When searching for real estate in Ecuador, one word will often pop up in the home listings, “anti-cresis”.
I know what you’re thinking, what the heck is that?
If you see a property for sale as an “anti-cresis”, basically, you have to pay a sum of money as a down payment, depending on the value of the property, usually around $10-20,000. And that money paid gives you rent free access to the property for a pre-determined amount of time, often 1-5 years. At the end of the negotiated period, you will receive your original money paid back.
So, in other words, it is similar to when an owner of a property takes a HELOC or home equity loan in the States.
Why would an owner of a property do this? You have to understand the financial-environment of Ecuador. Like most developing countries, credit is not readily available, nor cheap. Sometimes the owner is strapped for cash and decides to do this, a quick way to get significant cash without selling a property.
The grave danger for the “buyer” in this type of agreement is that often, when arriving at the end of a contract, the owner simply doesn’t have the money to return, and in many cases collateral is not used (and besides, the Ecuador legal system is not quick or particularly effective). Buyers beware on this one; I don’t recommend doing this unless you really know what you are doing.