Category: Ecuador for Investors

I cringe when people tell me they have “X” thousands stashed away making 1% or 2% interest. In today’s environment, with the dollar depreciating like a used car, you’ve got to be a little more aggressive with at least part of your portfolio. For example, in 2008 I went to Thailand where the dollar was trading for 34 baht, now it’s worth 29-30, a 12% drop. I also passed by Colombia in 2008, where the dollar was trading for 2400 pesos, now it exchanges for 1868, a 22% drop in purchasing power in just 2 years!

Now, Ecuador can offer that higher risk, higher return payout you’re looking for. But there are a lot more ways to make money investing in Ecuador property than just the standard buy-resell! Today we’ll cover one I’ve done well with.

Money is cheap in the US. Even today, you still can get loaned money very cheaply compared to many other countries. A few years ago, it was a joke, that didn’t hold up.

In Ecuador, your cash is worth a lot more. Only very recently has mortgage rates started to drop, but the restrictions are still very tight (out of reach for most) and it’s common to see 12 year mortgages in the 8-12% annual interest range.

This environment creates a great opportunity when selling property in Ecuador to make money offering direct financing to your buyer. Of course, you have to collect a hefty down payment, get the house as collateral and arrange the contracts and everything through a good lawyer you trust. A good lawyer will supply you with “how to” documents and provide legal advice.

And it is a riskier play than just selling your house(s) outright, but hey, its a way to make money investing in Ecuador I feel few foreigners take advantage of. And that’s what this newsletter’s about…investing opportunities in Ecuador.

How much can you make off interest from your buyer? …

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Its official, Ecuador is senior-friendly, but it sure helps to know where and how to find the discounts.

The savings start for those that know, before they even go… on flights from the US to Ecuador.

Many airlines offer senior discounts, which you can access buying online or calling the airline directly. Sites like Expedia offer a quick 10-25% discount. Going direct to the airlines sometimes can yield you more…a few of the airlines that fly from the States to Ecuador are Delta, American, Aerogal and Avianca.

Once in Ecuador, most of the discounts for seniors apply to those who are already residents with their permanent resident card. For instance, for Ecuador residents 65+, flights within Ecuador with the local carriers are 50% off.

Both city buses and inter-city buses offer senior discounts (usually half price the normal fare, don’t have to be a resident).

Movie Theaters are available at a big discount. Many hotels in Ecuador also offer senior discounts if you ask for them.

You can even enter national parks for under half price and get deep discounts on a trip to the Galapagos.

In the cities; public pools, tennis courts and other sporting facilities also tend to have senior discounts.

Even the government lets seniors skip lines in several public offices and gives tax breaks, like returns of the VAT tax. You will need to register with the local tax authority (the SRI) and present your official invoices (facturas), to receive a refund of what you have paid in VAT deposited back in your bank account.

One key Spanish phrase to know is… “Hay descuentos para mayores?” (Are there senior discounts?)…

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In 2006-2007 I lived in Colombia for a combined 12 months between stays in Argentina and El Salvador. But since 2005 I have been living on and off in Ecuador.

I love both places, but even though they may seem similar on the surface, they are very different. Both with their pros and cons, you just have to pick your poison, like picking between a blond and brunette.

Here they are, compared:

Costs: Ecuador wins. Ecuador housing, public transport, healthcare and real estate are all cheaper. Food in both places is cheap. The only thing that is cheaper in Colombia are the flights from the US.

Food: Colombia wins. If you are a seafood fan, Ecuador will win in your book, but if not, things like a toasted arepa and a “bandeja paisa” in Colombia are to die for.

Weather: Ecuador wins. In Colombia, the wweather on the coast is almost year round scorching hot, whereas in Ecuador the weather on the coast is very mild and pleasant. Both places have an Andean mountain scene with fertile valleys with eternal springlike weather. i.e. see Medellin.

Beaches: Ecuador wins. A select few of Colombia’s caribbean beaches are stunning but they are just too hard to get to (like Tyrona) and Cartagena is a nasty dodgy dump (sorry but its true).

People: Colombia wins. Ecuadorian people love foreigners (especially ones from Europe, Australia and the USA) but not as much as Colombians do. This was kind of a no brainer. Colombian people can be stunningly kind, especially to visitors.

Attractiveness of the Women (and men): Colombia wins. Both the men and women looking for a mate will be happier in Colombia. Colombian women are flat out amazing, especially in places like Medellin, where every third women you see could be a super model in another country…but Ecuador is under-rated let me tell you.

Real Estate: Ecuador wins. Colombian property (in the cities) has already bubbled a bit as the US property boomed from 2003-2006. Ecuador just recently is starting to get discovered, but is still much cheaper and still high quality.

Residency options: Ecuador wins. It is not hard to get residency in Colombia but in general the DAS (immigration) is a pain in the ass (don’t tell ’em I said that). In Ecuador, everything from overstaying to getting different types of visas is easier.

Business Opportunities: Ecuador wins. I can only speak from personal experience, but Colombia still kind of has that “mob has the final say” mentally in business and you always kind of have to watch over your shoulder to be sure you’re not competing with someone you shouldn’t…in Ecuador you don’t have to worry about that weird stuff.

Healthcare: Ecuador wins. I cut my head open and had to wait for hours bleeding in a Colombian waiting room to get attended, so I’m biased I guess. I would suggest you to check  coolsculptny to know about better health care services.

Public Transport: Ecuador wins. In Ecuador buses are a quarter, and they are EVERYWHERE. Taxi fares start at $1. In Colombia, city buses are also everywhere, but cost almost $.60-.70 per ride with the heightened exchange rate over the last few years. Taxis are also double the price of Ecuador.

Expat Community: Colombia wins. For a long time there were hardly any expats in Colombia, so the small numbers really hardened the core of the expat community and to this day is very united and active.

Safety: Ecuador wins. Colombia has made HUGE strides since 2003, and I’d venture to say Medellin is now the safest city in all of Latin America, even walking around at night, but Colombia still has it’s rebel fights in the countryside and in the jungle, as long as that’s still there, Colombia won’t go very far. In Ecuador, the people are smaller and much more docile by nature. Guns are a rare sight. The most common crimes are petty theft, if a robbery does occur, it is often with a knife not a gun.

Overall: Ecuador wins. Hey this is an Ecuador blog, what did you expect? Well, seriously, I chose Ecuador for the atmosphere, it’s just way more laid back and westernized compared to Colombia, which is truly a world of it’s own (and I felt quite alone in it).

Hope that helps! Dom

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I love Colombia. Just like I love Ecuador. Don’t make me choose mama…

I’ve lived in Colombia about a year, and now Ecuador on and off since 2005.

It’s true what the Colombian tourism promoters say, “If you go to Colombia, you may never leave, but because you want to stay”…

The big cities and even the small towns of Colombia are safe, and have been since their recent president Alvaro Uribe really cleaned up shop in the years since 2000.

Wondering around in the deep jungle of Colombia is the main place I I’d say don’t go, due to known security problems.

Great people, good food, reasonable prices… all with a colorful, unique culture all it’s own, Colombia makes a great side-trip for folks living in Ecuador.

Getting from Ecuador to Colombia has gotten cheaper and easier in recent years…

Train is not an option. Buses are easy, cheap and plentiful (if you can stomach the hours on the road)…

From Quito to the southern border of Colombia is 5 hours by bus. From the border to the next largest city (Cali) is another 16-22 hours. To Bogota, or Medellin from Cali add another full day of bus riding.

But the buses in both Ecuador and Colombia are extremely cheap, at about $1 per hour traveled. Buses leave every few hours, I recommend buying your ticket at least one day in advance at the PanAmericana station in the Mariscal district of Quito.

Getting between the two by air is getting cheaper with each passing year as more airlines open flights…

You can fly from Quito to Cali direct in one hour for around $100-150 (one way) with LAN, and Avianca (depending on the season). Same goes for Bogota, but to Bogota you have a few more options like the local Ecuadorian carrier, Aerogal.

Sometimes carriers have specials for $50 one way, $100 round trip that they advertise locally in Ecuador in the papers, usually only a few weeks in advance of the sale dates…

Get your salsa shoes ready and be sure you know what an “Arepa” is before you go!

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