Best Place to Live in Ecuador

1 More Big Negative to Life in Ecuador

Last week’s Insider’s Newsletter on the 7 Negatives to Life in Ecuador spurred a lot of debate… this week I’ll share some of the most insightful reader comments and share one more big negative I didn’t touch on last week…

Last week’s article on “7 Negatives to Life in Ecuador” created quite a stir, so I decided to mention one more big negative this week and share a few of the insightful reader responses sent to me…

8. Walled Housing. You could live years in Ecuador without incident, but there are things that should be accounted for. The first thing you will probably notice not just in Ecuador, but most everywhere in Latin America, is how everyone walls in their property and bars up their windows (at least on the bottom level of buildings). Sure this kills some of the “grandor” of the property, but it’s a necessary evil you must do in Latin America (or any “poor” country) to prevent possible break ins.

A few reader responses from last week (names withheld) :

What’s wrong with a “left leaning” President? The United States has an extremist right wing House of Representatives which recently attempted to repeal medicare and all of are extremely concerned about their radical ideas. B.A.Many people’s giving their first choice to Accendo Medicare Supplement for medicare plans.

There are many good advantage of medicare services. Medicare Advantage plans 2021 are getting too much attention because of good structure.

“You purchase a camera once in a blue moon……..a car once every 5 years or so. Food, fuel, staples, travel, medical we use every day…so we cannot expect to have it both ways. Canada and the U.S. have a huge basket of taxes that make everything expensive nowadays, so this luxury goods taxing in Ecuador is not necessarily a negative that one should even bother with.

There are ex-pat communities in Bahia, Salinas, Cuenca and Manta, as well as Cotocachi and Quito Lack of things to do is only an issue if you have no imagination at all. Ecuador has so many natural riches and differtent places to visit, that I cannot imagine anyone getting bored.

Ecuador, even though some may feel that the president is left-leaning does have one great advantage on most places like the U.S. and certainly Canada. It believes that keeping oil prices low will help its economy, and thus subsidizes gas prices. Therefor, inflation is also not rampant.

Ecuador is doing far better than the U.S. when it comes to debt and future out look in the eyes of many. Ecuador is clearly open for business, more so than the U.S. right now, as regulations and taxes are not yet smothering everyone there.” D.

“Finally, some correct information instead of the “you can live comfortably here on $600 a month” and everything is dirt cheap. Yes, I suppose you can if you want to grow your own food and live like a native, but I dont beleive many “expats” would be willing.

When we moved down a couple of weeks ago, we bought 2 new cars, many household items etc and found the prices to be comparable to the US.
I bought a whirlpool washer and dryer, large refrigerator, two 12000 BTU portable AC units and a sewing machine and spent under $3000 and that included delivery right to my door, and I received some freebies to, like a microwave, blender, floor fan, drinking glasses and a portable picnic table and chairs!

My smart phones with a plan are pretty much comparable to the US in price, but the minutes are less. We happened to get in on a promotion where we get double minutes every other month for 6 months on our 18 month plan. The plan is $66 a month each for unlimited internet and 400 minutes a month each.We are having high speed internet installed this week along with wireless for the house and its going to cost us $40 a month (we opted for much higher speed but its available for as little as $25)…not bad. Direct TV I understand is about $50 a month but dont have accurate figures yet.

Some of the consumables are higher, but I went to the market in Bahia and was able to buy freshly cut T-bone steaks for $2. each, but ground beef was $2 a pound…go figure…;-), fresh shark steaks at $1.75 a pound, wahoo and dorado at $2.25 a pound and all the other myriad of seafood. I have a local fisherman that comes by once a week right to my door and delivers fish, shrimp and lobster…from $3.50 a pound.” Larry P.

“Price of air tickets from the US. Yes they are expensive but on the flip side once you are a resident and over 65 the airfare back to the states (to take the obligatory trip back to visit relatives, etc) is 50% off.

Cars. (In Ecuador) The total city and intercity transportation system is like what it should be when you have an economy that is not solely based on cars.” B.K.

“We liked Cotacachi and met some great people but the lack of things to do was a deterrent. Then there was the weather. There is a lot of false information on the internet as to the eternal spring climate, unless “spring” refers to continuous overcast and eternal refers to the rain.” R.G.

Evicting a Problem Tenant in Ecuador

If someone is delinquent for three straight months in Ecuador you can go to a lawyer with the receipts of the payments you’ve received from the tenant and the rental contract and file a legal order of eviction “una demanda legal”.

From there the local authorities take care of the rest but you may have to stay on top of them so they move with a little “umph” in their step.

If you liked this you’d love my weekly Ecuador Insider’s newsletter where I reveal everything a savvy investor must know before they invest in Ecuador, sign up below (you can unsubscribe at any time):

Income Taxes in Ecuador, How Much?

The income tax system in Ecuador is pretty straightforward, unlike in the USA where Trump is starting to forego releasing his taxes and making it burden on many.

Every March everyone involved in commercial activity pays income tax “impuesto a la renta” based on the previous calendar year.

If you have a tax ID number “RUC” you will be liable for paying taxes, whether you be a sole proprietor or representing a corporation.

In Ecuador, as in the US, they use a sliding scale taxing a percentage of your earnings based on how much you earn.

In 2010, if you earned…

up to $8910…you pay $0 tax
$8910-11350…you pay 5% tax
$11350-14190…you pay $122+ 10% tax
$14190-17030… you pay $406+ 12% tax
$17030-34060… you pay $747+ 15% tax
$34060-51080… you pay $3301+ 20% tax
$51080-68110… you pay $6705+ 25% tax
$68110-90810… you pay $10963+ 30% tax
$90810-and up… you pay $17773+ 35% tax

You can legally deduct housing costs, health costs, clothing costs, food costs, and education costs with the proper, original receipts “facturas”.

If you are an employee, your only tax liability is the table stated above. If you own a business, in addition to the above income tax based off of earnings or profits “impuesto a la renta” you will have to pay an additional sales tax “IVA”, which is 12% of the total gross sales of your business.

Now, for all your business expenses in which you incurred paying sales tax yourself, you can write off that sales tax paid against the sales tax you owe, and pay the difference.

In Ecuador, if your gross sales are over $60000 in 1 year, you are required by law to keep detailed records of your accounting and affiliate yourself with the public organization called the IESS.

The Crisis Effect on Ecuador Real Estate

Foreclosures, defaults, fire sales…

We all know the story of the housing market north of the border, but has the crisis had the same affect on real estate in Latin America?

An important question, indeed, for anyone staring out their frosty window with a sore throat dreaming of their big leap south.

After investigating the housing market in several Latin countries, the best answer I can give you is “it depends.”

I know what you’re thinking. “It depends.” What a nice, safe cop out.

But it’s true. Let me explain. It is a little more complicated down here.

First and foremost, the Latin market has not had across the board drops in prices as seen in the US and Europe.

In Latin America, it has depended on the country, your location within the country, and the type of property you own.

For example, for a rather undiscovered, under-priced country like Ecuador, the crisis has actually increased demand in some areas by as much as 20-30%.

According to one owner of a prominent real estate website in Ecuador wishing not to be revealed, said that traffic arriving from Google nearly doubled as the crisis intensified in the last quarter of 2008 and the first quarter of 2009.

His theory is that with the crisis up North, more and more people have begun to look for cheaper places to reside, and with new technologies like the internet and Skype, many people can continue to work from remote locations.

Whereas in the Dominican Republic, a country that has already experienced a recent market boom, the consensus from local agents seems to be that prices have taken a noticeable drop in the touristy, foreigner-dependent areas like Punta Cana, but in less touristy places like Santo Domingo, the prices have remained relatively stagnant through the crisis.

Although, even in the touristy places, prices have not fallen as much as they have in the US.

Which brings me to my next point: your actual location is also important. One of the main factors people look for when moving to Latin America is security.

This may be the reason why prices for properties in gated communities and posh condo buildings have not felt the effects of the low market as much compared to similar properties located outside guarded areas.

Another important observation is that in both countries, Ecuador and the Dominican Republic, prices of beachfront property have not gone down. For beachfront, they rarely do.

One possible reason for the softer impact of the crisis on the housing market of Latin America is that, let’s face it, the traditional investors in Latin America have been the world’s rich, and the rich have not been nearly as affected by the world economic crisis as the middle class.

Another important observation is that credit has always been expensive in Latin America, so people, foreign and local, normally buy in cash, minimizing the affect of the credit crunch as well.

With that understood, with a little due diligence, there is no better time than now to start taking a gander south of the border.

If you liked this you’d love my my weekly Ecuador Insider’s newsletter where I reveal everything a savvy investor must know before they invest in Ecuador, sign up below (you can unsubscribe at any time):

Part 2 of 2: Moving to Ecuador on a Budget

This article is continued from part 1…

Then, to get around, I recommend not buying a car, that way you don’t have to spend on parking, repairs, gas and insurance. Instead, learn to use the local bus system and the trolley, both of which charge a modest $.25 per ride.

For communicating, buy a cheap used phone on the street for $20, a sim card, and just go on the prepaid system. Buy cards to put credit on your phone and learn to communicate with people like the locals do in countries where cell phone calls are expensive, via text messages.

For internet, you could find free WIFI hot spots to get online with your laptop. Most luxury hotels offer a free signal in their lobby or up-scale restaurants and cafes often do too.

For calls home back to the States, learn to use Skype, teach your mother or father how to use it before leaving, then set times to be connected via email (remember to take a microphone from the States to plug into your laptop).

Following these tips you could live in Ecuador for under $1000 a month, even in 2011!

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