Real Estate in Ecuador: Low Cost Beachfront Property
Beachfront property in Ecuador can still be bought for less than $40,000. But at the risk of this sounding like a sales pitch, it is in limited supply.
Ecuador is an amazing, peaceful place with beautiful beaches, warm weather and really inexpensive beachfront bargains. With each passing year as global warming sets in, the hurricanes seem to be getting stronger. They are turning into destructive forces beyond human containment. This is why you should consider buying property out of hurricane paths.
Unlike the Dominican Republic, Puerto Rico, Mexico and Costa Rica, Ecuador is completely out of hurricane paths. Ecuador faces the Pacific Ocean sheltered from the hurricanes that hit Central America and the Caribbean.
Bargain basement prices and increased exposure will light the fuse and turn Ecuador in to the next hotspot on the world´s beachfront real estate scene. But if you don’t know what you are doing, you could easily get duped.
So, if Ecuador is such a great place why are the prices so low?
Ecuadorians don’t value beach houses the same way that Americans and Europeans do. They like to go to the beach twice a year during school breaks, stay in nice hotels, party and then go home to their big cities.
It’s a fact the locals don’t have the money to push prices upward fast. On top of this, the lack of credit available for housing purchases in Ecuador is another reason why the real estate prices have not jumped in recent years. Financing your home with an Ecuadorian mortgage is possible, even for foreigners, but very expensive. With prices so low, most expats prefer to buy in cash.
The real price-pushers (we Americans) have focused on beachfront areas closer to home. But Ecuador is elusively close, only a few hours by air from Miami. Other places on the coast still lack basic infrastructure, especially for retired expats. For example, golf courses are almost non-existent.
Currently, the coast is dotted with Europeans who have bought in, with relatively few Americans. Some feel the lack of Americans has actually deterred other Americans from buying in. Generally speaking, Americans like to go where there is already a solid expat community whereas Europeans are actually drawn to places where there are few other Europeans.
Real estate prices in Ecuador have risen slowly since 2000. It’s hard to tell exactly because there is no Multiple Listing Service, but some local real estate experts predict rises of 15% a year while others say prices have stayed about the same! It depends who you ask, expatriate or local. From my experience mainly working with local experts, prices have stayed about the same in recent years except for a few select areas.
No major leaps have been seen, as was seen in the US in 2003-2005. This almost dormant market may be attributed to the relative instability of the local economy. In 2000, the Ecuadorian currency plummeted in value, banks closed, people lost their savings, and the government switched to the American dollar as their currency. But the opportunity for rapid growth is there due to the limited supply. The Ecuadorian coast is not that big and large sections of it are uninhabitable due to national parks or swamps.
The Southern Coast
This is where the action is, or where it could be shortly. The biggest winners in an investment are always the first ones in. We know one thing for sure looking at Costa Rica. Beach front property doesn’t go down in value.
By southern coast I am referring to the area of Ecuador from around the city of Manta down to the city of Guayaquil. The locals call this area “La Ruta del Sol,” while foreigners call it “a good investment.” The prices have slumped on the southern coast after what happened locally in November and December of 2007.
Basically, Ecuador is divided into provinces like the United States is divided by states. Up until December of last year, the southern coast was in the same province as the country’s largest city, Guayaquil. There was a referendum and a vote, and the locals opted out of the province, creating their own separate province called Santa Elena.
This doesn’t seem like much, but it’s a huge blow (in the short term) to the coastal real estate values and businesses. Anyone familiar with the area knows that the region lives on tourism, and 80% of the habitual tourists come from Guayaquil. When the people on the coast broke away, they created a huge resentment in the people of Guayaquil, causing the “Guayaquileños” to start thinking about alternative destinations in Ecuador for travel and buying real estate.
The move by the coastal people was extremely short-sighted in that not only did they overlook where they get their main revenue stream, but also where they get most of their public funding from. Most of the tax dollars that are spent on the coast came from Guayaquil.
Now reverting back to the effect on real estate, a large percentage of people who own property on the southern coast are from Guayaquil. With no people from Guayaquil buying and some getting out, it makes now an excellent time to buy.
But why Ecuador?
The falling dollar is another big concern for Americans abroad. Luckily, in Ecuador they use the American dollar as their official currency, so we don’t have to deal with exchange rates and currency risk. As the dollar falls, in Ecuador you won’t feel the pinch. In addition, Ecuador has amazing growth potential, especially on the coast. As the prices of Costa Rica, Panama and Nicaragua soar, people will start to look elsewhere for their dream beach house.
Where is the natural next place to look?
But let’s take a quick look at the other beachfront options available in South America.
As soon as I crossed the Ecuadorian-Peruvian border, I could sense the misery in the air. The Peruvian coast from top to bottom is one big, undeveloped desert with trash blowing in the wind. Simple things like running water can be hard to come by. There are also major title issues that make it risky to buy in Peru.
Chile is beautiful, but not tropical. The prices are high, around US levels as well. Argentina is not tropical either and is really far from home, as is Uruguay.
Brazil is gorgeous, but is expensive now with the falling dollar.
Colombia is a wonderful place to visit, but with rebels still in the countryside, why would you buy there? Especially, when you can rent so cheaply.
Your other South American beach front option is Venezuela, where Hugo Chavez is currently giving unoccupied property to homeless people, all the while promoting an anti-American rhetoric amongst his people.
Thus, leaving Ecuador as the first place you should consider in South America when looking for beachfront property. Ecuador is what Costa Rica was in the early 90′s…a little rough around the edges, but off the beaten track and beautiful.
Unlike Thailand and other Asian countries, in Ecuador you can easily own property in your own name and have all the rights that a local has. Foreign investment is not only welcome, it is encouraged.
The people of Ecuador love foreigners, and everyone who comes feels welcome. Of course there are some bad apples like everywhere, but it is common to be invited to someone’s dinner table soon after meeting them.
Ecuadorian Spanish is some of the clearest, slowest spoken arguably in all of South America, making Ecuador a great place to learn Spanish as a second language. And English is becoming more widely spoken with each passing year. The weather is about the same all year around. On the beach, there is always a nice breeze off the ocean and the weather is pleasant, in the 80s, similar to Hawaii. On some parts of the coast the Ocean is as still as a lake, while in other parts the waves are big enough for some radical surfing. Whale watching is another popular activity during September and October.
On top of everything, Ecuador is still only a three and a half to four hour flight from Miami. By air it is only about one hour from Panama.
Ecuador is a place of many faces. To a tourist, the place looks laid back and peaceful, but if you pick up the newspaper there is always something interesting going on. Just last year in 2007 Ecuador created a new “congress” because the people thought the existing one was too corrupt. In 2005 there was a coup that overthrew the president. Every few years the governments and constitution seem to change.
But all of this happens with relatively little affect on daily life, property rights or the real estate market. Especially as a tourist, you won’t even realize anything is going on.
The current president is a lively fellow, who supposedly sides with Chavez, but Ecuador is way too Americanized and capitalist to become anything close to another Venezuela. The president’s political views are enough to keep some people away, but they shouldn’t do.
Frequently Asked Questions
Can foreigners legally buy and own property in Ecuador?
Yes, it is legal for foreigners to own property in their own name in Ecuador. You can enter Ecuador on a tourist visa, and even purchase a home with that same visa.
Do I need to apply for a visa before I get to Ecuador?
No, you do not need to solicit a tourist visa before you get to Ecuador. Upon arrival, you just show your passport and they stamp it, granting you from 60-90 days to stay in Ecuador as a tourist (the duration depends on the mood the official is in.)
After purchase, how do I get a resident visa?
The process is very simple. Upon purchasing a home or land worth at least $25,000, you will be considered an investor in the country and after completing the necessary paperwork with a local attorney, you will be granted a “resident visa.”
The exact requirements for a resident visa constantly vary, but not much more is needed than your passport, a medical exam and proof of purchase. Of course this process should be completed with a local attorney. In addition to your resident visa, other visas are available to you. A work visa can be had easily for around $150 and a local sponsor.
A student visa can be had with the enrollment paperwork provided to you by a University or language school. A “working transient” visa can be had with a local sponsor and acts like a work visa, but with fewer requirements. (I have used this visa. It is very easy to get.)
Lastly, something you won’t read about in your guidebook, but which often happens, is overstaying your tourist visa. Ecuador is not very strict on it, and many foreigners do it. All you have to do is pay a fine upon exit of the country around $200. All other options should be considered before this one, however. It is always best and safest to stay legal.
You can find local lawyers easily upon arrival or online on the www.paginasamarillas.com website.
How are the conditions of the roads?
On the southern coast from Salinas up to Olon there is a new, freshly paved road very pleasant for travel. The roads on the southern coast (south of Manta) are great. The roads on the northern coast from Manta northward are a work in progress. They are useable but not comfortable. Some areas are better than others, but new roads are currently being paved around the particularly problematic areas around Bahia de Caraguez.
How are Americans received?
In short, Americans are received very well. Many Ecuadorians have close family members in the US working, and thus feel a close tie to the US. People have mixed feelings about the American government and president, but towards the people nothing but respect and acceptance.
Are there any prevalent tropical diseases?
No. There are no diseases that can’t be found in the US as well. No special shots or vaccinations are needed before coming to Ecuador. However, in the far eastern part of Ecuador the Amazon jungle begins. Before entering any jungle (including the one in Eastern Ecuador) you want to be sure you have your yellow fever vaccination and pills to protect you from Malaria. However, on the coast you won’t need to take any special precautions.
What leisure activities are available on the coast and inland?
Within a tiny area about the size of Nevada, you have access to many different environments. On the coast, there are beaches great for surfing, while others are calmer making them great for swimming, sailing and ocean kayaking. Snorkeling and scuba diving are popular activities in a few select spots as well. Hand gliding is popular off the cliffs of Crucita. In Salinas and Manta you can observe whales up close from June through September.
Many hiking trails abound in the regions national parks. Further inland you will encounter the enormous Andes Mountains. Within these mountains are a wealth of rafting, climbing, biking and camping opportunities.
Further east you have the Amazon rainforest, where you can visit with indigenous communities, bird watch or flower gaze. The only sports that aren’t available in Ecuador as of yet are winter or snow related sports due to the climate. Another sport not widely available in Ecuador as of yet is golf.
How good is product availability?
There is plenty of “inventory” available as of June/July 2008. This could change at any time. Both houses and land are available, and at very inexpensive prices. If you are going to buy an existing house, be sure to thoroughly inspect it. Many Ecuadorians build their houses with less attention to detail than we command in the US.
As well, many Ecuadorians pack their houses full of people which could cause wear and tear, even on a newer house. Check specifically for uneven tile and cracks in the walls before purchasing.
How is the basic standard of infrastructure, especially in terms of utilities like electricity, water, phone and gas?
Depends on where you are on the coast.
In the more developed areas of the coast, especially south of Manta, all services are available and all that needs to be done is call up the local service companies and have them connected to your property. Some people in remote areas of the northern coast around Esmeraldas have their own generators, just to be safe.
Many people on the coast have their own wells dug to help preserve the environment and save on water bills. To get these services installed in your house you will need to make a request for installation at the corresponding municipal office. If you are located somewhere along the existing network, installation is immediate, if not, a delay could be seen.
Is there an active expat community?
In short, not really. Ecuador is still an off-the-beaten-track destination that has attracted, at least to date, the kinds of people that want to get away from their home cultures and experience new ones. In many places of Ecuador, you could go days or weeks without seeing another foreigner. To give you an idea, many of the expats that are already down here are the kind that speak Spanish. However, Expats in Ecuador are welcoming of other expats.
A few scams to avoid
You will notice that land and houses just one or two blocks up from the ocean can be had very cheaply, even less than the headline price stated in this article of $40,000. Do not just buy land and sit on it. In Ecuador, like most of Latin America, if the land is not in use, someone else could come “squat” on it, build, and claim it as their own. It doesn’t matter if it is legal or not, it happens. If you buy land, start building on it immediately.
Try to be present when constructing your house if possible. If you are not around, you may have delays and cost overruns. The fact remains in Ecuador many construction workers will steal materials and slack off if you are not around to apply a little pressure and enforce the deadlines.
Where to buy and current prices
There are dozens of options, but here are a few to get you started. Your adventure in Ecuador will probably start in Guayaquil, the largest city in Ecuador on the southern tip of the southern coast. It is a loud, smoggy, typical port town with attitude in the mold of Naples, Italy. There is no beach nearby.
Salinas is a resort town on the southern coast that fills up during local vacations, but is empty the rest of the year.
A great place to start your search is around the small town of Ballenita. This is the area that local experts expect to see boom the soonest. The water is calm and clear, and the sun always seems to shine. It is not too hot either, due to the soothing winds blowing off the ocean. The beaches here will remind you of the beaches around southern California, golden sand with houses on small cliffs overlooking the sea.
To give you an idea of the prices, there is a plot of beachfront land available (1,200 square meters or 12,912 square feet) in Ballenita listed at $45,000 as of June, 2008.
In La Milina on the southern coast, there is another plot of land available (250 square meters or 2,690 square feet) with an ocean view for $22,000 as of June 2008.
In another beach town on the southern coast, Playas, there is a listing in June of 2008 for a 2,690 square foot house (2 levels, two bedrooms, one bath, kitchen, garage) one block from the beach for $22,000 as of June 2008.
Another hto spot to look at is Olon. Olon is a tiny city right next to the most popular spot in Ecuador for foreigners, Montanita. Montanita is a surf town full of foreign hippies and backpackers. Montanita could be a great place to buy if you have always wanted to own your own guest house. Olon is quiet with an excellent, wide beach. It is often cloudy here though for some reason.
Arguably the most beautiful beaches of Ecuador are found in “Los Frailes” close to the national park “Machilla.” Some places may be restricted to real estate development due to the proximity of the park, but some lots are available for purchase.
One last word, the best deals aren’t on the internet! Come and see for yourself, the worst thing that can happen is that you will have a wonderful vacation but you might find the beachfront home of your dreams.
*For more details of properties in Ecuador see www.ecuadorrealestate.org