot of people,” Andrés Giraldo, director of Growth Lab, told Bloomberg.

As a result, these developments enjoy similar customer traffic to local hotels. Vivienda occupancy rates sit around 70 percent, aligning with Medellín’s hotel occupancy rates in recent years.

To bolster the city’s vivienda supply, ads have started popping up on local news and social media calling for investors to either buy individual units or revenue shares from projects. The smaller and midsize developments have so far brought in local bankers and Americans with connections to Colombia, while the larger ones have attracted many Asian and European investors.

— Chris Malone Méndez