Practical guide · General Questions · Basic level · 5 min read ·
Should I buy an apartment or participate in several projects?
Buying an apartment gives you full control and an asset in your name, but it takes a large sum, concentrates your money in one property and leaves you in charge of managing it. Participating in several projects lets you start small and spread the risk, in exchange for less control and low liquidity. The choice depends on your goal.
In 30 seconds
- Buying: full control and a deed in your name, but lots of capital and everything in one asset.
- Participating: low entry and spread-out risk, but no control of operations and no deed of your own.
- They aren't mutually exclusive: many people start participating while saving to buy.
Before you start
Before comparing, answer three questions about yourself. The right answer depends more on them than on the options:
- Do you want the property to live in, or to have part of your money in real estate?
- How much time and appetite do you have for managing it: finding tenants, repairs, collecting rent every month?
- How much capital do you have today and how much could you borrow? If you're not sure, first see how much money you need to start.
Step by step
- 1
Compare the entry money
Buying takes a down payment, notary and registration costs, and a loan for the rest. Participating starts from small amounts and without debt. At Circular Urban, for example, entry into Circular Houses, a building in Medellín with short-term rentals and coliving, starts at around 190,000 pesos.
- 2
Compare concentration risk
With one apartment, everything depends on that property, that building and that area. With several participations you spread your money across different assets and cities, and one doing badly weighs less on your total. That's the idea behind diversification.
- 3
Compare control and workload
If you buy, you decide everything: the rent, the tenant, renovations. You also do everything, or pay someone to do it. If you participate, a team runs the asset and you follow the results in reports; in exchange, you don't make the day-to-day decisions.
- 4
Compare what you legally hold
When you buy, you get the property's deed. When you participate, you become a shareholder of the company that owns the project: your participation is recorded in the shareholders' registry book, with the rights the agreement sets out.
- 5
Compare how you get out
Selling an apartment takes months, but there are many possible buyers. A participation has low liquidity: it isn't traded on a public market, and getting out depends on another partner in the project buying it or on the project ending.
- 6
Decide by your goal
To live in, buying usually makes more sense. To have part of your money in real estate without a large sum or the burden of managing it, participating is an option. And if your goal is to buy later, you can start participating while you save the down payment.
An example
Andrés has 40,000 units. He can use them as the down payment on a 130,000-unit flat or spread them across four projects. The figures are illustrative.
| Assets he's exposed to, buying | 1 |
|---|---|
| Assets he's exposed to, participating | 4 |
| Debt he takes on, buying | 90,000 plus interest |
| Debt he takes on, participating | None |
| Who manages | Him, or each project's team |
Neither option wins on everything. Buying, Andrés has control and a deed, but he takes on debt and concentrates. Participating, he spreads out and stays debt-free, but he doesn't control operations and his money is less liquid.
Questions you'll have
Which earns more, an apartment or a participation?
There's no general answer. It depends on the purchase price, occupancy, costs and, with a loan, the interest you pay. To compare options with different timelines, bring them to the same measure, as we explain in the ROI lesson. And remember that a project's results depend on its actual performance.
If I participate, do I own the property?
You're a shareholder of the company that owns the project, not the owner of a specific apartment. That's why you don't get a deed but a share certificate, and your rights are described in the participation agreement you read before signing.
Can I use the apartment if I participate?
No. In a short-term rental or coliving project the units are rented out to generate income for all partners, so they aren't available for personal use. If you want a place to live in, the option is to buy or rent.
What if I want an apartment to rent out by the night?
Buying one for short-term rental means checking that the building allows it, registering it in the RNT and running it every day: pricing, cleaning, guests. If you're interested in that business without running it yourself, see how to participate in Airbnb-style projects.
Can I combine both?
Yes, and it's common. Many people own the home they live in and, separately, hold participations in projects of another kind, for example an energy one like Solar Subway La Pintada. Others start participating while they save the down payment for their home.
Common mistakes
- Myth
If I don't have a deed, I don't have anything.
- In reality
You hold shares in a company that owns the asset, recorded in its shareholders' book and with rights set by contract.
- Myth
Buying is always safer.
- In reality
A single property concentrates the risk: if the area loses value or the flat sits empty for months, the whole effect falls on you.
- Myth
Participating has no risk because others run it.
- In reality
Professional management doesn't remove risk. Results depend on the project's performance, which is why it's worth reading the risk disclosure statement before signing.
Your first step
Compare with a real project
Open a project's page and look at its minimum, its documents and how results are reported. It shows you what participating means in practice, at your own pace and with no commitment.
See projectsKeep learning
This content is educational. Every participation carries risks inherent to the project, including the possibility of partial or total loss, and results are subject to each project's actual performance.
