CDTs or Real Estate: Which is the Best Investment?

October 27, 2023

Investing in CDTs

In Colombia, CDTs are one of the most popular investment options due to the security and stability they offer. This investment method is offered by banks and financial institutions and consists of depositing an amount of money in a CD for a specified period of time. In exchange, the institution pays the interest rate agreed upon in the contract.

For this type of investment, it is important to bear in mind that the return on the CDT is fixed for the duration of the investment, which is subject to the liquidity of the financial system, which may have a high level of solvency, meaning that an increase in rates represents a high risk. Likewise, at the time of renewal, if market liquidity is high, you will encounter low rates of return.

If the investor is looking for short- or medium-term returns, the CDT is a viable option.

Investing in real estate

A study conducted by the Financial Superintendency indicates that only 14.1% of Colombian households that save invest their money in options that can increase their wealth. For this reason, acquiring real estate, such as lots, houses, apartments for sale in Medellín, commercial premises, or offices, is another option for obtaining financial benefits. This investment focuses on purchasing properties with the expectation that they will increase in value over time or generate steady income from leasing the space.

One of the most important aspects of this investment is that it appreciates over time above inflation. For this, location, condition of the property, age, and proximity to places of interest are important. In fact, its profitability can exceed up to 17% of the assessed value. In addition, this option allows you to diversify your portfolio. You can purchase entire properties or fractions of properties, thereby reducing the risk of your real estate investments.

Investing in real estate is an excellent option, as it offers very positive long-term returns.

Finally, it is important to clarify that there is no single option for choosing the best investment; the decision depends on your objectives, the expected time frame for receiving returns, and your individual preferences. To make this important decision, we recommend seeking professional advice so that you can make decisions that are more in line with your needs and with a thorough understanding of market behavior.