Ecuador…the small South American country that sits right on the equator…is blessed with many advantages—particularly its diverse, gorgeous terrain, and fantastic climate.
No matter what you’re looking for…from lush rainforest to majestic mountains to sun-kissed beaches, you’ll find it here. And about that climate…daytime temperatures in the Sierras—along the Andes Mountains range that cuts through the country from north to south—rarely top 75 F. On La Costa—the coast—temperatures typically top out in the mid 80s F. El Oriente (the eastern rainforest) fares about the same.
The cost of living is hard to beat. It’s easy for a couple to live comfortably on $1,500 a month. Foreign residents are welcome to join the country’s IESS Social Security healthcare program at just $81 a month for a couple for full coverage. (The best IESS clinics and hospitals are in the major cities of Quito, Guayaquil, and Cuenca.)
As for the real estate market, there’s still opportunity in Ecuador for farsighted investors. But you have to be savvy.
Here’s what’s happening: While most of the rest of the world was suffering through economic crisis from 2007 to 2014, Ecuador was on a roll. High oil prices fueled many welcomed infrastructure projects. Real estate was selling like hotcakes and prices rose accordingly.
But as oil prices dropped, the country’s economic growth slowed. So did real estate sales. According to the country’s national real estate association, total sales dropped 60% in the last year.
But that doesn’t mean you’ll find drastic price reductions—at least among local sellers. Since mortgages aren’t common, they don’t feel pressed to sell in order to meet financial obligations. They’re content to wait out the current market slump.
While properties are selling on average for only about 5% less than at the peak of the boom, says one market analyst, there are a few fire sales if you know where to look.
The best places to find these bargains are in some of the more “gringo-style communities,” such as Cuenca, Cotacachi, Vilcabamba, and selected areas of the coast. As some foreign retirees look to move on or move up, they may be negotiable on their prices, especially if their properties have been on the market for a while. (Since they typically bought at low prices, they also have some wiggle room.)
How to find the best deals? Word of mouth opportunities can be the best. Ask around in the community you’re most interested in. You may be better off dealing directly with a buyer if you have the opportunity to do that. You may be able to negotiate a better price.
Importantly, though, you must have someone you trust working on your behalf…such as a well-recommended, reputable attorney.
Just to give you an example… In Cotacachi, a fully furnished 1,270-square-foot condo (from linens to a completely outfitted kitchen, including a dishwasher) with two bedrooms, two full bathrooms, and an enclosed sun porch in one of the town’s most desirable communities, is listed for $89,500.
The owners, though, who have moved to a home just outside town, are willing to take far less for it—as much as $20,000 less—especially, they say, if they can bypass the real estate commission.
Make no mistake: There are bargains to be had in Ecuador right now. You can negotiate a good price and buy a home to live in now or in the future, or for a decent return on investment. As foreign retirees continue to flock to Ecuador’s popular expat communities, there are just not enough rental properties to go around. Rental yields of 8% to 10% are common.
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