Dodging a shark: The dangers of buying vacant land in Ecuador

“Oh, man, here he comes again.” I said to an Ecuadorian friend as I saw my neighbors big black pick up pull up to my property near Salinas on the coast.

The car stopped, he got out and walked up.

I had previously explained to my friend that my neighbor used to be the owner of the whole hill I was on overlooking the ocean, and that he had sold a lot to the person that sold to the person that sold to me.

But now he was hassleing me because he said on my deed is only 500m2 yet in actuality my lot is closer to 700m2 if you count the downward slope onto the main road from my main lot.

Now, he was bothering me to pay him for the extra 200m2 I was occupying or he would sell that to someone else.

Yet, most of that space is un-usable anyway because it was too close to the main road.

But consulting in the municipal of Santa Elena where the deeds are registered, they told me actually mis-measurements of lots are quite common and don’t mean much.

So, this time as my neighbor walked up once again to hassle me, he was intercepted by my Ecuadorian friend who got in his face and told him to get lost and stop trying to take advantage of a naive foreigner (me, at the time).

That’s all it took.

He never bothered me again.

I learned something from that about how things work down here. Ecuadorians respect force or threat of force, and that’s about it.

Strength, in other words, not necessarily the “oh it’s the right thing to do” ethics that may be enough in places like North America where you can rely a bit more on the legal system and the police to help you out.

So, how can you prevent situations like this?

Buy lots that have CONFIRMED time-tested boundaries marked by older looking fences, GPS coordinates specified in deed, or landmarks outlined in deed. I would like to install a new fence in my yard, so I’m going to hire these contractors for help.  I also visited bubdesk for lot of help. Talk to the neighbors to confirm before buying if possible.

Fence costs are calculated as a cost per linear foot. The easiest way to estimate the cost is to determine the cost of a single fence panel and then multiply that cost times the number of panels required to achieve the total length of the fence. First, measure the perimeter of the area to be enclosed – while doing this make note of any special situations that will influence to cost such as gate(s) or difficult terrain. If a fence already exists that will be replaced with new materials then simply count the number of fence panels that are present. Wood privacy fences are almost always spaced with posts 8 foot apart on center (this means the measurement from the center of one post to the center of an adjacent post is 8 feet) but always measure to confirm. Lumber is available in standard 8 foot lengths and offers a balanced solution of cost and strength. Spans longer than 8 feet will likely have problems with sagging unless the 2×4 cross beams are upgraded to 2×6 dimension – this also changes the appearance of the fence panel. The fence rails should be 2×4 lumber from pressure treated pine or cedar wood. The style of privacy fence and the choice of wood used on the pickets will have the biggest impact to the aesthetics of the wood privacy fence installation.

If there is a need to set the posts at some other length, be sure to choose an increment of 2 feet (i.e. 6 foot, 8 foot, 10 foot, 12 foot etc… ) otherwise installation will require every cross beam to be cut to length. What about the premade panels available at the local home improvement store? These premade panels are often made from pressure treated pine with three cross beams that are 1.5×2.25 inches and frequently sag after installation. The cheap fence panels can be suitable for urgent repair purposes but are not recommended for use when installing a new or replacement fence.

Wood fence posts must be pressure treated and rated for ground contact. Galvanized steel fence posts offer longer life after a higher initial cost for the post and the post rail brackets that are required. Many homeowners dislike the appearance of the steel posts but this can be overcome by a simple coat of paint or wrapping the steel post in a wood enclosure.

And it sure helps to have some local friends.

Hasta pronto, if you liked this you’d love my Insider’s newsletter on living and investing in Ecuador,

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How to save on your income tax in Ecuador

This week I filed my income tax return in Ecuador due every March (impuesto a la renta).

My accountant charged $30 and was done in 20 minutes.

It was so quick because she already handled my monthly sales tax declarations and already had the paperwork on hand.

Based on the monthly tax declarations for all of 2016 she quickly pumped out the annual return and submitted it.

Every independent contractor is entitled to a couple of deductions they can take in order to save on their taxes, such as mileage and equipment expenses. Self-employed people can also deduct their health insurance premiums, state and federal taxes and home office expenses. The self-employed should consult with an accountant to ensure they claim every deduction possible. You can check here how to pay taxes as independent contractor.

When you file if you have employees insist that your accountant submits the form declaring how much you pay to employees.  That will lower your tax burden greatly.

If you show less than $11k in profits for the year you pay ZERO income tax in Ecuador.  And it’s a sliding scale on up to the highest tax bracket for folks who make more than $115k profit who must pay 35% tax.

Hasta pronto, if you liked this you’d love my Insider’s newsletter on living and investing in Ecuador,

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How to see the coast of Ecuador without a car

By far the easiest way to see the coast is renting a car from one of the branches from RCS of London, but if you are like me when I first got here and intimidated by driving in a foreign country, I don’t blame you!
The good thing about Ecuador is you can bus it and be just fine.

IF YOU ONLY HAVE ABOUT A WEEK…

Most fly into Guayaquil.  From there I suggest taking the shared taxi company for $10 a person, 2 hrs, to Salinas.  They leave from the Ramada in Guayaquil.

Skip Playas if you don’t have a car.  Too off the beaten path.

Head straight for Salinas, the taxi company drops you off right at the malecon (boardwalk) whereas the buses only take you to Ballenita which is a nearby town and you have to catch a $5 cab there to Salinas.

Stay as long as you like then catch a cab to the bus terminal in Ballenita ($5) and catch a chicken bus north to Montanita-Olon (1 HR, about $3).  There are also direct buses Guayaquil-Montanita if you wish to skip Salinas.

From there on up to Puerto Lopez you can hop on hop off buses as you like at beautiful beaches like Nunez, San Jose, Ayampe and Las Tunas. The buses only run until around 7pm though and pass every half hour or so!

From Puerto Lopez you can catch a motorbike-taxi to Los Frailes Beach or in the other direction also minutes away Salango. very nice!

And there you can hop on a bus going north to Puerto Cayo (45 min) which has some great places to eat seafood on the beach and enjoy the view of the islands offshore.

From there the easiest, best route for non-car people is to catch the bus inland to Jipijapa and onto PortoViejo (1 hr).

I suggest sleeping in either Puerto Lopez or PortoViejo as the options in the other places in between are suspect.  From there you can go to Manta to catch a plane back to Quito.

IF YOU HAVE LONGER THAN A WEEK…

Or from PortoViejo you can venture north.  I’d skip Crucita as it is a bit hard to get in and out of there by public transport if your plan is to beach hop north, and instead check out San Jacinto-San Clemente (1 hr) Beach which is right on the busline from PortoViejo to Bahia.

From there I’d catch a bus north to Canoa (20-30 min).  Another beautiful surfing beach.  That’s where I’d stop my journey as buses heading north from here are few and far between (unless you have a lot of time.)

IF YOU HAVE MORE THAN A MONTH…

Head north from Canoa to Pedernales where i would not stay, just connect north, then skip Cojimes (too hard by bus), and go straight to(3 hrs) Mompiche-Portete. 

From there skip Muisne, the Galera area, and even Same (too hard by public transport) and head straight for the Sua-Atacames-Tonsupa (1-2 hrs) area just south of Esmeraldas where when finished soaking up the sun and eating seafood you can then catch a 6 hr overnight bus to Quito.

That’s how I’d do it without a car (and I have many times!)

Other beaches not mentioned here (like Manta!) I’d skip cause they are just too dang hard to access via public transport if you are going north-south or south-north up the coast.

971 Alfonso Tobar y Tulio Garzon Tababela PICHINCHA 593 ECUADOR
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Why you should start a tourism-related business in Ecuador now

2017 is the time to start a tourism-based business in a place like Ecuador where 80-90% of the foreign tourists are American (aka from the USA).

Why?

Because this is going to be a great year.

Being in the industry myself, I can’t help but notice the uptick in travelers so far this year.

Never before in the last 10-15 years has the dollar been so strong, the (DOW) markets at record levels and real estate strong all at once.

In other words, peoples 401Ks look great, their real assets on paper greater, and the dollar is stronger than its been in over a decade meaning you can buy more abroad. And people are realizing it.

Now, the strong dollar may have an adverse effect when drawing Europeans, Canadians and others outside the dollar zone, but who cares when your market is 80-90% Americans in a place like Ecuador?

So if you ever dreamed of opening a tourism-related biz in a place like Ecuador, now is the time to do it!

Hasta pronto, if you liked this you’d love my Insider’s newsletter on living and investing in Ecuador,

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How much should you pay a caretaker for your beach house in Ecuador?

Good question.

Not much.

I’ve owned several properties on the coast of Ecuador, and currently own one for sale.

All I can say is how much I pay. I pay a local guy $10 a week to go to the house once or twice a week at different times and check if everything is OK, dust and sweep up a bit, water the plants and just kind of spend a bit of time there.

That’s it.

He also shows the home to interested buyers upon request. So one important requirement is that he has and answers a cell phone.

Like anything in Ecuador, always try to pay the locals the going rate, or a little bit better, or they will probably label you a rich gringo, get greedy and want more and more and more.

Best to ask other locals how much they pay for similar services before paying yourself.

NEVER have the mindset of, “well, in the USA we pay this much for a similar service, so anything less would be a deal”.

Newsflash: this ain’t Kansas anymore, think like that and you will overpay for sure!
Hasta pronto, if you liked this you’d love my Insider’s newsletter on living and investing in Ecuador,

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