The Ecuador Insider

“I just didn’t find any VALUE.” My new friend said referring to his 2 week property search on the southern coast of Ecuador.

“The properties that cost $40-60k needed a lot of work or simply weren’t in a desireable location off the ocean. The other properties I found that were nice were more expensive, maybe starting around $90k… out of my budget.” He continued.

“Well, how’d you look?” I asked.

“I did an exhaustive search with most of the real estate agents in the area of my interest, having them take me to see their listings and even having one drive me around looking for ‘for sale’ signs. If we found something I would have had to pay him 3-5% commission on the find depending on the property price.” He said.

“Well, it doesn’t surprise me. You looked for property in Ecuador the WRONG way.” I said.

I continued, “You see, maybe that’s how you look for property in the US, but it’s A LOT different down here. The real estate agents here tend to focus on the higher-end of the market, logically, commission is a much nicer payout on a $200,000 property than a $30,000 one. And if the agents did find any real steals, they’d probably buy it themselves, fix it up a bit and then turn around and re-sell. I mean, wouldn’t we all? Who can blame them, business is business, it is what it is.”

I added, “Besides, Ecuador doesn’t really have a real estate agent culture yet, most prefer to sell by owner to avoid paying commissions. Agents should only be used TO AID your search, and as a good source of information.” It is truly a unique situation there, there are no ads that read: Property Valuers Brisbane – Call For the Best Valuations Service on the road like there are back home for many of you. Something we take for granted in the most modern cities  of the world.

Should agents be used?

Absolutely. But they shouldn’t be the end all say all in Ecuador.

So how should you look?

First off, try making a local friend to help your search.

You know, someone that would help you for free, or maybe someone you could pay hourly or daily. Most in Ecuador would jump at the opportunity if you offered $100 for their whole day, much cheaper than paying someone commission. Heck, I could recommend a few that would be interested at that offer.

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“So, where’s your favorite place – to live – in Ecuador?” My new friend asked.

“Good question, Ecuador has such variety in such a small place, and I really like so many places… but if I had to choose based on purely where I enjoy living the most, I’d choose Quito.”

Why?

Well, it’s by far the most “cosmopoliton” place in Ecuador. Also, the city has a truly unique backdrop of towering, Andes mountains on all sides, and Bohemia and Old Town districts that could keep you busy exploring for weeks.

The locals are hip, cultured and educated, treat foreigners warmly and know how to have a good time. Some of my best friends are in Quito, so maybe that has a lot to do with it. People ALWAYS make the place.

Heck, I remember my first day in Ecuador my Ecuadorian friend, who I had met while living in Spain the year before, picked me up from the airport and immediately wisked me away to a spot in La Vicentina where about 10 of his friends were watching a soccer match on TV. Ecuador won. A street party ensued, and man, I was already hooked on Ecuador!

So what would I do with $50k in Quito, right now in 2012?

Well, its a lot different than what I would have done 2 years ago.

2 years ago, I would have bought a 1 bedroom suite in the Carolina Park area for around $30k like my friend did. Over the last 2 years prices have gone up quite a bit in this central part of Quito, near where everyone wants to be.

Now a days, it’s hard to find a nice suite near Carolina for under $50k, but if you’re patient you can probably find something in the $40s or if you’re willing to go out a bit to the north or south of the city, you can still find livable 1 and 2 bedroom apartments starting around $30k.

Right now, in 2012, with $50k in hand, I’d still probably consider The Carolina Park area, around the posh Republica del Salvador Avenue, but I’d buy an office space.

Why?

For one, suites along or near this avenue in the posh Quicentro area are now starting around $60k, so $50k might not cut it. But also, because I can rent the office in this area quick, the demand is high, and I could get about double the rent per square meter than I could renting an unfurnished apartment in the area.

For instance, a 50m2 office in this area, where everyone wants to be, rents around $500-700 per month. I don’t have to furnish the place, the business that rents from me will take care of that.

And I can still find nice, almost new 50m2 offices in the area for around or slightly under $50k.

Now, if I had more skrill to work with, say, $200-250k my strategy would change completely and I would most surely take advantage of one of the many opportunities that are arising with the opening of the new international airport in the north of Quito.

Warehouses. Storage spaces for importers and exporters who do routine business through the airport. It can be big money, if done right, I know of a 500m2 one that rents for $3000 a month.

To learn more about investing in warehouses and other property in Quito for the highest short and long-term gains, critical success factors, and where and where not to invest in Quito right now, sign up for my Weekly Ecuador Insider´s Newsletter, where you’ll learn everything YOU NEED TO KNOW before you invest in Ecuador, you can unsubscribe at any time:

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As projected by the Ecuador Central Bank, or Banco Central and Ministerio de Finanzas the average per capita income in Ecuador for 2012 will be $4,905 USD per adult working age person.

This averages out to slightly over $400 per month per person.

Yes, you can live in Ecuador on that, but very sparingly, depending of course on your desired lifestyle.

If you liked this, you’d absolutely love my Weekly Ecuador Insider´s Newsletter, where you’ll learn everything YOU NEED TO KNOW before you invest in Ecuador, you can unsubscribe at any time:

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