The historic walled city of Cartagena is Colombia’s tourism magnet. Thousands of tourists flow through the city every year, adding to the gentle chaos of the colonial streets: Portuguese speaking-visitors looking at centuries-old architecture, Germans admiring the sunset from the high walls of this UNESCO heritage city and Americans enjoying a horse and carriage ride through the evening streets lighted with old fashioned lamps. Some of these visitors are so enchanted by their moment of “Cartagena magic” that they want to have a permanent piece of it, and consider investing in an apartment, house or boutique hotel.

Trending with the country’s steady growth in tourism, Cartagena is also a major destination in the Caribbean for cruises. Last year, some 254,000 visitors disembarked in this port. And the international press has been busy praising Cartagena as a world-class destination.

The Washington Post recently cited four reasons to invest in Colombia, including the free-trade agreement with the United States, its excellent mid-way location in the Americas and a more stable government than surrounding countries. Improved security, a growing economy and tax breaks are attracting major international hotel chains that hadn’t considered Colombia a safe investment area years before. Hilton, Holiday Inn, and Sonesta are among some names already present outside of the walled city. A 30-year income tax exemption will attract more, such as InterContinental, Sheraton, Radisson, Marriott, Hyatt and Melia, all of which have properties in final planning stages or under construction. Within the walled city, dozens of boutique hotels in restored colonial mansions provide a unique historical perspective.

With this growth, it’s no surprise that there’s a growing interest in getting a piece of the action in Cartagena. Many private foreign real estate investors hail from other parts of South America, notably Venezuela. Europeans and North Americans have an increasing interest in property investment in Cartagena, particularly American retirees. Many of these investors have Colombian spouses or some other prior connection with Colombia.

Being the center of cultural activities and tourism, the walled city attracts the attention of investors. But the beauty of the Old City comes with a price; one of the most expensive square meters in Colombia is found there. The cost per square meter for a building in bad need of repair runs about 6 million pesos. Reconstructed, the square meter can be worth $10 million pesos. Strict laws regulating preservation of the original architecture and permitted building materials often makes restoring colonial mansions complicated and expensive.

El Laguito, Bocagrande and Castillogrande are well-developed areas close to the walled city that are popular with tourists who want to be near the beach. Many investment rental properties are available, and prices per square meter start around $4 million pesos and go up from there.

Just minutes to the north of the Old City near the well-known Las Americas Resort is the newly developed area of Los Morros. This beachside sector of luxurious white buildings with blue tinted windows is home to hotels chains Holiday Inn and Sonesta, with the construction of a Radisson hotel underway. At one time an area to find inexpensive property, most of the developable land has now been bought up and the square meter of construction has increased in price.

Some investors buy apartments, houses or hotel suites to rent out. Investing in off-plan properties can also result in good profitability. One local real estate agent, Henry Banquez from Ethos Inmobiliaria, suggests buying an off-plan apartment at a selling price that would be quite lower than the post-construction price. Thirty or forty percent would be payable up front, with the rest payable in monthly installments. Shortly after construction, the apartment could be sold at the higher post-construction price, resulting in capital growth.

Most sellers in Colombia don’t use a lawyer for property transactions. A real estate agent or just as often a family member acts as the agent and the transaction takes place at a notary office. Buyers should make sure the property doesn’t have any hidden complications, such as previous debts. In case of doubt, consult with a lawyer.

When buying, remember that Cartagena, as is the case with other South American resort towns, has its share of contrasts: it is common to find slums next to wealthy neighborhoods. It can be disconcerting to invest in a luxury condo only to find a pocket of wooden shacks next door. Whether you visit Cartagena to enjoy history or to escape from cold weather, the city’s real enchantment is the people and this has no price, not even when owning “hot” property.