Archive for January, 2012

Q. and A. Transferring Money into Ecuador

Sunday, January 29th, 2012

Q. Hello Michael,

We are moving to Ecuador in about 16 months (counting the days). We are trying to figure things out here to prepare for our move.

The coming banking laws appear to be a concern. How do expats get the money from their home sale into Ecuador? Do the banks deal with cashier's checks from the US or should funds be wired?

Must we set up an Ecuadorian account first or are there banks in the States that also have a presence there? If we need an account down there, what is required to open an account?

How worthwhile is it to move household goods?

Thank you for your help,

Jorge


A. Hello Jorge,

 
        According to a recent publication by the IRS the implementation date for the 30% withholding tax has been delayed and won't affect your planned move in 2013.

Currently wire transfer fees are very low however the cheapest way to get money into Ecuador is to open up a bank account down here and deposit a check from the U.S. It will take about 10 business days for the check to clear but 100% of the funds will be available when it does. It can be a personal check, business check, whatever.

Contrary to popular belief opening a bank account down here is not necessary in order to buy a property, nevertheless it is easy for to open savings accounts here, even for foreigners, and so they often do so for sake of future convenience. Here is a link to the U.S. branch of one of Ecuador's largest banks. www.pichinchamiami.com

Don't know what to tell you on the household goods. It seems to me like most people ship containers in for sentimental reasons more than anything else. It only costs about $6,000 to fully furnish a three bedroom apartment with all new everything if you buy locally in Cuenca.

A lot can happen in 16 months! Arbeit macht frei

Q. and A. Imminent Domain

Sunday, January 29th, 2012

Q. Hi Michael,

I hope you and family are doing well.

I have a question that I need your help with, if you know. When one buys property within the city of Cuenca, say 10 hectareas, I am told the city "appropriates" a certain percentage for their own use to make "public areas". Do you know anything about this? Specifically, do you know what percentage they take and if it's negotiable?

thanks in advance for your help,

bob


A. Hi Bob,

 
        What you are asking does not make much sense as there are no 25 acre lots in the city of Cuenca.  The city does appropriate land for widening streets and sidewalks etc. but that is not based on any percentage.  There are imminent domain laws which can take all the property for special projects such as the new highway. The only other two threats to the land that I can think of would be 1. The idea of a new International airport for Cuenca that several administrations have tried to push through due to the infeasibility of expanding the existing airport and 2. A law that allows the Ecuadorian government to seize undeveloped rural land. The government rarely does this and they usually don't bother with places as small as 10 Hectors. If you have a high-flow spring on the property then it is has likely already been appropriated by the city or county for providing drinking water to neighbors Often rural properties have easements for irrigation water canals or for pipes for drinking water or road access for neighbors. Unlike in the U.S. all property owners here have the right to vehicle access to their property and here people lose land much more often due to that than due to anything else. There is a degree of negotiability in imminent domain related matters however when Etapa needs more electrical generating capacity and you have a house on the river it is going to end up in the river whether they pay you what it's worth or not. A property owner I know in Paute got them up from $18,000 to $20,000 for reimbursement of lost riverfront property (no house involved). In the end he decided to take the $20,000 since if they had been unable to come to an agreement then he would have not received any reimbursement whatsoever for the flooded land. As is the case in most countries your voluntary compliance is mandatory. I believe that the initial value offered for the now flooded land was fair. Fortunately the owner was honest enough to wait for the river to rise before listing the property but this is not always the case.
(more…)

Inflated Prices

Tuesday, January 24th, 2012

Looking at different brands of cereals in stores I have only been able to find what I call inflated pricing. I can say with certainty that the prices are inflated because an organization that promotes retiring overseas told me that food in Ecuador was cheap, and they never lie. They even have sent me pictures of $1.80 boxes of cereal so I know that those prices are still available if you know where to look.

Now that I am here in the local supermarkets I see prices as high as $4.50 a box for small boxes of cereal! I was able to find some cereals that cost as low as $2.00 but they were much smaller than I thought they should be and the quality seemed very poor. Some were about to expire and were therefore discounted. There was nothing I could find that I would even consider eating for under $2.50 and the stuff that I really wanted cost a lot more.
(more…)

Are Prices Going Up?

Friday, January 6th, 2012

What do you tell somebody who asks you about Real Estate prices in Cuenca?

You can tell them that prices are going up, everybody agrees on that, but how much are they going up? 
 

I hesitate to try to predict the future but what I can do is give you accurate information about where things are at today and where they have been over the last few years.  
 
 
 

PRICES HAVE BEEN GOING UP 
 

Our best metric for determining changes in price over time is the actual selling prices of newly constructed apartments. Based on that metric prices have gone up about 12% in 2009, 12% in 2010, and 16% in 2011. 
 

Note: Some people try to add these percentages on to the price that they paid for their property and then expect that much more when they sell. These are price changes for NEW construction and your place is no longer new. Also the price you paid and what your place was worth when you bought it are not necessarily the same figure. 
 
 
(more…)

Is small town rural Ecuador for you?

Tuesday, January 3rd, 2012

The decision between rural and city living is got to be the most difficult one that most people face once they have chosen Ecuador as their destination. There are two key things that keep coming up again and again which seem to make the difference between living happy in a rural property and being miserable, well… maybe three things.

When I say rural property I mean Vilcabamba, Cotacachi, any of the small coastal towns, or any place more than 15 minutes from a decent sized city. Even though these places are very different from one another and people fall in love with them for different reasons there are a few similarities. For most people there ability (or lack thereof) to enjoy living in a remote location boils down to the following things:
(more…)