This week the NY Times released an interesting article on colonial restoration in Cuenca.
The idea is basically taking an old Spanish colonial building, reworking the interior and selling it off in pieces as individual apartments.
And it’s a great opportunity in Ecuador.
For instance, the article stated the buyer paid $148k for an apartment in the colonial house… and I personally know you can find entire old colonial houses in the old town of Cuenca right now in June of 2012 starting around $120k. So if you buy the colonial, and splice it out into 4 or even 6 separate apartments and resell each one, it could be quite profitable.
But before you dive into this head over feet, there’s a few things you should know, risks to keep in mind… things I’ve learned on the ground and heard from several folks in this business, including the developer mentioned in the NY Times article, Juan, who I’ve known for several years now.
1. The Municipal is key! The Municipal in Cuenca will ultimately approve or nix your project from the get go, and you have to respect their decision, because ultimately they’re the ones who will, or will not, issue the separate titles to the units located in your colonial. Have patience, dealing with Municipals in Ecuador can be a very time consuming and frustrating process (plan on months, several months to hear back from them once your plans are submitted). Contacts help. Ideally its best to check on the feasibility of your idea with them before you buy the house in the first place.
2. Mind the structure. Even if you get approved for your project the city is very strict about protecting the overall aestetics of the old town and even if the house is about to fall down you wont be able to change much with regards to the exterior, so know and check that before you buy!
3. Clear title? Even if you’re an experienced Ecuador property trader you’ll still want to hire a lawyer to check on the title and domain history of the property because titles for homes in the old town can go back literally centuries so it’s best to be sure the title is free and clear before you buy a place. Titles particularly get mucky after deaths or divorces.
4. Keep your market in mind. Your main market will be foreigners, no doubt. Ecuadorians don’t really “aspire” for places in the old town, they don’t value the historical beauty like we, foreigners, do. So keep your market’s tastes in mind. Offer balconies, green areas (for pets), good lighting, nice views (if possible), and American style kitchens. People rent old, they buy new. That’s why a modern look in an old colonial shell is a real winner.
5. Consider the fringes. For most foreigners and tourists, the old town in Cuenca is the place to be… for a few days… but to live most prefer living just outside of it in nearby areas. The old town does have a lot of noise, honking, traffic, uneven sidewalks and smog. For this, the outskirts of the old town just may be the place to be if selling residences.
6. Cuenca’s “in” now, but will it soon be “out”? The highlands of Ecuador actually boasts several marvelous old colonial towns, a few of my favorites are in Quito, Loja and Ibarra. But there’s more, I’ll mention them on newsletters to come. Cuenca is the top draw now, but that could change overnight, in the other places you may be able to find a better buy. Worth a look!
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