Category: Ecuador for Investors

I get it all the time.

People know I’m in the hotel biz…

…and they tell me they have a property and are thinking about putting a hotel in Cuenca.

But truth is, I would NOT put a hotel in Cuenca, except for one type.

You see, Cuenca is already loaded with good hotels, and they’re cheap!

An acceptable option at $10-15 per person per night can be found quite quickly.

The type of hotel I’d put in Cuenca is an apart-hotel.

The difference is the rooms will often be mini-apartments with at least two different ambiances, a living/cooking area and the bedroom.

Unlike normal hotels the rooms have a kitchen or place to cook as most people would get tired of eating in the street for weeks on end.

And they are meant for longer stays.

Usually a few weeks, maybe a few months at a time with of course special weekly and monthly rates.

And they often serve as a “half-way” home for folks who recently arrive in Cuenca and begin the search for their permanent home.

An apart-hotel is a great option for people because agreeing to rent something long-term before they arrive and see it is a big mistake.

Best to look around once here.

And at least initially its nice to take advantage of a few of the services of a hotel like an attentive, knowledgable front desk staff, laundry service and WIFI Internet from day one yet still be able to cook for yourself and enjoy the privacy of your own place as you get your feet wet in a new country.

You could even sell off the individual suites to private owners and continue to manage them and rent them out in a property-manager-type role.

The really neat thing is you could promote it as both a hotel and a condo rental.

There are already a few of these type hotels that exist in Cuenca, but I’ve seen the demand in the area to justify another well-located good one.

More so by far than anywhere else in Ecuador, a lot of expats are moving to Cuenca.

That’s the hospitality niche I’d attack in Cuenca.

Any takers?

You can count me in.

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“There it is.” I said as I signed the sales deed this week.

I sold my 4 bedroom, 3 bath beach house near Montanita for $45k.

The same one I bought entering 2012 for $15k.

Once I bought the property I put about $2k on this https://www.cleaningservicesbroward.com/commercial-cleaning-services/  to clean it out and lightly furnish it with the basics being a stove and a few plates, a mini-fridge and a few beds. The price was pretty reasonable, if you ask me.

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After all, air conditioners have a complex system consisting of compressors, piping and ducts, heat exchangers, and electrical components that need to work in unison efficiently at all times. Unfortunately, they don’t and therefore, we need an efficient air conditioner service like AC repair Spring TX conveniently located near our neighborhood, which can fix our system professionally and in a short period of time.

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It is a gadget that removes hot air from your room and recycles back cooler air thanks to the Eco plumbing heating and air conditioning technology. Although in a generalized way, we perceive conditioning to be cooling of the air, in fact, the term air conditioning-in a broader sense-refers to controlling of temperature, humidity, and dust to provide optimum human comfort. Hence, such a system needs a complex maze of electrical, mechanical, and various other components to keep it working properly. Minor faults and defects can possibly be fixed at home,otherwise, you need help from a qualified air conditioner contractor to get to the root of the problem, specially when the problem is so big that it requires a new air conditioning installation.

The idea was to rent it as a budget short term rental and keep it as my own weekend getaway when I lived in hot, humid, muggy Guayaquil. and when the room gets really hot many air conditioning services can fix and maintain the device.

After 3 months or so of owning the property someone who had rented the property offered me $40k to buy it.

I mistakingly turned it down.

Meanwhile, I quickly discovered there was a huge demand in that area of the coast for inexpensive rentals in the $300-450 a month range. Other than this if you need Estate planning lawyer then refer this side www.parlinlaw.com.

In 2012 I kept it rented about 90% of time.

So much so in late 2012 I decided to build two one-bedroom one-bath beach bungalows on the same property. A surveillance security system works a deterrent in a lot of cases. Instead of catching criminals in the act, you actually scare them away see it here. All with a nice oceanview and a 30 minute walk from the center of Montanita.  A pre-fabricated wooden one for a total with furnishings of around $4500, and a brick/bamboo bungalow for around $6500.  They both rented well, the brick/bamboo one more so, for around $230 a month each.

Both were done building in about a month.

Then in early 2013 I decided to put the property for sale for $60k because a friend of mine in the area said the area was hot and that I could get $80k.

I did start to notice the influx of foreigners in my tiny little town next to Montanita (Manglaralto) and the building going on all around me. Bingo, I thought. This is not what you learn about when you are learning how to get your real estate license. Although important, the real learning happens on the street and everyone knows it.

Plus, the towns streets had just been paved.

I chose not to work with any realtors, just post it online myself.

And after a few months I didn’t get any bites, so I decided to take the property off the market as I didn’t really want to sell it at the time anyway.

But after moving to Quito, as my business grew in 2013, I had less and less time to manage the rental from a distance.

The property deteriorated and became harder to rent.

Often 6-8 months would pass between visits from myself.

Then in December of 2013, i decided to repost the property online for sale, this time for $45k.

And within two days I had several interested folks, one foreigner that lived in aother part of Ecuador called so worried I would sell it he gave me a deposit of $250 just to hold it til the weekend so he could make it over to see the place.

I believe the increased interest this time around had to do with both the lesser price and the time of year, right at the beginning of high season on the coast when most other folks take their properties offline.

But when he actually saw the place he wasn’t impressed.

You see, it is an Ecuadorian-made very simple dwelling, needs work, and certainly not up to most Americans standards.

He passed.

But I continued to get a lot of interest and several people a week wrote and visited the property with my caretaker.

In the meantime, I got a few low-ball offers but finally in the third month I had the property for sale (March 2014) I got a call from a real estate agent in Montanita saying he had an interested buyer.

He worked as a buyers agent and was charging the buyer 5% commission but not charging me.

The person from the US visited the property several times over the next few days and made the offer for my full asking price.  I took it, he deposited $1500 as an earnest deposit.

I then went to the coast after he had already left back to the States to sign the deed to close the sale.  His agent took care of the rest and paid the necessary taxes.

The buyer then wired the rest to my account.

The closing took about two weeks.

Done deal.

Besides what i made renting the property, I made roughly $15-16k off the sale.

Not bad, but I could have made more if I wouldn’t have made the following mistakes…

1. Understand properties in Ecuador (a cash economy), especially higher priced ones, usually (but not always) take a long time to sell.

2. I should not have added the bungalows to the property as they didnt do much for the property value.

3. Don’t get emotionally attached to a property, it should always be for sale from the moment you acquire it for the right price.

4. I should have used local real estate agents from the beginning as it pays to have a salesmen showing the house instead of my older caretaker.

5. Don’t try to do too much with a basic coastal-Ecuadorian (boxy) construction, it is what it is, the only way to make it really nice is to level it and start new.

Other interesting things I learned from owning this property…

– A lot of people like sleeping near a tourist hot spot like Montanita but not right in it.

– As mentioned previously, there is A LOT of demand from foreigners for cheaper rentals on the coast as the properties available go from really cheap and generally unacceptable for foreigners to expensive places over $800 a month.

– There is a MUCH higher demand for rentals on the coast of Ecuador in the North American winter months from late December to early April compared to the rent of the year.

– You can charge a lot more than usual during long weekends and holidays in Ecuador if you market to Ecuadorians.

– Ecuadorians look for rentals with caretakers for security, TVs and a 24 hour heating and cooling ,   while foreign renters prefer privacy (no onsite caretaker) and NEED WIFI Internet while a TV and AC are not so important, but the use of other security measures such as outdoor cameras and surveillance from Alarm New England could be essential for the security of these rentals. View your camera system through IOS & Android apps. A web portal is also available for viewing on any computer, view publisher site for more details about Analog cameras, many of which are currently being used in existing surveillance systems, tend to produce very poor quality videos especially if the subject is too far or constantly moving. This makes them slightly less useful when trying to identify incidents, persons, or specific details. Mammoth Security takes advantage of HD Digital Video Cameras that are fast and capable of producing video footages several times clearer than an analog camera’s output. HVAC services Goodlettsville includes a thorough inspection of all parts of your HVAC equipment, with our highly trained team making sure your system is delivering safe and effective air conditioning all year round.

Hiring air conditioning services from professionals will help you keep a good maintenance and be sure that your house has a good air flow and avoid health issues.

About HVAC service read more here. These comprehensive checks mean your system should always be working as intended. Need to change your air conditioning unit now? Well these workers can help you out, so that you don’t need to do it all alone.

– It would have paid to have a caretaker that speaks English to help the tenants settle in.

– If possible, it pays to market to foreigners already living somewhere in Ecuador, as most foreigners still in their home countries are generally tire kickers.

– The best way to market your property to Ecuadorians is still the areas Sundaypaper.

So, what’s next?

Another property purchase i’m sure, but probably on the coast of Ecuador as I still think the best deals for flipping are there.

Stay tuned!

And to learn how to find the unpublished property deals no one else knows about, subscribe to my weekly Ecuador Insiders Newsletter below, you can unsubscribe at any time:

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This week I was involved in an Ecuador real estate transaction.

More on that in my next email.

But it reminded me of something very important to know before you buy property in Ecuador.

To know who typically pays what in a standard Ecuador real property transaction as it may differ from your home country.

Often a foreign buyer will get stuck with paying the whole damn thang because they just didn´t know otherwise.

Typically in Ecuador, unless previously negotiated, the buyer pays all the fees associated with drawing up the new deed and getting it notarized, then registered in the property registrar (escritura y registro en el registro de la propiedad).

The buyer will also pay the tax to the municipal called ALCABALAS.

The seller is expected to pay all past due annual property taxes (PREDIOS) and get the property current. Then I talked with this amazing company called Jim Wilson & Associates where these professionals showed me the properties I was looking for.

The seller is also expected to pay the capital gains tax called PLUSVALIA which is calculated based on the official assessed value from when the seller bought the property to when he sells it (not based on actual purchase price).

The seller is also expected to provide proof all the energy and water bills are current.

This is how most local Ecuadorians do it.

Now you know so you don´t get stuck footing the whole bill as the buyer, cause they will lay it to you if they see you don´t know!

And to learn how to find the unpublished property deals no one else knows about, subscribe to my weekly Ecuador Insiders Newsletter below, you can unsubscribe at any time:

First Name
* Email
	* = Required Field

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