Archive | Ecuador for Investors

High-season’s coming: Leaving money on the table on the coast of Ecuador

As we enter November here in Ecuador.

And all the leaves on the trees are exactly the same color as they were the rest of the year…

As the owner of vacation rentals on the coast of Ecuador I’m being constantly reminded of one fact as the email requests start to flood in.

That the demand for home rentals on the coast of Ecuador really spikes upward from late December to early April when all the folks from the northern hemisphere try to escape the winter.

The difference in demand is huge and shouldn’t be overlooked if you own a rental on the coast of Ecuador.

You really can charge double, maybe even triple the rent that you could during the rest of the year.

And you’ll get it! Just be patient.

Especially if you market to both Ecuadorians (who also want to be on the coast more in those months due to the nicer weather) and English-speakers (escaping the winter up north).

A lot of renters will want to enter starting in November and drag into the high season paying the same low-season prices, or pay you months in advance for the whole high season at a discounted rate.

Don’t let them, or you will be leaving serious mu-la on the table.

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Posted in Ecuador for Investors, Investor News/Analysis

Hostal El Viajero died, what happened?

You got to be careful in Ecuador when investing in property, man.

You see, you´ve probably lived your whole life taking for granted a right in the US, Canada or Europe that simply is not held as dear in countries like Ecuador.

The right to sleep in peace.

Seriously.

I remember from my time living in the US if a neighbor was making noise at an unpleasent nightly hour the cops often would beat me to the punch and be over there quieting the people down. If not, a simple call and they’d be there within a few minutes.

Not in Latin America. And not in Ecuador.

Call the cops on a noise complaint. Chances are they don’t even show up.

And if they do show up, the locals probably won’t even take them seriously.

Different culture, different place, different values.

The last 4 months I was leasing Hostal El Viajero here in Quito and using it as an auxiliar second location to my primary business Quito Airport Suites, a small hotel near the airport in Quito.

At the beginning, I saw El Viajero struggling so I swooped in and made a deal with the owner who initially didn’t have plans to lease but instead run it himself.

After a few days I realized what I got myself into.

Right next door was a makeshift, illegal (without permits) dog kennel.

As the weeks passed the kennel grew and at any given moment, at any hour, the dogs could be ticked off and trust me, no amount of sound proofing can help against the thunderous roar of about 50-100 dogs yelping.

We filed the complaint with the Municipal.

We complained to local authorities including the police.

We talked to the owner of the kennel.

Nothing helped, months later the kennel remained, and the hospitality business next door just wasn’t feasible.

I really felt bad for the owner, who must have invested well over a hundred thousand in the construction of an otherwise nice building in a good location. As a renter I simply turned the keys back to him and left.

His problem.

Its absolutely essential before you invest in property in Ecuador to study the surroundings and see if the noise level is to your liking. Cause your surroundings are very hard to change later. You’ll also need a little bit of vision to also see what could be in your surroundings later that may be problematic.

Spend time in an area at different times of the day, and actually spend significant time there before investing. Talk to neighbors. Get the real scoop, you’ll be glad you did.

At the very least, noise level is something you may not even think about before investing in countries like the US because its a non-issue, but its something you should think about in Ecuador.

Especially in some areas the countryside of Ecuador… dog barks and roosters are real noise makers.

In the cities, impromptu parties from a rowdy neighbor or car alarms, vehicles braking and horn beeps can also be an issue.

For instance, is a speed bump right in front of your house? If so, then be prepared to listen to the squeel of brakes at any god-awful hour.

Pass on that property.

In third-world countries across the globe, as in Ecuador, you and your investments are just not as well protected as they are in places like the US.

But not one tells you this before buying.

So due diligence is even more important.

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Posted in Ecuador for Investors, Expat Lifestyle

2013 Ecuador property transaction records: Cuenca, Vilcabamba, Loja and the Ecuador Highlands

The responses are in…

We asked how much you actually paid for property in the highlands area of Ecuador.

And you answered.

These aren’t asking prices, but actual recent values people opened their wallet and spent.

In a country like Ecuador with no MLS standardized system, nor publicly recorded comps (or comparable sales records) and with historically low and unrealistic municipal appraisals knowing how much people are actually paying can be very useful.

And thanks to all those who responded to this inquiry… below are the responses!
Loja area

1. 24 hectares (60 acres mas o menos) en La Paz, a small rural town about half way between Cuenca & Loja. We were able to get it for 60k. It has a pristine biew of the valley, two narrow waterways that supply the water for the towns in the valley, Wild Blueberry treeas all over it & maybe 350ft of roadfront property on the main highway.

Vilcabamba area

1.  Malacatos, near Vilcabamba that I bought in May,2011 for $6.83 m2 that is 11,000m2.

2. bought a house in Vilcabamba for 165K in March 2013, land 3,500 sq m. construction 140 sq m, 3 bedrooms, 2 bathrooms , 2 years old, American standards. Sloping land, landscaped, excellent view.

Cuenca area 

1. Cuenca, South side on Rio Tomebamba. 2 floor penthouse condo with 2000 sf. Bought in Jan 2010 for $70K. Found it in the local paper. Condo is 7 yrs old.
2. Cuenca, 10 min (by taxi) from Plaza de Armas.  $67,000.  apartment, 2 bed/2 bath with (solar) heated water, washer/dryer hookups. one of the bedrooms is en-suite. apartment complex was built in 2011.  apt. is 80 square meters, on the 2nd floor of a 4 story apt. complex.

3. on the Tomebamba River in Cuenca El Centro. $175000.  Penthouse condo – brand new.  150 sq meters – includes 30 meters sq of terrace.  October 1 2013

4. Lot 45 minutes from Cuenca, near Paute $40K gental hill side over looking Paute river.  4295 sq mtr, about 1 acre,  January of this year.  has power and water to it

5. 7 hectare (about 17 acres) finca near Guachapala (it’s halfway between Paute and Guachapala) earlier this spring (2013). It has a 3BR/1bath house (in pretty good shape), lovely rock outcroppings, small pine forest, 800 producing fruit trees of several varieties, large spring-fed pond stocked with tilapia, and the access is excellent. The asking price was $165k and they got it for $150k.

6. Cuenca – edificio fronting Rio Yanuncay $89,500.  Apartment, built in 2010 , 116m2 + parking space & small storage area Bought Jan, 2011.  3 br, 2.5 ba.

7. Chordeleg – rural  $160,000.  Orchard, garden, House, empleada      Constructed 20 years +/-  Land = 5945m2 Main house = 180m2 2nd “house” 65m2 Bought May  2009
8. Cuenca.  first floor three bedroom two and a half bath condo for 100,000.00 USD at the corner of Premier de Mayo and Avineda des Americas in Cuenca. The purchase was made last October and the unit is rented out at $875.00 per month

9. Cuenca. 3 blocks from Tomebamba river away from El Centro at Solano and Crespo $174000.  115 sq meter condo built in 2009 Bought October 2013.

 

Quito area and valleys

1. Centro area, one of the few condos facing Calle La Ronda near the Sur Arco.The purchase price was $38,000. The age of the complex is about 42 years old. The 3 bdrm unit itself is approximately 90sq. metros. The purchase date was in July of 2012.
.2 La Carolina/Quicentro area, across from the Mega Maxi on 6 de Decembre. This 12 floor penthouse suite (1 bdrm) is in a brand new complex. The purchase price was $85,000 and is about 50 sq. metros. The purchase date was May, 2013.
3. Quito, La Carolina $104 000 dollar US condominium under construction, delivery on April 2014.  flat of 60 square meter + parking Bought April 2013

4. Checa: For $ 180.000, in Nov. 2011, I bought a 2 bedrm house, in a triplex, with a third of a wall attached. Gardens to be enamorred by, but at that stage, no Internet nor the promised swimming pool etc… Today, with some of the amenities better established, the same house sells for $230.000. The development will soon include a medical center, the covered and the open swimming pool, a mini-market, and high speed Internet,  well as several other conveniences. By then, it will probably be worth closer to $250.000.
5. Cumbayá in Urbanización Meneses-Pallares near Colegio Menor. The property has 1,360 mts2 of land and the house has 760 mts2 of construction. It has some 17 years of being built. I sold it for $500K.
Ambato, Banos areas

1. AMBATO
-the actual purchase price – 125,000
-the type of property and age – RESIDENTIAL HOME /1994
-meters squared of land and construction – 300 / 344
-approx date of transaction 2006

2. BANOS   three bedroom house in  Banos ( near ambato) for $42,000.  it sits on a large lot but had no wall around it.  the house is brandnew but was not well made. white washed walls,no kitchen cupboards

Otavalo, Ibarra, Cotacachi, Atuntaqui areas (north of Quito)

1. Atuntaqui $31,000 . lot.  5,000m2.  6/2013 with irrigation water [4 blocks closer,  property starts at 25 per meter to 50]

2. North and west of Cotacachi.  $18,000.  Raw land some primary forest 1 hectarias flat, 9 hectarias steep from river to Peaks of mountain, accross river from dirt, drivable road. No buildings, electric, or phone.  We do have our own springs and reliable good quality water.  slightly less than 10 hectarias.  march of 2011

Amazon region
1. Between Tena and Archidona, Napo Province. $17,000 for 2.3 hectares of rural land, adjacent to a river (fertile). Cafe and cacao trees on 1 hectare, no construction.  Bought February 2013.

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Posted in Ecuador for Investors, Investor News/Analysis

RE: How much did they pay for coastal Ecuador real estate?

 

You can ask whatever you want for a property in Ecuador.  Doesn’t mean you’ll get it.

In fact, some are quite ambitious when they price properties in Ecuador.

But in a country like Ecuador with no MLS standardized system, no publicly recorded comps (or comparable sales records) and with historically low and unrealistic municipal appraisals seeing how much people ACTUALLY HAVE PAID recently for property in Ecuador can be very useful.

Today you’ll get to see just that.

Or actual property transaction records for real estate in Ecuador.

This is how much someone actually opened their wallet and paid.  (Not the asking prices!)

And thanks to all those who responded to last weeks question…

-On Ecuador coast, No area specified
100,000 (500m2)  Purchased JUN 2013
ocean front  new gated community   lot on front row  ($200/m2 of land)

Puerto Lopez

1. Ocean view on a hill, road dirt access
$6000 USD (320m2) Purchased May 2013  ($19/m2 of land)

2. 26sq.m suite in the Piedra del Mar hotel in Puerto Lopez we bought last May. We have about $33,000 in it now including appliances and furnishings.  ($1269/m2 of construction)

Canoa

1. $19,000 (June 2012)
Lot in urbanization, roads, electricity water pipes installed
400m2   ($47.50/m2 of land)

2. 5 kilometers west of Canoa and  kilometers north on a dirt road …..location:  17 Hectares @ $1800. per Hectare
Purchased in June 2013

3. Briceno, between San Vicente and Canoa on the coast
$30,000 usd
vacant beach front lot on Pacific ocean
360m2  ($83 per m2)
Purchased 05/2013

4. House with oceanview, 2 bedr 1 bath on 1000m2, poor condition
$22k, FEB 2013.   ($22/m2 if taking into account only the land)
Salinas 

1. We purchased an apartment in Chipipe 4 years ago for 230k. 4 bedroom direct beachfront + Maid Quarters, fully furnished + 1 covered parking space.
2. Salinas. 1 block from beach in San Lorenzo. 2 bedroom, 2 bath condo with 900 sf. Bought in Feb 2011 for $49K. Condo is 10 yrs old. ($583/m2 of construction)

3. Salinas. New construction. 3 blocks from beach in Chipipe. 2BR, 2BA, 1000 sf with pool and rooftop spa and BBQ. Bought in Mar 2012 for $70K. Brand new. ($753/m2 of construction)

4. On the Malecon of Salinas, 4 buildings up from the Hotel Barcelo. A 15 unit condo, and we are on the top floor of an 8 story, 6 year old building. Our unit is just under 89 square meters, is 3 bedroom, 3 1/2 bath with an ocean view. With it came a 2200 square foot finished terraza, with a rest room, and wet bar that is ours, and not part of the common area. We paid $95K. It was purchased April of this year. ($1067/m2 of construction)

5. I bought a house & 2 lots in La Malina (Salinas),$49,000 house is 120 mtrs, 2 bedroom, 2 bath, 2nd lot has 18X36 ft pool.

6. Salinas 45K 8 blocks from beach. 4bd 3ba

7. April 15,2013 we bought a 2000 sq ft, 4 bed room, 4 full baths, 19th floor, 5 year old  condo on the Salinas Malecon for $220,000. We are right on the Pacific with  fabulous panoramic views of the Pacific from every room. The building has a swimming pool, kiddie pool, hot tub,2 designated parking spaces, sauna, gym and full 24hr security.  ($1182/m2 of construction)
8. Salinas Malecon Beach View Condo Salinas
$105,000 Purchased Dec. 2011  170 Sq M interior 50 Sq M exterior terrace
Penthouse Suite – Full Floor 8 floor building 2 units per floor except penthouse level
2 parking spaces in garage
3 bedroom 3 bath total with a separate lock-off suite with 1 bedroom 1 bath and living, dining, kitchenette
Condo required total gut and remodel.  1975 construction ($618/m2 of construction)

9. Chipipe Beach View Condo Salinas
$123,000 Purchased Sept 2013 163 Sq. M includes ‘interior’ terrace with sliding doors
3 bedroom 2 bath w. separate maids qtrs.  1974 Construction
7th floor of 11 story building.  2 units per floor.  Condo requires total gut and remodel  ($755/m2 of construction)

Jama
1. Jama Campay which is a residential resort complex (in process) located north of Jama, south of Pedernales. The preconstruction price of my home in May 2012, with 3 BR, 3 BA, one row back from oceanfront, including appliances, basic furniture and a jacuzzi off the MB was under $140,000.  Prices have increased a little since then.  It is now scheduled to be finished in the first quarter of 2014, which is behind the original completion date (oh surprise.) The condo is approx. 1600 sq. ft. ($940/m2 of construction)

2. -the approx. location  JAMA CAMPAY
-the actual purchase price  $89,500
-the type of property and age NEW CONDO
-meters squared of land and construction 2 BED 2 BATH OCEAN VIEW
-approx date of transaction   COMPLETION END OF THIS YEAR

3. Coco Beach Village – just outside of Jama, Manabi
$200,000 for beachfront lot with shell of house – put $100,000 into it this year (3 bedroom, 3 bath)
1,000 sm of lot and 2,350 sf of house (ground floor) w/roof terrace   ($200/m2 of land) ($459/m2 of construction)
Purchased May 2012 – Moved here August 2012

4. Jama / El Matal
$123,000.  Oceanfront lot
Land only – approx 1900 square meters
Nov. 2008  ($177/m2 of land)
all infrastructure in place, ready to build, gated community with club house, pool.

Santa Maranita 

1. $217,000
4 bedroom infinity pool yard done in paveing stone gated outdoor kitchen. Built about 5 years ago.
approximately 660 sq meters double lot . House is roughly 1800 sq feet on two levels.

Esmeraldas 

1. Colope Esmeralda ,  actual purchase price:$ 30,000.00   type of property : 4ac. / 1 1/2 ac. flat land . Approx date of purchase: Aug. 2013  Any other pertinent facts regarding purchase: Top of hill with ocean view .

2. playa provincia esmeraldas
usd 45,000.  casa 20 years old, 3 floors 4 rooms 2 bathrooms
129 sqm land  180 sqm building
summer 2012

Bahia de Caraquez

$175,000
New Ocean Front Condominium, custom built, 4th floor of 8 story bldg. with balcony, 3 bedrooms, 3 baths.  The living room, dining room and 2 of the bedrooms all have fantastic ocean views.  Inside parking garage and bodega.  197 sq. meters, around 2,000 sq. ft.  (2011).  Pre construction pricing.  ($888/m2 of construction)
Tonsupa

1. in Tonsupa, in September, 2011. I found everything that I had ever hoped for and more, at Playa Almendro Resort. It was new construction, 95% completed, and I was able to choose everything inside the doors, including custom wood cabinets and bathroom vanities.  There is 6 pools, with a 7th under construction, 2 spas,a commercial laundry, mercado, 2 tennis courts, 2 volley ball courts.  My condo is 94 square meters, and the cost was basically $1,000/square meter.  We have agreed to lease our condo on an annual basis for $900/month.

2. Lot near beach but not right on it.  $ 35.00 a square meter….total for 1200 square meters is $ 42.000

San Clemente

1. San Clemente  $75,000
“Townhouse” / condo (Vistazul) Built 2008
130 m2 on two floors, 60 m2 roof terrace, May 2011
(6) – 3 floor buildings (5 to 7 units per building), 1 hectare gated community, 100+ meters to ocean ($577/m2 of construction)

2. 820 sq mts beachfront with 10 ft concrete fence; 12 year old about 2600 sq ft 2 story house, 5 bedrooms 4 bathrooms, large patio and balcony.  $110,000. North San Clemente

3. San Jacinto, Carchi, 98 hectares, 4 hectares in platanos and coffee, cacoa, two bedroom, two bath house up, one bedroom one bath down. 2 kitchens, big patios, beautiful views, cloud forest, four streams, river frontage, tilapia pond, $132,000, purchased in Dec 2012.  ($1346/hectare of land)
4. San Clemente
-the actual purchase price:  $85,000, including parking space and storage locker
-the type of property and age: condo, pre-construction, estimated completion March 2015
-meters squared of land and construction: 1.5 acres of land, 1 unit in 54 unit complex, 1,250 sq. ft, 2 bedroom, 2 bath, plus 250 sq. ft balcony
-approx date of transaction: Oct. 2012  ($733/m2 of construction)

5. Beachfront 3 bedr 1 1/2 bath house $100k Sept 2013.
Ayangue

$75,000
Vacant land right on the beach
600sq meters
approx date of purchase: 9/11/13  ($125/m2 of land)
Puerto Cayo

1. Lot in Gated Community.  $82,000
beach front property (new subdivision)
1250m2 (May 2012)
lot is right on the water… community has pool, club house, tennis courts, street lights, sidewalk etc.  ($66/m2 of land)

2. Mirador San Jose NEAR PUERTO CAYO
I paid around 24000$ but I’ve received 15% off on the original price because me and my friends bought 3 lands.
nobuilding yet, I have 5 years to built something
lot is 2160 meters squared.  (May 2013)
gated community, 400m from beach, board walk, 40 min from Manta   ($11/m2 of land)

3. puerto cayo 4000 square meters … cleared…city water…..1/4 mile from ocean with 180 view of pacific and 180 view of foothills….14.50/square meter….buying now.

4. 1. Lot in Gated Community.  $140,000
beach front property (new subdivision)
1000m2 (Sept 2013)
pool, club house, tennis, paved roads, common areas, social event center.   ($140/m2 of land)

Manglaralto

1. beachfront lot
$45/m2,  4400m2 total $198,000.
Nov 2012

2. 2 bedr/2 bath condo on the beach right next to Montanita in a gated community with amenities for $112,000. It will be finished in August 2015.

3. 800 metros Via Dos Mangas, Manglaralto, Santa Elena. One km from beach
actual purchase price: $20,000
Bare land, 2000 M2 land, no construction
December, 2012   ($25/m2 of land)

 

Montanita

17 room Hotel with stunning oceanview near the point in Montanita
Listed at $390,000… sold $230,000, APR 2012.
Olon

$185k
2 story house one block off ocean 4 bedr, 3 bath with balcony
Manta
1. Cuidad Del Mar, 100 meter condo, Plaza Del Mar
Overlooking the ocean, best subdivision on the Coast, Fully Furnished
2 bedroom, 2.5 bath, storage, parking space
Built 2012.  $154,000
2.Central Manabi near Pichincha.
$165,000 us
Farm land no livable structure (has primitive costal farm house with open air type construction…. Stilt house is the best way I can describe it, but not livable to US standards)
90 HA
Purchased April 2013

 

3. Manta
92,500
condo, 3 years old
90 m2
Aug 2011
4. Condo with oceanview in highrise beachfront
new construction
$225,000 (1800 ft2 or 167m2)  ($1347/m2 of construction)
5. Manta
180,000
condo on the beach, new construction
150m2  ($1200/m2 of construction)
Aug. 2011
6. Manta
68,000
condo, ocean view, new construction
78m2  ($872/m2 of construction)
Feb 2012
7. Manta
205,000
Condo on the beach, new construction
153m2 ($1340/m2 of construction)
Dec 2012
8. Manta
200,000
Condo on the beach, new construction
150m2 ($1333/m2 of construction)
Dec 2012
9. Manta
225,000
Condo on the beach, new construction
150m2 ($1500/m2 of construction)
Dec 2012
10. Manta
80,000
condo, ocean view
78 ($1026/m2 of construction)
Mar 2013
11. Manta
30000
land in development
900m2
Apr 2013
12. Manta
110,000
Condo on the beach, new construction
70m2 ($1571/m2 of construction)
July 2013
13. Manta
250,000
Condo on the beach, new construction
150 m2 ($1666/m2 of construction)
Sep 2013
14. Manta
7,500
land in development
230m2
Aug 2013
15. Manta
95000
condo, construction just completed
100m2
Aug 201316. Manta.  $169,000
6th floor condo, 3 bedroom, 2.5 bathroom, 1 garage & storage, big deck of the spare bedroom, giant deck of living room
living space 118 MS, decks 105 MS
August 2012
2 blocks of the beach, fantastic view

 

Punta Blanca

900 m2
close to, but not ocean front
land only
$45 K   2013 APR  ($50/m2 of land)
 Santa Elena (near Salinas)

$80,000.  concrete house 3/3 con casita y piscina grande, appx. 30 anos
5000m2 lot.  Oct. 10, 2011 house is beautiful with fruit trees.
Crucita

1. $21,000
Beachfront lot gated community
374m2 ($56.15 per m2)

2. $65,000
4 bedr, 2 bath house
15 yrs old
beachfront, good condition
APR 2012

Playas

1. PLAYAS Duplex 2000sq ft 2 units 3 bed 2 bath. Beach front  concrete built 5 years ago. Purchased 2012. $105000

2. 4 bedr 3 bath house 2 blocks off beach, small oceanview.  20 years old.  $38k.  Purchased APR 2012.

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Posted in Ecuador for Investors, Investor News/Analysis

The top 7 can´t miss ´bargain´ hotels of Ecuador

Come on.

Just admit it.

One of the main reasons you are even interested in Ecuador is because you want to improve your lifestyle while at the same time lower your cost of living.

At least the possibility of such intrigues you.

Well, here are my hand-picked top 7 best-value hotels in Ecuador.  Bargain, nice places that should charge a lot more than they are.

Places where you can feel pampered and pay a small fraction of the cost you would back home.

But most of these aren´t easy to find nor easy to book beforehand (many of them don´t even have websites!)

Maybe these aren´t the cheapest choices out there, but they are the best bang for your buck in their given area.  Here goes…

7. Hotel Prado Internacional (Loja, Ecuador).  This hotel conveniently located right on the other side of the river from the old town in Loja is a four star quality hotel at two star prices.  There is an elevator, an elegant, open full time yet often empty rooftop restaurant with amazing food (try the bacon-rapped Filet Mignon in mushroom sauce for $6), a very friendly staff headed by the owner, Lucia, who speaks English.  The hot water is good, WIFI in room and the rooms are elaborately decorated.  Can´t beat the value for price, singles start for $26/night and doubles start around $39/night.

6.  Hotel Canoa Mar (Canoa, Ecuador).  This hotel is right on the beach in Canoa within walking distance of the town center yet just far enough away not to hear the discos blaring music.  The style of the hotel (laced with bamboo) is just what you´d expect from a hotel in the area.  There is hot water, WIFI in room and each room has its own carefully thought-out design… all for $10 per person.  I stay here when I´m in town.

5. Hotel Hugo´s Place (Montanita, Ecuador).  One block from the beach and a girl´s throw from the center of town, this 2013 newly inaugurated hotel in the center of Montanita is hard to beat for the price.  The rooms have a beautiful oceanview and are nicely finished with cement (to prevent noise and critters from entering), WIFI and hot water are available and rooms start at $10 per person ($12-15 on weekends).

4. Copalinga Nature Lodge (Zamora, Ecuador).  No trip is complete to Ecuador without venturing into the Amazon, yet most eco-lodges (like Kapawi) charge upwards of a hundred dollars a night.  Copalinga has beautiful cabins available right in the thick of the rainforest and within a short walk from the National Park Podocarpus.  Amazing for bird watchers, as dozens of Hummigbirds often buzz around you as you dine for breakfast in the morning.  Prices start around $23.50 per person for one of the older cabins available, newer more luxury ones are also available for about double the price.  Worth every penny.

3. Posada del Rio (Cuenca, Ecuador).  For me, the most stunning area of Cuenca is where the old town meets the Tomebamba river.  Thats where I want to be whenever I go to Cuenca, plus you are right in the middle of everywhere you want to go.  Built into a refurbished old colonial, just as you´d expect from Cuenca, the Posada del Rio is right along the river and several rooms have stunning views of the trickling brook.  This is another lodging option with rooms much nicer than what you would expect they rent for, hot water, WIFI and room service is available.  Rooms start around $15 per person.

2. Izhcayluma (Vilcabamba, Ecuador).  As a hotel owner myself in Quito I have the chance to chat with travelers almost everyday, and almost everyone I talk to who has stayed in Izhcayluma has nothing but great things to say about it.  Pamper yourself getting a treatment in the Spa, soak in the pool, horseback ride, bird watch, hike the trails through the green hills or even visit a sugar farm and watch the process of sugar making.  The service is top notch, the grounds well maintained… single rooms with private bath start around $28, doubles $38, shared dorm beds are also available for $12 each.  Hard to beat the value for your buck in Vilcabamba.

1. Hotel Gala (Baños, Ecuador).  This hotel, mainly frequented by local Ecuadorian tourists, has gorgeous mountain views and is right on the edge of the quiant town of Baños.  Its my pick whenever I´m in the area.  The rooms are borderline luxury, some may even hint at four star quality, and are very spacious.  The hot water is good and plentiful and the decoration is elaborate.  You are also within walking distance of the town center and the spas in Baños.  The only drawback is as of writing there is no WIFI, but sometimes its good to disconnect.  All for bargain prices starting around $12 per person.
 

Got a suggestion for this list?  Submit it here to the Q/A forum…

 

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Posted in Ecuador for Investors, Expat Lifestyle

Don’t move to Ecuador before reading this: Moving to Ecuador 101

 

“Man, this dude is clueless!”

That’s a thought that often passes through my head as I meet new arrival expats in Ecuador.

But if I moved to a new country cold turkey, the same would happen to me.

But after today’s primer you no longer can plead ignorance… here’s what you need to know before you go:

1. Handle your assets correctly.

Sell depreciating assets like cars, if you leave them whenever it is you try to sell them down the road they will be worth less, a lot less!  They are just chuncks of metal.  Replaceable.  And DON’T liquidate ALL your assets and properties if they continue to make you money, what are you going to do with all that cash in Ecuador?  Lose it, that’s what.  Ecuador is a good place for you but maybe not for your entire savings.  That’s just being a plain da** fool.

2. Know what to bring.

There’s a lot of things that are grossly more expensive in Ecuador than in countries like the US.  Bring all the electronics, brand name clothes and perfumes you are going to need.  Brand name shoes too.  Big screen TVs are also much cheaper in the US.

3. Know what NOT to bring.

There’s a lot of things you can easily buy in Ecuador for around the same price as in the US or cheaper.  Towels, sheets and things like coffee makers, irons, plates and kitchen utensils can easily be found in your nearest SUPERMAXI or MI COMISARIATO (big box stores in Ecuador).  No need to bring!

4. Cell Phones.  

Before you leave the US be sure your expensive smart phone is UNLOCKED and accepts insertable SIM cards.  If it doesn’t or isn’t, than leave it in the US, cause it won’t be any use to you in Ecuador (which works on SIM cards).  I’d say even if it does accept SIM cards I’d still be weary about waving around one of those big fancy Samsung Galaxies or whatever, here in Ecuador, having a nice cell phone makes you a target for thieves.

It’s true, thieves will judge you based on your cell phone, if you maintain a cheapy ‘dumb’ phone you could live in Ecuador for years without anything happening to you.  I myslef have a simple ‘dumb’ phone (I know Ecuador too well to have anything else).

Once in country, to pick up a SIM card visit any CLARO or MOVISTAR store and ask if they have any SIMs for sale, its the same in Spanish.  Get a Claro SIM if you plan on living in Cuenca or the coast.  Movistar if you plan on living in the Quito/Cotacachi/Ibarra area.

The card costs $7, you insert it in your phone and you have an  instant Ecuador phone number you can add minutes to in any cell phone shop or pharmacy in Ecuador.  Many local street stores also offer the service of adding prepaid minutes (recargas).  To get a cheap phone starting around $40 try a mall in one of Ecuadors big cities before going to your final destination… in Guayaquil try the cell phone shops in the bus terminal, in Quito, Id go to EL ESPIRAL shopping center.  Don’t buy used phones off the street, they may be stolen.

5. Managing your currency.

News flash.. Ecuador uses the US dollar as the official currency.  But it can be very hard to make change in Ecuador, and most merchants simply won’t accept $50s and $100s, so dont bring any bills larger than $20s!  Travelers checks are a definite NO NO.  Bring an ATM card attached to the Cirrus network and you can withdraw from about any ATM from your US account.  For large transfers don’t try to bring it down in cash!  Instead, contact your bank in your home country and commence a wire once you have an account to wire to in Ecuador.

6. Opening a bank account.

Most banks in Ecuador won’t open an account for you unless you have a CEDULA and are a legal resident in Ecuador on a resident visa.  You could have a friend recommend you to his bank (which helps a lot in Ecuador), also try the smaller banks like Banco Promerica which seem t have more lenient policies about opening accounts.  Either way, dont have a lot of money in there, there are only 2 banks I’d trust in Ecuador, Banco Pichincha (the biggest bank in Ecuador and where most the locals have their money) or Banco Pacifico (already owned by the goverment).

7. Finding a place to stay the smart way (don’t make any prior reservations for rentals).

I’m weary about finding rentals online before I arrive in a place, because you really are clueless about the area, accept it.  I’ll never forget a few years back when I moved to Santo Domingo, in the Dominican Republic.  I arranged a rental online before arriving and it was right in the middle of the ghetto, literally on the wrong side of the river in the city.  And like most rentals I had alreayd paid a non-refundable deposit plus the first months rent.  Dumb.

Not just for the price, but for a lot of reasons I recommend you do it the right way and stay in a cheapy hotel until you learn the area a bit and search on the ground for the rental that is really right for you.  You can often strike deals with many of the cheapy hotels in Ecuador to give you a weekly or monthly rate.

8. Getting connected to the internet.

In the big cities of Ecuador, getting connected in your home is easy, just go to your nearest CNT or Claro store and hire the service, within a few days they will be installing the internet in your home, doesn’t matter if you are a renter.  Decent plans start around $20 but if you want a faster interent experience pay for one of the plans around $50 a month.

In the small towns of Ecuador the internet is NOT a given so inquire beforehand!  If no internet options exist you can always get a Mobile WIFI HUAWEI stick you plug into the wall or your PC from a service provider like Movistar.  In that case, if there is cell phone coverage you can connect to the internet.  Plans start around $35 a month you can get unlimited internet, but this last option is by far the slowest (almost similar to dial-up).

9. Paying utility bills.

As a renter, you will most likely be required to pay your own electric, water and other bills.  The easiest way to pay them is go to the nearest SERVIPAGOS or WESTERN UNION office and pay them cash.  Some banks also offer the service, just be sure the bills dont expire or you’ll have to go directly to the provider to pay.

10. Learning Spanish on the cheap.

If you try to learn Spanish in the US or online before coming than you just wasting your time and money.  US universities will charge you thousands, private tutors in the US often cost upwards of $20 an hour and you’ll still forget everything they teach you cause you’re not using it.  Even programs like Rosetta Stone are not a good idea… in the US you probably paid $400 for it, in Ecuador you can find a copied version for $10.  Just sayin…
But I’d pass on all those programs!  Instead wait until you are in Ecuador to learn Spanish, and take a class from a local tutor , many would be happy to teach you one on one for around $5 an hour.  Once you got a hold on the grammar, try to read the paper everyday, once you got vocabulary, try to watch the TV everyday in Spanish for comprehension and try to make some local friends that only talk to you in Spanish.  Any age can learn cheaply following that method.

11. Visas.  

Have a clear idea of what type of resident visa you want before you come.  Ecuador is not a good place to simply border hop continually everytime your visa is about to expire like you can in Thailand or Costa Rica.  There is a limit.  Get a resident visa based on an investment, job, pension or on something more creative like a religious mission.  For any of the above visas bring the required docs with you from your home country… the base are 2 copies of an aposstilled birth certificate, marriage/divorce certificate (if applicable) and an aposstilled police record check.

12.  Getting around like a local.  

Don’t be afraid to take buses in Ecuador as a new arrival, they are plentiful and cheap and their destinations are marked on the front.

I remember as a new arrival in Spain with no Spanish skills I was afraid to get on the city bus to school cause I didn’t want to get lost with no Spanish skills, so I walked over 30 minutes to school and back everyday in the freezing cold Madrid winter.

Taxis are also cheap in Ecuador but ask how much they will charge to your destination before you get in.  Know that the drivers will always say they know where your destination is whether they really know or not, you have to learn to read their body language to see if they really know or not.  Ask locals how much a taxi ride should be before approaching a taxi.  Also, know that airport taxis are always more expensive and especially abusive so if you can get picked up or take a bus from the airport all the better.

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Posted in Ecuador for Investors, Ecuador Q&A

You’re fired! – What happens in Ecuador

“Hey, step into my office for a minute.”

“Don’t sit down, this will only take a second.” I continued.

“You’re fired, get the f**k out.”

OK, so this wasn’t exactly how it went down eariler this week.

But can’t blame a guy for dramatizing once in a while.

If you’ve met me, you know Im a soft-spoken guy, don’t think I could do it like that.

But due to a change in business circumstances, I unfortunately had to let someone go.

In Spanish, as in Ecuador, its very clear cut. Someone either quits (renunciar) or you fire them (despedir).

Theres no wishy washy middle ground like “laid off” or “let go”.

And when you have to let someone go, as I did this week, its a little different down here.

You have to “liquidate” them meaning pay them a final one-time “severance” payment equal to 25% of all the salary you’ve ever paid them plus any unpaid bonuses due to them.

But first, when you fire someone in Ecuador, or if someone leaves your business voluntarily, you have to go see an accountant who makes the official document (Acta de Finiquito) that needs to be filed with the Social Security Department (IESS) and Ministry of Labor (Ministerio de Trabajo).

Then, a date is scheduled when both you and your employee will have to go in front of an inspector where you will have to pay your employee their liquidation (severance) settlement and both sign off.

Theres really no way to get around this legal process nowadays in Ecuador or your employee can sue you.

Except if you hire the right way.

Which I didn’t this time around. In my case, for an employee I hired making a bit more than the minimum wage who worked for me for 3 months, Im going to have to pay her around $450 for her liquidation.

For instance, one loophole i recently discovered that will allow you to legally not pay the extremely costly 25% lump sum severance payment to your employees in Ecuador when you let them go is to hire your employees on a temporary limited time contract… say for one year.

At the end of the year you let them go for reasons of “contract ending” and then you don’t have to pay them the 25% lump sum liquidation of all the salary they’ve earned while under you. You will only have to pay a much smaller amount equal to any unpaid bonuses due to the employee for that year.

You can then do like most and maybe give them a few weeks off and then hire them back.

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Why dont I receive my mail from abroad in Ecuador?

Since moving to Ecuador, I´ve had quite a few things mailed to me from my original home, the USA.

Problem is… at first, the packages never got to me!

Online the tracking numbers indicated they had arrived to Ecuador. But they still never arrived at my home.

So what happened?

Finally, I figured it out.

Whenever someone mails you something from abroad using the general post, even if they mailed it to your exact street address in Ecuador, it doesn´t matter, it will most likely never make it there.

Instead.

Once you´ve verified the package is in Ecuador via a tracking number that is checkable online…

You have to go to the main office of the post in Ecuador (Correos Ecuador) in your city to pick it up. They may tell you that your package is in the head offices in Guayaquil or Quito.

Go with your passport or cedula, be prepared to pay at least a small fee, usually around $5 and you will be able to pick up your package. Having the original tracking number helps but isn´t absolutely necessary.

But careful, if you don´t go to pick it up within a sort time they will send it back to the original home country.

And they will NEVER inform you of any of this.

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Posted in Ecuador for Investors, Expat Lifestyle

Growing palm oil in Ecuador, profitable or not?

“Jeeze, I’ve never seen a road like this,” I thought, this week, as my teeth rattled and face winced along one particularly trying road deep in a palm oil grove.

I was in one of the top places in Ecuador for palm oil growing, La Concordia, a small town tucked deep in the sticks about a half hour from the rough and tumble city of Santo Domingo, Ecuador.

You gotta put your money somewhere.

Keeping it invested in paper US dollars is a well-documented no-no.  Gold may be a better bet, but lets face it, if sh#t really hit the fan, people don’t need it, they need food, they need water.

That’s why one of my next plays will probably be in an agricultural investment, and honestly, its hard to  beat Ecuador for that.

The land is so fertile (and relatively inexpensive).  And farm hands come cheap.

There’s so much water.

Need a specific temperature?  Just find the right altitude in Ecuador, cause its there.

My Ecuadorian friend, and also active palm grower, who I met at a conference I was teaching at this week in La Concordia began to explain…

“Palm Oil is one of the most profitable crops Ecuador has to offer.  At least in this area.”  He started.

Palm Oil is mainly used for cooking, and primarily exported.  The oil is obtained through the fruit this particular variety of palm produces.

palm oil farm ecuador la concordia

The harvest…

Palm oil trees begin to give fruit around year 2, and continue to do so until they are about 25 years old.

Once harvesting begins, you’ll continue to harvest every 20 days for the life of the plant.

One big plus of this product is that it is relatively NOT very labor intensive.  No constant watering is needed.  There is a rainy season, starting in January which then goes for a few months, and that is when the plants receive the water table they need for the year.

The costs…

Most small to medium sized palm farms (20 hectares or less) don’t even have any full time employees, just one live-on watchman.

All farm owners do is hire two guys to come to harvest every 20 days.

One plucks the fruit off the trees with a hook, the other one loads the fruit on the donkeys which take it to the trucks which then take it the nearest factory that proceeds to cook the plant and extract the oil.  They are paid based on output ($15 per harvested ton).

This is another one of those products where no marketing is needed.

You make it, you’ll have a buyer, which is usually the nearest production factory.  As a marketing guy I appreciate that.

The only thing that changes is the market price.  Which for this product doesn’t fluctuate too greatly which usually resides between $150-250 per ton.

Farms start to become particularly profitable when they are at least 20 hectares large.

Each hectare can fit 140 palms.

You can buy the palm trees an inch tall for $1.  Or you can buy them already a year old for around $6.  The best time to plant new palms is in late December or January when the rainy season begins.

You’ll need to invest about $1 in fertilizer per plant twice a year to keep the plants healthy.

You’ll also need to pay a worker $.15 cents per plant to clean the shrub away from around the basin of the plant.  Three times a year.  This comes to about $63 per hectare per year.

You’ll also need to fumigate 2 or 3 times a year which costs around $50 per hectare.

You’ll also need to pay the trucks (considering you dont have one) about $5 per ton for them to haul your product to the processing factories.

“My costs usually run around 20% of my sales in this business.” My friend continued.

Why palm oil?…

One big benefit is that palm is not something that is often stolen, like other crops, due to the weight of the product and also that the factories will not buy stolen product.  They will only accept product with registered tax Id numbers (RUC).

Also, due to the low maintenance and lower risk of robbery, being an absentee owner is more than commonplace, it is the usual.

So no, you don’t have to live there,

Possible sales and profits…

Each hectare of producing Palm can produce on average 2-3 tons of product every 20 days.  The really effcient farms, like a few in Ecuador and many in an experienced Palm oil producing nation like Malaysia, can often produce up to 5 tons of product per hectare.  Each ton sells for the market price which fluctuates around $200… leaving $150 in profit per hectare for the farm owner…

So for a 20 hectare farm that means in the worst case scenario with low market prices ($150/ton) and a farm producing a mere 2 tons per hectare would produce $6000 in monthly sales and leave a profit of around $4000-$4500 a month.

For that same 20 hectare farm at the best case scenario with higher market prices (around $200/ton which the factory pays you the farmer) and a highly efficient farm producing 5 tons per hectare the monthly sales can be as high as $20,000 per month.  With about $13,000-15,000 of that being the estimated profit.

The investment and ROI…

Land ideal for palm growing in the area that is not harvested can be had starting around $3000 per hectare.  But you’d have to wait 2-4 years to start harvesting.  Producing farms with plants in full harvest in the area start to sell for around $5,000-8,000 per hectare.

This week I’ve visited a few 20 hectare sized farms for sale with producing plants for sale in the $6k per hectare range.  So assuming even the low ball figures gathered from friends in the area, that same farm acquired for around $120k could get its money back within 2.5 years.

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1 Costly Mistake when Buying a Business in Ecuador

 

When I first bought the Guayaquil hotel business with a friend of mine 2 years ago I made this mistake.

And it was costly.

And I see a lot of foreigners who buy in Ecuador do the same thing cause they’re ignorant of Ecuador employment law.

The mistake I made was I didn’t ‘clean house’ and start new with my own employees when I bought the business.I inherited one employee from the past regime who stayed on.  For a while.

I didn’t realize the mistake I made until I had to let him go.You see, in Ecuador when you fire someone, or lay them off, or they leave, you have to “liquidate (liquidar)” them.Meaning you have to pay them a lump sum severance payment equal to 25% of all the money they’ve made while working for you.

For instance, for a minimum wage worker in Ecuador making $318 a month, letting them go after one year of work would mean a mandatory severance payment of about $900.

So what most Ecuadorians do, and what you must do too when buying an active business in Ecuador, unless someone is actually vital to the business, when you buy a business in Ecuador have the previous owner liquidate and get rid of everyone.

It may not feel good, but “negocios son negocios” (business is business).

Because if you keep them on whenever it is they leave you will now have to pay them the liquidation payment for the entire time they have worked for the company, even though the company changed hands, doesn’t matter.  And the employee can sue you if you refuse to pay it.

But the person selling you his business won’t tell you this!

Oh no, he’ll say things like you should keep the employees, they’re great workers and very loyal… yea, yea, yea.  After all, it’s better you liquidate his employees after he’s out of the picture than him now.

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5 years on the coast of Ecuador, a unique perspective

manglaralto ecuador

The beach just south of Montanita, Ecuador.

 

Perspective.

You get it after spending time in a place, and boy is it helpful when investing in property.

Some areas of the coast have stayed drearily the same since 2008 attracting little internet nor foreign investment.  While other areas have flourished.
And since most of the expats in Ecuador have arrived after 2009 when International Living Magazine began really pushing Ecuador its rare to hear an honest 5 year perspective from someone who was on the coast of Ecuador before (me in 2008) while researching for the first version of my now-somewhat famous Insider´s Guide to Flipping Properties in Ecuador.  

 

This was before I lived here full time.  I´ve now been here two years now as a full time resident.But I still remember my time on the Ecuador coast in 2008 like it was yesterday.  And my trip from Esmeraldas down to Salinas setting up shop in each little town I came across.

 

Well I just completed the trip again, in August of 2013 going from Salinas to Esmeraldas, town by town, researching for my new Map Pocket Guide to the Coast of Ecuador.  

 

So what are some of the biggest changes Ive noticed on the coast from then to now?

 

Salinas is about the same as it was 5 years ago.  Prices are roughly the same, so is the level of development.  You can find a nice oceanview condo in a newer building starting around $80-90k and up.  A block back or in older buildings you can find condos for half that, same as in 2008.

The beachfront of Playas has really boomed since 2008 with tourism businesses, while the areas north and south of town have also been developed and bought up primarily by the Guayaquil weathly.  When in 2008 the property here you could get for pennies on the dollar, now its hard to find a beachfront home for less than $100k.

Heading up the coast in the small towns of Ballenita and Ayangue pretty much look the same as they did 5 years ago with relatively the same prices… with one exception, the beachfront properties have soared.  In 2008 in these places you could still find small, vacant beachfront lots in the $10-20k range, now if you can find the vacant lot it would be almost triple that.
Montanita has experienced an incredible boom!  In 2008 there were just a handful of hotels made out of bamboo sticks.  And you could find a house right in the center of town on the beachfront for $50k, (like I did, but I didn´t pull the trigger which Im still bummed about) or a vacant beachfront lot in town for $30k.  Now forget about it, the place is a true tourist mecca on the coast and there is very little for sale for anything under $100-200k right in town.  The difference, the local Ecuadorians discovered the place.  Now you will often see more Ecuadorian tourists than foreigners on a given day and the businesses that have come in reflect the new target for the local businesses, the Guayaquil and Quito weekend getawayers.
Continuing north, in Olon the area called ¨Oloncito¨ has really attracted a small army of foreign buyers skyrocketing the prices where Ive seen nice American-quality two story homes a few blocks back from the beach be sold for $160-190k.  However, the town of Olon has not changed much since 2008 with just a few foreigners which have now bought right in the center of town.Further north the San Jose area, a favorite of the Guayaquil wealthy to have a beachfront hacienda, still pretty much looks the same as it did in 2008, with the same high prices (if you can find anything for sale).  Hard to get your hands on one of these beachfront cottages on 1000m2 of beachfront for under $150-200k.Then comes Ayampe, a tiny town that was completely overlooked in 2008 when one guy pretty much owned the whole place and was willing to sell you any piece you wanted for around $10 per m2, now is the perfect example of what just a few foreign buyers buying in can do to the local prices with land prices now often 4 or 5 times that.Neighboring Las Tunas and Salango still pretty much look the same as they did in 2008, dreary fishing villages void of foreigners and investment.

Puerto Lopez now has a much more developed beachfront with the malecon extending from one side of the bay to the other, in 2008 the development stopped at about the estuary.  The rest of the town still looks the same.

Heading further up the coast Puerto Cayo, San Lorenzo and San Mateo still pretty much look like they did in 2008… as lazy, seemingly vacant, fishing villages with little development.

But there is building (by foreigners) going on in Puerto Cayo.Santa Marianita, the top beach in Ecuador for kite surfers, also still pretty much looks the same as it did in 2008, but the northern end is now thoroughly developed with villas cut into the terraced cliffs.

Manta still looks relatively the same as it did in 2008, but with several new beachfront towers.  Prices have risen too, now many beachfront condos start around $1200 per m2.  The area that has really grown is the area just south of the city of Manta with several new monsterous developments that have been built or are being built.

Continuing north, Crucita in 2008 was a hole, an ugly little fishing village and party town for young people from Quito.  Now the beachfront has really been revamped with businesses and investment and there is a steadily growing expat community, all of which have arrived within the last three years or so.  Just a year ago you could have found a nice two story house right on the beach for $65k like a friend of mine did.

The beachfronts of neighboring San Jacinto and San Clemente have really soared in prices and been improved with development, attracting a steady new contingent of expats, but from a block back from the ocean onward the towns still look the same as they did in 2008.
Further north, Bahia has had many of its buildings renovated and its streets cleaned, but it still looks about the same as it did in 2008, still more a playground for the Quito wealthy with over-priced real estate as it was in 2008.While the towns heading north from Bahia (San Vicente and Briceño) still look the same as in 2008 even with the new bridge… Canoa has really exploded!  In 2008 you could find beachfront land in the $10-60m2 range, now the average range goes starts more around $60-90m2 and up.  A close second to Montanita, there are now about 10 times more hotels and restaurants than in 2008.  Along the southern end of Canoa many foreigners have bought in and are building their own beachfront villas or condos.  Another place local Ecuadorians have just recently discovered and is a hot spot for weekend get aways.Heading north from Canoa, it gets very remote and very green very quick, as it did in 2008.Besides for a few small yet flourishing developments like Coco Beach near Jama with 1000m2 beachfront lots starting around $70 per m2 or totaling $70k, this whole stretch of coast until Pedernales as well as the rather rough-looking city of Pedernales with an unattractive beach still looks about the same as it did in 2008.

Heading north from Pedernales the towns of Cojimes, Mompiche, Muisne, Same and Sua all of whoch have expericed very little to no foreign investment nor significant move in prices since 2008.

Of course, with the exception of the newish 5 star all inclusive resort near Mompiche, Decameron, which didn´t exist in 2008.

But I was surprised to see how little spillover the new resort has affected the town of Mompiche, which still looks about the same as it did in 2008 (with very few tourists) before the resort went in.

Atacames, as it did in 2008, continues to have a thriving beachfront area and a seedy underbelly that caters almost exclusively to the Quito weekend get away crowd.  But there has been little noticeable new development.
Tonsupa, just to the north of Atacames, has really exploded, but it has followed the mold of Salinas in that the explosion is not meant for tourists but for the affluent Quito locals looking to have a trophy beach condo they can visit 2 or 3 times a year.  The number of condo highrises now rivals that of Salinas. In 2008 there were many less.

Esmeraldas hasn´t attracted much investment at all and is still the same seedy city you wouldnt want to walk around after dark.

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When to buy, rent or visit on the coast of Ecuador?

when to go to coast of Ecuador

Businesses close their doors.  Even hotels lock it up.

Not a soul in the streets except the occasion street dog.

It´s cloudy and a bit brisk… everyday.

Welcome to the low season on the coast of Ecuador.

It also happens to be the best time to search for and buy real estate.  You´ll find many more properties for sale and eager owners looking to sell at bargain prices.

So when is the low season?

Depends where you are on the coast.

Right now, in August, we´re right in the middle of low season on the southern coast, from Manta down to the Salinas/Playas area.  Low season on the southern coast or area south of Manta is generally from May to early December.

High season from Salinas to Manta is from late December to early April.  If you have a rental, take advantage and jack up the price, cause you´ll still be able to find a renter.

Its the sunniest time of the year with blue-bird days mixed in with the occasional rain storm.  It also happens to be when North Americans are looking to escape the dreadful northern winters.  It´s also when school children along the Ecuador coast have their summer break meaning Ecuadorian families are traveling in full force.

On the northern part of the coast, or from Manta to Esmeraldas, it´s different and more complicated.

The high season is from late June through August, when Quito and the highland people have off from school.  The immediate days around Christmas, New Years, easter week (semana santa, April) and Carnaval (in February) is also high season and very packed.

At least on the beaches in and around Esmeraldas the sunniest months of the year are August, November, March and February.  The rainy months are December, May, June, July and October.

So in the low season …buy… in the high season … sell (but you´re not going to want to, cause your place will probably be rented at a good price).

And for renters, I´d say no reservation is needed for low season stays, you can often find options simply upon arrival, but for the high season reserve months in advance!

And if you´re forced to look for sun in the middle of the year, go north my friend.

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The top beach in Ecuador to find cheap beachfront real estate right now?

This is part 3 of 3 in this series on where’s the cheapest, undiscovered places to still find your own small piece of the beach in Ecuador in August of 2013… front-line beachfront lots for personal use preferibly under $15k or a beachfront house under $50k.  
Today’s pick might surprise you.
Chances are you’ve never seen it mentioned before now.
Actually, most Ecuadorians haven’t even heard of it, but it’s just minutes from one of the top tourist destinations on the coast… Atacames.Sua.Sua is a tiny, little village on the sea where most of the inhibitants work in agriculture or tourism (in the nearby town of Atacames).  There are only a couple hotels sprinkled through the town and barely a hint of tourists.

But unlike many small, undeveloped towns on the coast of Ecuador it’s NOT a fishing village!  Meaning no ‘fishy’ smells, no hooks baried in the sand waiting to be embedded in your foot, nor ugly fishing boats docked just off the beach.
And the beach is a beautiful little cove with white sand and sapphire-blue transparent water.And it is arguably the best beach for swimmers in all of Ecuador with table-top flat, still water and with little boat traffic.
And now as I sit here in August, the sun is out, which is a rarity for this month further south on the coast.
The locals are friendly, vibrant mulattos used to the sight of outsiders being just a 5 minute Tuk-tuk ride from Atacames.Food.  Forget about it!  Its amazing, you’ll love the Esmeraldas food, primarily seafoods marinated in coconut juice and other spices.  (Encocados)Both along the boardwalk in Sua and particularly in neighboring Atacames you’ll find plenty of good restaurants.  Hospitals and shopping centers can be found in neighboring Atacames or 25 minutes away in Esmeraldas.

And did I mention there are MANY smaller properties available right on the beach for sale by private owner… front-line beachfront.  Most have ‘for sale’ signs, some don’t.

One two-story house is asking $62k.  Another is asking less than half that but it is a tear-down, only the beachfront lot is worth something.  There is also a 14-room beachfront hotel for sale asking $200k (negotiable).

It’s a true buyers market, a low-priced hidden gem, which can’t be said for many beaches further south on the coast.

Did I mention, you’re also just a half hour from the nearest airport (in Esmeraldas)?

But is it safe being near Esmeraldas and so close to Colombia?

Well, this place is south of Esmeraldas, and Esmeraldas is actually much farther from Colombia than people realize, being several hours south of the border.  So in my experience, you’re fine.  Esmeraldas itself gets a bad rap but the locals are actually quite friendly and Sua is still a bit of a distance from the city itself.
One negative to buying beachfront here might be that for many of the properties there is a malecon or boardwalk between the property and the beach, but it does not have much traffic (if any) other than the occasional pedestrian.

Also, for most of the year it would be quiet but for Ecuadorian holidays it may get noisy towards the north end of the boardwalk when restaurants place boom boxes outside their storefront to attract Ecuadorian customers (I know us gringos aren’t!)

But overall, I see real short-term potential for growth for Sua as the spill-over from beautiful Atacames has to go somewhere (and it can’t go north, so it must come south).

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The 2nd best beach in Ecuador to find cheap beachfront property

This is part 2 of 3 in this series on where’s the best, undiscovered places to still find your own small piece of the beach in Ecuador… cheap, small front-line beachfront lots for personal use preferibly under $15k.  
Today’s pick is probably not on your Ecuador beach property house-hunting itinerary.
But it is one of the sunniest beaches in Ecuador (by far).

Has very little humidity nor insects (comparatively).

Is within an hour and a half of an international airport and first-world style hospitals.

Has great, empty waves for surfers.

At night, you can see stars, lots of them, and like in many small towns, hear a pin drop. (Ok, almost.)

And is only minutes from an already well-known Ecuador beach town and a new, large SuperMaxi mega-shopping center.

And did I mention the forgotten beachfront lots that are cheap… very cheap.

Welcome to todays pick… Engabao.  

In Engabao you’ll feel like you’re on the edge of the world.  Not many people here.  There are a few hostels though that cater to the surfers that seasonally migrate to these shores.

Only 15 minutes northwest up the coast from Playas, you’ll feel a lot farther away.

Heading north away from ‘town’ a few folks have already ‘seen the signs’ and have bought in and erected vacation homes.  But vacant, often abandoned beachfront lots can be had, and had cheap, recently, I’ve seen smallish 250m2-1000m2 beachfront lots for sale in this area anywhere from $15-30 USD per square meter while beachfront land in other areas of the coast often command $60-150 per m2.

Surf is the key for a town to have explosive growth potential.  Discos, hotels, restaurants and other amendities can be added later.  But a town either has surf or it doesn’t.

Don’t look far for an example of a town on the Ecuador coast that started with not much more than a decent surf, that exploded in a matter of 2-3 years since about mid-2009 as it got discovered by both the local and international travel community (Montanita).

And while Montanita is 3 hours from the nearest major city and international airport (Guayaquil) this town is only about 1 1/2 hours to 2 hours away.

Now, I don’t expect this place to explode, not overnight anyway, it’s too raw just like the last pick, Chanduy.

And frankly, its not for the mainstream expat looking for the standard services (just yet) and put down roots.

But it is an interesting investment option.

Now, Engabao does have its disadvantages… like (lack of) population, (lack of) basic food options, spotty basic services (water, electricity, internet), the dry, desert-like moon-scape, and the access road from Playas is 20 minutes of pot holes.

But that’s why its cheap.  And as of now, there is inventory for sale, and potential indeed is here.

After all, what else would you expect from a cheap, low priced, undiscovered beachfront option!

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Chasing the ‘holy-grail’ of Ecuador: Cheap beachfront property, part 1 of 3

 

 

What if you only had 5 days to look for cheap beachfront property in Ecuador?
And you were only interested in something front line, I mean right on the ocean.
You want to walk out the front of your house and be able to wiggle your toes in the sand.
You know, something that would cost millions in California, New Jersey or even Costa Rica.
A block back… no good… not interested… and you got a LOW budget, you want something small just for you, I’m talking $20k or less.
You can’t dick around.
You’d be wasting your valuable time going somewhere like Olon, Montanita or Canoa where prices have already jumped in recent years and there is little to no front-line beachfront availability.
I’d start in these 3 places that stand out in my mind as the ‘top three opportunity’ areas right now in July of 2013.
3 undiscovered places on the coast where you can still find that holy grail, or in other words really cheap, yet desirable, undiscovered beachfront property.
You can always buy one or two blocks back…  But let’s face it, front-line beachfront property is a limited commodity.

And the first town in this series, the one I reveal to you today is where i found the one I bought the 500m2 front-line beachfront lot a few months ago for $4300.
Of course, these are not the only places in Ecuador with cheap beachfront.
And big lots with cheap ‘per meter’ values can be had all up and down the coast particularly between the towns, but you are still looking at a several hundred thousand dollar investment with those larger lots.  So that’s not what im talking about with these three picks.
These 3 picks are a good place to start for someone looking to spend a few thousand bucks to have their own piece of the beach, a slab maybe big enough for a house with a small yard.  Maybe 500m2 or so.
They’re completely undiscovered, and this is probably the first time you’ve even heard them mentioned… anywhere!
Over the last 2 years I’ve witnessed places like Montanita, Playas, Canoa, Ayampe and Ballenita jump in beachfront prices.  Could these 3 be next?
Here is my first pick to find CHEAP beachfront property (over the next week you’ll get the next two picks in this series):  
Chanduy.

“Where?”  You might say.
Maybe I have you scrambling for a map.
Don’t worry, if this town wasn’t put on your house-hunting itinerary you’re not the only one!
This town is south of Salinas and north of Playas, almost right inbetween.
What?

You didn’t know there was a town between those two?  Well, there is, its just not well known and certainly not touristy.

To date almost zero foreigners have bought here.  Ok one if you count me.  This is where I found that 500m2, $4300 beachfront lot (that has proper title).
Chanduy is a fishing village, with a large fishery on the far end of town.
There’s one little hostal in town only open on (some) weekends.
Its about 45 minutes from the boardwalk of Salinas, or 30 minutes from the big malls and shopping of Santa Elena.
It’s a dusty,dry, rather vacant town on one of the sunniest stretches of beach in Ecuador.  Raw… yes!
The beach is golden, long but not wide, and there is surf, but its better for body surfers than for surfers.
So how has this town remained a completly undiscovered secret being so relatively close to the Salinas area?
Because its out of the way.
It’s not anywhere near the main coastal road like so many towns on the coast of Ecuador.
Its VERY easy to drive past the sign.
You actually have to turn off the highway that connects Guayaquil to Salinas and drive down a shoddy (yet paved) road with some pretty big potholes about 15-20 minutes just to get to the town and the beach.
The going price for most lots seem to be around $10-20 per m2 and that can even be for a beachfront smallish lot for a single family residence.
Does this place have potential?
Well the location is great, less than a half hour from amendities and shopping malls (in Santa Elena near Salinas).

And less than two hours from an international airport in Guayaquil (GYE).

Its also one of the sunniest, least humid beaches in all of Ecuador.
The locals are friendly but not very used to the sight of foreigners.
And its not a big place so with just a couple dozen foreigners buying in the price could really move.  But it won’t happen overnight.  I see this as a good 1-3 year investment.
For pics just Google “Chanduy”.  There’s some decent ones on there.
Can’t say I dont put my money where my mouth is!

 

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Guayaquil: the top short-term rental opp in Ecuador?

guayaquil real estate

Las Penas near the boardwalk in Guayaquil.

Most expats and travelers in Ecuador just skip it.

It’s hot, it’s humid and the mosquitos plentiful.

Ecuadorians will tell you not to go there cause it’s dangerous.

Welcome to Guayaquil.  Ecuador’s largest city and top international port.

But after a year of living there I can honestly say it is also a great investment for short-term, furnished, up-scale rental properties.

There simply is more demand than supply.  And it’s year round!

Guayaquil along with the heat and humidity also happens to be the main crossroads of Ecuador.  Wherever you’re going, chances are you’ll need to pass by Guayaquil.

Locals in the city haven’t quite grasped the idea, and almost all the properties for rent ask for long-term leases (1 or 2 years) and come unfurnished.

But…

…it’s an easy sell to many executives and travelers alike as to why stay in a hotel room for weeks or months when you can enjoy the privacy of your own apartment and kitchen.

There’s money in Guayaquil.

And you’ll soon discover you’ll have just as much interest from local, Ecuadorian executives as you will from foreign travelers just passing through maybe on their way to the Galapagos… or maybe on their way from Salinas/Montanita to Cuenca (they have to pass through Guayaquil).

You could rent by the night, week or month to month.

So where in Guayaquil is best for this type of rental?

Well, I’d avoid the city center like the plague although the river boardwalk (malecon) while nice to visit in the daytime it’s dodgy at night.  I’d avoid the south of the city too cause it’s just plain ghetto.  Samborondon is nice, and where the local rich live but it’s far away from everything and your renters will need a car to rent there from you.

Urdesa is a pleasant neighborhood with lots of restaurants that is nice to live with tree-lined streets but being in a narrow valley the traffic during rush hour can get untolerably bottlenecked, not for me.

I’d stick to the north central part of town between the city center and the airport.  Particularly, I like the Kennedy Norte area and even more specifically the Plaza del Sol area.

The Plaza del Sol area is the new city financial center, right next to the Mall Del Sol and where both travelers and the locals (with money) want to be.

You’re in the middle of everything.  A few minutes from the airport, a few minutes to Urdesa or Samborondon or even the old city center.

There is a Sheraton and Howard Johnson in the area too.  The Hilton is nearby.

There are a few condo towers I like specifically with pools, parking, elevator and 24 hour receptionist.  Two are the twin towers adjoined to the Howard Johnson, and another is the Elite Tower across the street.  In any of these towers you can find a luxury one bedroom suite starting around $85k resale.  The two bedroom start about $10-20k more.  The suites rent for $1100-1200 a month, or around $80 a night.  But there are VERY few for rent as short-term furnished rentals!

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Ecuador a safe haven for enemies of the USA?

I recently got this email from a subscriber…

“I enjoy your emails about Ecuador but have become concerned that it  is becoming known as the safe haven of enemies of the United States.  First it was Julian Assange from Wikileaks, and now it is Edward Snowden.”

My response: 

Well, yes, it is becoming a safe-haven, isn’t it obvious!

This is what happens when a leader plays to his own ego instead of doing what’s truly best for the country.

Maybe, being an oil-producing country with plentiful fresh water sources and extremely fertile farmland, Ecuador really doesn’t need the US, but someday it might.

What I do know is there’s quite a few folks in Ecuador whose clients are primarily North Americans (paticularily in the tourism and exporting industries), and if Ecuador starts to garner a bad rap, than yes, these businesses will be hurt.

Now I hate politics as much as anybody and don’t want to get into it but I look at it like this…

Any little guy like myself with leanings toward dorkiness… yet survived middle school in the USA knows it doesn’t pay to tick off a bully.  There’s nothing to be gained from it, you’re best to lay low, mind your own business and let the authorities sort out the injustices.

If I were Ecuador my response would have been to simply not get involved in the “Assange, Snowden” cases.

But does this effect Ecuador as a quality, safe, inexpensive place to live with a mild climate somewhat near the US that accepts foreigners wholeheartedly?

No, not really.

Most Ecuadorians have family in the US, and feel a special bond with Americans so i don’t think rascism towards North Americans will ever be an issue and it will remain a nice place to live despite these very-political occurances.

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Abusive landlords in Ecuador: Ecuador Rental Law

“Come on man, help me grab her washing machine.” My Ecuadorian friend (and roomate at the time) yelled.

“Naw man, even if she did screw me, and I don’t mean that in the positive sense, I’m not about stealing people’s shit.” I responded.

“Thats how we do it in Ecuador.” He responded.

You see, recently a good local friend of mine and myself were renting an apartment in Quito, and the landlord upon finding out we were going to unoccupy the apartment refused to give us back our security deposit.

So my Ecuadorian friend planned on cleaning her out by taking her microwave, washing machine and random other things… but I eventually talked him out of it.

But as a renter in Ecuador, excuse me, as a FOREIGN renter in Ecuador, its important you know your rights cause a lot of people will try to take advantage of you.

It is what it is.

So what exactly are your rights as a renter in Ecuador? 

Well, this week I was interviewing a friend in the Rental Court of Ecuador (Juzgado de inquilinato) in Quito asking just that.

Me: Security deposits, how much should they be, what is legal?

Response: There is no legal limit as of yet but most folks with nicer properties charge two months worth of rent as the security deposit.

My take: Use your status as a foreigner (us foreigners have a good rep of being good renters so use that as you negotiate) and often you can get the landlord down to accepting one month worth of rent.  Some don’t ask any deposit.

If a property owner doesn’t mention a security deposit, DON’T mention it yourself!  If there is no way around a hefty security deposit but you really want the place, most landlords will accept, and I suggest, that you pay half the security deposit up front and the other half after a month or two, this gives you time to evaluate the property.

Me: If I leave my contract early, does a landlord have the right to keep my security deposit?  

Response:  No, absoutely not, not in Ecuador.

Me: If I leave my contract before it expires, and unoccupy the property, can the landlord come after me for the unused time on the contract?

Response:  No, not in Ecuador, generally, if you notify you’re leaving, unoccupy and stop paying, its over.

Me: What can I do if a landlord doesn’t want to return my security deposit?  

Response: Most Ecuadorians just occupy the property for the amount of time the security deposit would buy them, and leave it at that.  You could also sue them through this office (Juzgado de Inquilinato) and you could get a judge verdict within 3-6 months.

Me:  Switching sides a bit, if you as the owner of a real property in ecuador are renting to someone who stops paying their rent, how quickly can you legally evict them and what is the process?  

Response:  Well, its more complicated than in the US where I’ve heard in many states by the 10th day of non-payment you can get the police to come and get  the tenants stuff placed on the front lawn.

Here after two complete months of non-payment you can file a complaint through this office and within another 1-3 months get a verdict to have them legally booted from your property.  In Ecuador, you can not get someone booted from your property just by going to the police, you need a court order.  If the case goes to the court the judge will order the tenant to pay you for all the time they spent in your property without paying.

Me:  Most foreign investors, like myself, are weary of places (like Costa Rica) where squatters or in this case folks that rent your property for a really long time can eventually gain some sort of legal right of ownership of your property?  True in Ecuador or not?  

Response:  No, not in Ecuador, there is not this risk when renting property in Ecuador.  You may run into this a bit when dealing with seemingly deserted, unoccupied land several people claim title too, but not when renting residences or commercial property in Ecuador.

Me: How can you legally register a rental contract in Ecuador?

Response:  By getting a few copies of the signed contract and copies of both parties’ legal ID and bringing it to your nearest JUZGADO DE INQUILINATO, once here we can give you more specific details or requirements you need to register the contract.

That’s it, now hopefully you won’t find yourself trying to lift someone elses washing machine!

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6 month Conclusions: The Ecuador tiki hut building project

 

OK, so it’s been a bit over 6 months since I finished my Tiki Hut building project on the coast of Ecuador near Montanita.

It’s hard to declare something a success when you finish building it.

You gotta wait and see how it actually rents.  And now, the numbers are in.

3 tiki huts built with oceanviews near Montanita in a little over 6 weeks.  Plus a remodeled ‘budget’ 4 bedroom house with oceanview.

4 VERY different styles.

Well, here are the final conclusions and what I learned renting each and what Id do different next time…

Tiki Hut 1, I bought this All-wooden hut pre-built from a builder I know from the Ecuadorian Amazon, Tena region.  It took 3 days for them to install it on my location elevated a few feet above the ground.  It has a wooden balcony, wooden floor, wooden walls, a “sing”roof, a beautiful oceanview, one bedroom, one bathroom, a sink, kitchenette, mini-refrigerator, WIFI, one queen bed, closet, one full bathroom with a hot electric-powered shower with a tile floor and vinyl-covered walls.

I had to tile the floor myself first laying a small web or rebar, then laying a 5 cm layer of cement, then laying the tile… and then I had to stick vinyl on the bathroom walls with rubber cement as well as install the water and electricity outlets and hook up.   For rent (based on market prices) at $25/ night, $100/week or $250/month, the price is the same for one or two people.

montanita home rentals

wood3

Total build time = 7 days.
Total size = 24 m2 or 258 ft2
Total cost = $3753

Final Conclusions: Should not have included the bathroom within the wooden structure.  Better to build bathroom out back end with cement block and tiling, hut can get very humid and damp after showers.  Size was a bit too small for comfortable living with couples.  At 6m x 4m another meter of width would have helped out a lot.  Would have used different material for roofing cause when it rains it makes a lot of noise and in the sun the metal sing can really heat up.  Amazonian wood holding up good to coastal climate, still cant beat the view from the balcony.  Occupation rate over last 6 months as vacation rental 70%.  A success.

Tiki Hut 2, The budget option with little ocean-view built with a cement floor and cement block with the “Sing” metal sheet roofing so common in this area of Ecuador.  It has WIFI and a mini-stove and bathroom (all in the same room) while the shower is behind a curtain out back.  I hope to rent it to a surfer or backpacker for around $100 a month or $5 a day for shorter time periods.  It’s good enough for me and someone not very picky, I could live there if I needed to live somewhere rent-free.  It is very soviet-esque but comes furnished with bed, table, chair, Wifi internet, electric cooker, sink, and a half bath with the shower around back which does have a curtain.  Currently its listed for rent at $100 a month.


SAMSUNG

Total build time = 6 days. (One Ecuador workweek).
Total size = 16 m2 or 172 ft2
TOTAL COST $892.49

Final conclusions:  This Tiki hut was a bust and by far the hardest to rent.   Occupation rate over last 6 months as vacation rental mainly to younger backpackers, surfers is 12%.  Proves saying if you don’t have the money to do something nice, save your money first.  For most, feels too much like a prision cell with all the cement and lack of windows.  I would not have done this Tiki Hut again if I had a do-over.  At least I have a place I can live rent free if need be.

 

 
Tiki Hut 3, By far the most labor intensive and time consuming, I designed the hut myself based off similar “mixed” models in the area.  Due to inexperience building these types of huts (it was my first time) I made mistakes all along the way that caused me to go about $2k over budget (see the end of this email for details).

By “mixed construction” I mean a building that uses a mix of both eco-materials like bamboo and normal construction materials like cement and brick.  My idea was to build an elevated structure a few feet off the ground with a cement, tiled floor and walls made partially of brick and bamboo.

The roof would have bamboo cross beams and a typical-for-the-area grass roof with a hidden layer of heavy-duty plastic and mosquito netting to keep the bugs out.  The hut would have a balcony, one bedroom, one full bathroom with electric-powered hot shower and a kitchenette area complete with a countertop, sink, mini-refrigerator, one queen bed, closet, WIFI and a dining table for two.  For rent (based on market prices) at $30/ night, $100/week or $250/month, the price is the same for one or two people.


SAMSUNG

brick1

brick2

Total build time = 5 weeks
Total size = 30 m2 or 322 ft2
Total cost = $6557.36
Final conclusions: By far the biggest success of the three.  The size is much more comfortable for a couple as a longer term residence at 6m x 5m, a full meter wider than the wooden bungalow.  Very easy to rent, most folks extend their stay, great for single person longer term or for a couple on a shorter stay.  Average rent 1-2 months as folks explore nearby areas.  Would have built on ground to lower cost of construction by about $1k, would have built balcony larger to convert it almost into a deck for barbecuing, etc.  Occupation rate over last 6 months as vacation rental 84%.

Overall conclusions after renting the huts for 6 months:  If I had to do this project again, I would have built two of the brick/bamboo huts instead of the wooden and cement ones.  I would have hired an architect to manage the building project for me (was very time consuming for me).  And I would have explored 2 bedroom designs cause my far-less-attractive-budget 4-bedroom-oceanview very-Ecuadorian house I found for $15k still rents even better than the huts (at $450-480/mon) because people like the space.

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How I lost $49k overnight in Ecuador

Picture this…

You sell your business. And after paying off your debts put the profit in the bank. A cool $49k.

Then you see on the news your bank, one day working as usual, and the next, closed!

And your moneys gone.

No, its not the 1930s, thats exactly what happened to me this week here in Ecuador.

I had my money in a month-to-month CD making 9% APR in COOPERA LTDA, the “credit union” that closed its doors this week.

What happened was the board of directors was accused of money laundering through several accounts by the government which caused a run on the bank. Then two days later the order came from the government to close shop altogether.

All in a matter of 3 days within this past week.

Didn´t matter the cooperative was one of the largest in Ecuador, had been around almost a decade and had 106,000 accounts opened.

Was this a government take-over or a highly sofisticated, well-planned bank ´buy-in´ where an insolvent bank orchestrates their own sudden demise effectively bailing themselves out? Who knows.

All I know is Im out almost $50k, and it sucks.

But now you know what it cost me about $50k to learn, that you shouldn´t have your money in Ecuador banks or cooperatives, at least any significant amounts.

Don´t do it!

There is a reason Ecuadorians don´t trust their own banks and prefer to store their wealth in real estate.

In foreign countries they´re not dumber or less-developed than you, really, everything is the way it is for a reason. You just gotta stick around long enough to learn it.

So one visa type you should throw out is the investor visa based on a CD worth over $25k… screw that! Best to go the route of real estate.

I´ve always believed it wasn´t how much you had in the bank, but your income stream that can make or break you.

This belief will now be tested considering I just lost all my “liquid” savings and am now starting from zero.

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Posted in Ecuador for Investors, Expat Lifestyle, Investor News/Analysis

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