“No, I don’t do rentals.”
That’s a phrase I hear a lot when talking to real estate agents in Ecuador. Particularly foreigners who are working in Ecuador as real estate agents.
But I think they’re missing the boat.
Especially now in 2016 as many locals and expats are opting for renting over buying.
Maybe it’s distrust in the local government, or the strong dollar, or earthquake worries. Everyone has their reasons for deciding to rent.
I started my property management business in Guayaquil a bit over 6 months ago and it’s been going great.
And I think it’s a BIG opportunity for other foreigners all over Ecuador.
Ecuador (especially on the coast) just doesn’t have many good, professional property management options.
Many people just lock up their house or condo and leave (which you shouldn’t do in Ecuador due to the risk of break ins of obviously vacant properties).
Plus, a lot of foreigners are only here part-time and need someone honest to pay the utility bills, property taxes and maintain the general up-keep of the property while their gone.
And most importantly, show the house, charge the clients and be the liaison for the tenants when problems arise.
How I do this business in Guayaquil (although I live in Quito) is pretty simple, and similar to what I’ve seen others doing in other parts of Ecuador.
Here’s what I’ve done:
You can start with not even buying a property, like I did. Just rent long-term.
And then sublease for shorter-terms.
Be sure the owner knows what you’re doing at the beginning and is Ok with it.
Find one unit to begin and expand as needed.
Find a unit in a great location for your ideal client (tourists, expats, etc.), with a 24 hour guard/receptionist and preferably in a building or community that offers the same amenities of a hotel (like a swimming pool, gym, etc.)
Find a location with a bunch of eating options around and your guests won’t even care if you don’t offer a restaurant or breakfasts.
You can still beat the hotels in the area, especially for longer stays (weeks to a few months), because your unit has a kitchen, living room and generally more space and privacy than a hotel can offer. Plus, hotels charge per person and restrict guests in the rooms which you won’t.
Having your units in buildings with 24 hour staff means you don’t need to hire ANY employees! I just have one young, nice bilingual guy who I pay to fix problems as they arise and coordinate cleanings between guests which I pay per job as needed getting a “factura” or official receipt making the work contract-work only.
If things keep expanding I may hire him full-time in the near future meaning I’d have one employee.
We leave the key with the guests name on it at the reception and the guest is instructed to request it at check in.
Promote and charge 100% online with prepaid bookings only. Because you or none of your direct salaried employees will be there to charge when guest arrives.
You can also charge a security deposit in advance online with a service like PayPal which you can refund later with a click.
As you expand you can begin to manage other properties in the area for other owners for a percentage of the rent. In my experience, once you’re in the game, they’ll start approaching you!
For instance, in Cuenca and Salinas, two Ecuador expat hot-spots where I see a lot of opportunity for this type of business. You could rent nice, furnished places where tourists want to be in the $3-400 range long-term and turn around and sublease for shorter stays in the $50 a night range.
You’d have to cover the utility bills but in Ecuador that’s not much, so you could net around $1000 a month from one unit. If you keep it full, which I’ve found do-able.
One thing is for sure, managing rentals is MUCH EASIER than managing a hotel or B&B which requires 24 hour employees (or handcuffing yourself to the site)!
To promote AirBnb.com is a great start, but it’s fascinating to me how different it is promoting essentially a vacation rental compared to my 19-room hotel(b&B). To learn more about that fill in the blanks below…