GringosAbroad Ecuador

7 Tips for Expats Buying Property in Ecuador

Posted in: Ecuador Real Estate, Living in Ecuador

Thinking about investing in the real estate market in Ecuador? In the following guest post, Jesse Bayer of Abundant Living Ecuador, shares tips for expats buying property in Ecuador. Bio at end of post. 

Buying property in Ecuador

Check our full guide to Ecuador real estate.

7 Tips for Expats Buying Property in Ecuador

1. Set Your Parameters First

Know your preferences and narrow down locations based on your parameters:

These are some of the things you should think about and then narrow down and rule out regions based off of your answers to these questions.

Once you have identified areas that meet your parameters you can focus your search on those regions and cut out a lot of would be wasted time.

2. Due Diligence, Due Diligence, Due Diligence

There are no comps available in Ecuador and no title insurance. Attorneys and related professionals do not have the same level of fiduciary responsibility you may be used to elsewhere. In addition, Ecuador may represent a new language, culture and business climate to what you are accustomed to.

This puts a huge onus on the due diligence process.

Hire a trusted real estate professional and attorney and make sure the I’s are dotted and T’s are crossed.

Due diligence means:

  • checking the title by requesting the ‘Certificado Simple’ from the Property Register.
  • checking the zoning and any potential restrictions on land use by requesting ‘La Linea de Fabrica’ from the Municipio.
  • checking the boundaries and ensuring the legal boundaries match the actual boundaries.
  • checking for any water or mining concessions.
Buying Ecuador property

Avenida Charles Darwin in Puerto Ayora on Santa Cruz Island, Galapagos Islands

3. Understand the Market

There are no ‘comps’ available in Ecuador. Accurate sales prices are not recorded – therefore there is no aggregate data available to help you get a sense of fair market value.

You essentially have two choices on how to go about understanding the value of property in Ecuador.

  1. Find a trusted professional who can help you understand valuation and walk you through the process.
  2. Create your own ‘database’ of comps by seeing enough properties with similar characteristics in similar areas to start to understand what constitutes value in Ecuador.

Urban Areas: If you are looking in urban areas (towns or cities) gaining a handle on valuation can be fairly straightforward. Construction and lots (small pieces of land) have a basic price per square meter depending on their characteristics and level of quality/luxury.

For example if you are looking for an apartment in a populated area, by looking at 5 apartments and calculating the price per square meter of each apartment, you will begin to understand the value of apartments in the area you are looking at. Same with lots as well as houses.

Rural Areas: For rural areas and larger pieces of land valuation can be more difficult and prices can have significantly wider margins.

Land is valued based off of traits such as: location, proximity to paved road, infrastructure such as; water, electricity, access, etc., amount of flat, quality of soil and overall utility.

Focusing on an area and checking out several properties with similar characteristics can start to give you a basic idea of price per hectare in the area you are looking at.

Once you have a handle on the market and you make an offer or come to agreement on a price, the due diligence truly begins.

Buying real estate in Ecuador

View of the city of Lloa, small town near Quito, Ecuador

4. Consider Renting Before You Buy

This tip is dependent on the personality of the individual buyer and level of commitment to Ecuador – the point is to wait to buy until you are sure that Ecuador is where you want to be. Real estate is not a liquid asset.

Editor’s note: Or at least wait to buy until you visit. It is becoming increasingly common for expats to get their residency visa and purchase property before even visiting. Here is our Expat Scouting Checklist

5. Take Your Time / Keep Digging

See as much as you can: Related to the due diligence process, it is important that you see enough property that you are confident you understand both the value and characteristics/parameters of what you are buying.

6. Work With a Professional But Oversee Your Affairs Personally

It is highly important that you work with trusted professionals in the real estate purchase process.

That being said, it is also important that you are vigilant in understanding and overseeing your affairs. Make sure you understand everything, that it makes sense and that you are comfortable with the process. If you have concerns, ask questions, double check, get second opinions and only move forward when you are convinced everything is on the level.

7. Do Business Like You Would Anywhere in the World

If you are buying real estate in Ecuador, you are doing business in a foreign country. This means that it is more important to ensure that you make good decisions than if you were operating in a place you are more familiar with.

I have seen too many mistakes made by foreigners being overly trusting, not doing there due diligence and getting railroaded.

Bottom line: Be shrewd in your affairs – pertinent advice for doing business anywhere in the world.

About Jesse Bayer: jesse bayer ecuadorJesse was a New York based real estate investor who relocated to Ecuador in 2013 and is now the Co-Founder and Managing partner at Abundant Living Ecuador, a Real Estate and Relocation Services Company based out of Loja. Jesse has prepared a free Ecuador Relocation Guide.

Read more about why Jesse decided to move to Loja, Ecuador.

Buying property in Ecuador tips

Aerial view of Quito, capital of Ecuador


Your Turn

Have a question for Jesse? Join him in the comments. Have a tip or lesson learned? Please share below.

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Meet the Author

Bryan Haines is co-editor of GringosAbroad - Ecuador's largest blog for expats and travelers. He is a travel blogger and content marketer. He is also co-founder of ClickLikeThis (GoPro tutorial blog) and Storyteller Media (content marketing for travel brands). Work with GringosAbroad.

6 comments… add one
  • Dan Apr 19, 2018, 3:16 pm

    I am in the 6th month of a two year rental. When the rental agreement was signed the landlord stated she had no intention of ever selling the house. Now she is planning to sell. Should I start ooking for a new home? What are my rights, if any?
    Thanks,

    • Jesse Apr 20, 2018, 4:28 am

      Hi, I recommend you consult with a good real estate attorney regarding your legal rights. That being said, your lease contract is a good place to start to review the terms of your agreement as it relates to access to ‘show’ the property, length of lease, etc.

  • AJ Mar 20, 2018, 2:46 pm

    We own a lot in Ecuador and wish to sell it. Any advice on this would be greatly appreciated.

  • AJ Mar 20, 2018, 2:41 pm

    We bought a lot in a development a few years ago intending to build a house and move to Ecuador. However, our plans have changed and we now wish to sell our lot. Can you give us some advice about this?

  • Rob Lamontagne Mar 15, 2018, 1:22 pm

    Great article. So other tips for buying property in Ecuador:

    1. Consider buying a used property FURNISHED! We got a great deal on a property, but had to furnish it. Appliances and furniture in Ecuador are much more expensive than in Canada or the U.S.. Having to furnish the unit was added 35% to the cost.

    2. Financing is almost impossible for a foreigner in Ecuador. Consider financing your purchase with a home equity line of credit on your principal residence in Canada or the U.S.

    3. Plan your purchase BEFORE you want to move or snowbird in Ecuador. If you buy your property 7 to 10 years BEFORE you move, you can set it up with rental property management and have it pay for itself over that time. That may sound like a long time in the planning, but most of us have an idea when we want to retire. Planning ahead can pay back big time!

    4. If you plan to move to Ecuador, then any type of accommodation can work. But if you are going to be a snowbird, spending your winters in a warmer climate, consider buying into a managed property. Empty single houses can be targets for vandalism and squatters. Gated communities and condo complexes are managed, providing security and protection for your property. In addition, many of these types of complexes have rental property management in place, to help rent out your unit when you are not there.

    Have a wonderful day!
    Rob

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