While I am not an expert about Ecuador Real Estate, I am going to offer a few of my opinions based on our observations. Many of you have questions about investing in Ecuador and I will do my best to answer them. While Lisa and I have done extremely well investing in Real Estate in the States, our winning streak will be decided over the next few years here in Ecuador.
Many of the Expatriates who live here in Ecuador advised us not to buy, but to rent instead. They felt like the rental market here is so cheap that it doesn’t make sense to buy. A rental here in the Vilcabamba area can go anywhere from $200.00 for a small apartment all the way to $1,200.00 for an elaborate house in the gated San Joaquin neighborhood. Keep in mind, there are plenty of houses to rent under $700 per month. Most of these rental prices include utilities and some include internet. One of the reasons behind renting is the fact that placing your money in a CD here in Ecuador can offer a great investment. Interest rates on a 1 or 2-year CD can be as high as 8.5%. On a $50,000.00 CD that returns $4,250 per year. That affords a rental of a little over $350.00 per month. Now, one must consider the fact that CD rates can go up and down over time. You may not be offered that same rate when your CD renewal comes around. And yes, you can purchase a CD here without being a Resident! If you are interested, we have people to help you with that.
Based on information we were given by our Realtor and our Architect/builder, Real Estate prices in Ecuador were down from around 2013 until 2016. Prices are starting to creep back up just a tad. There are many Expatriates who purchased back in 2012 when the market was high and cannot get their money back out of those homes. Lisa and I have always been very fortunate to be able to invest when markets were in the dip and about to spring back. With one exception, I have never lost money in Real Estate. We intend to live a very long time on the property we have purchased here in Ecuador. I believe the appreciation will outperform a CD at 8.5% during that same period. Especially because of improvements we are making to this property. We are turning this into an income producing property by renting the Casita through Air BnB. We have a secondary small container home that we could rent as well. In addition, our house was rented for $750 per month at the time we purchased the property. All utilities were paid by the tenant. Our property could possibly generate somewhere between $1k and $1500k per month.
We see many homes being built all around the Vilcabamba area. We see a lot of businesses downtown that had an unfinished second or third story, who are now finishing them to rent as apartments. These are primarily Ecuadorians making these investments. This means that money is flowing and the potential to generate income must be driving this confidence. We certainly see it as a positive sign for Southern Ecuador. As we understand it, areas by the coast are still recovering from the earth quake several years ago. There are still some infrastructure problems and prices have not rebounded.
Having said all of this, I believe it is an excellent time to invest in Southern Ecuador. The current government is stable and making what appears to be some good changes to reduce debt and spending. The new president has done away with Capital Gains tax and is making other conservative moves to bring back business to Ecuador. Ecuador is made up of provinces, and we live in the Province of Loja. The Governor of Loja was just recalled in a landslide vote of 70%-30%. This Governor wanted to take property from anyone who lived along a river. He wanted to take 30 meters away and declare it public lands. As you can imagine, this was not popular with landowners or investors. That idea is now nixed until they elect a new Governor.
If you have any thoughts about investing in a foreign country, I would suggest that you conduct due diligence as we did before relocating here to Ecuador. You can’t do too much research. Above all make at least one visit to the country first and see as many areas as possible. If you are thinking of Ecuador, Real Estate information is not always readily available. Many of the real estate websites are difficult to surf and are usually outdated. There is only one that I recommend, and that is Abundant Living Ecuador. You can find them on the web www.abecuador.com or on YouTube. Jesse Bayer is the owner and he has amassed many hours of videos with solid information about Ecuador Not just Real Estate listing, but good information about the country, politics, economics and relocation. We consider Jesse to be a valuable resource and very trustworthy. If you subscribe to Gary Scott’s “International Living” magazine, I would advise you not to waste money on any of his courses. You can get the same information from Jesse or myself for FREE! Gary’s courses and Real Estate tours are overpriced.
Now, you have our opinion on investing in Ecuador. Do with it what you will. We are always asked questions about other countries and our answer is almost always the same. It comes down to security, climate, economy and lifestyle. We made the right choice for us.
Many of you have asked for more pictures from us. One way to get picture updates daily is to follow us on Instagram (joe_lisa_in_ecuador). We add new pictures almost every day. We have videos on our YouTube channel – Joli Farms. I would also suggest downloading an application for your cell phone called “Whatsapp”. I use it to communicate with people everywhere. Everyone here in Ecuador relies on it heavily. I use it to communicate with my Sister in AZ. several times a week. We can send texts, voice messages, pictures and videos for FREE! You can search for us as joeschram1957 and then send us a message. Easy Peasy! We also use the web version of Skype to do video calls for free with the states. You can find us on Skype as Joe Schram.
We absolutely love to hear from each one of you. We love to answer questions about anything! We are anxious to have visitors, so please let us know when you would like to come. We always suggest at least a week because of travel time. We look forward to hearing from you all soon.
August 2018
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