Ecuador is becoming a popular destination for expats due to its low living costs. The real estate market is one particularly important factor that attracts foreigners to this country. Housing prices can be anywhere between 50% and 100% cheaper than Panama, Costa Rica, the US, and Europe. While many expats prefer to settle down in Cuenca, smaller villages such as Vilcabamba and Cotacachi in the north are gaining a lot of popularity, along with some of the areas on the Pacific Coast, particularly from Manta to Canoa.Buying a house
Locating a suitable property that is on sale is actually more difficult than purchasing it, because the housing market is still quite disorganized in Ecuador. Established real estate agencies are still uncommon in this country. Most of the locals rely on fliers, signs and listings when it comes to buying or selling houses. Fortunately, property owners in the cities have now started using online resources to look for potential buyers.
Once you find a house that you would like to purchase, you will need to get an initial quote from the seller. It is normal for the locals to quote higher prices if they know that the buyer is an expat. You could avoid this problem by engaging an Ecuadorian, Spanish-speaking attorney or estate agent. Unlike the US and the UK, sellers and agents in this country are not bound by any laws that dictate disclosure of all potential problems with the property. You will therefore need to check the place several times and ensure that it is up to your expectations before the deal is closed.
There are hardly any restrictions on the purchase of property for expats; when it comes to owning real estate, Ecuadorians and foreigners are on equal footing. You don’t have to be a resident to purchase property either. In fact, if your property is valued at around US$ 30,000, you could apply for Ecuadorian residency as an Investor.
Building a house
Many people believe it is more economical to construct a house on a piece of land, rather than purchasing a plot of land with property. This option also gives them the choice of getting the kind of house they want, as per their requirements.
That said, those who have no construction experience should avoid getting their house built from the ground up. If you choose to build a house, you should either be around to monitor the progress or hire an experienced architect for the project, so that it is completed within a fair amount of time. This will also give you the chance to spot any potential problems before they become insurmountable. Builders and workers can make errors during the construction phase, and unlike the US and Europe, house owners in Ecuador have to pay the architect and workers to fix any mistakes made. Even those who “guarantee” proper work won’t rectify the problems you spot unless you are willing to pay extra.
When you opt for building a house, it is expected that you will buy and deliver all the raw materials required, which includes the tools, wires, cement, bricks and so on. Unfortunately, most of the workers assume that the owners know what is required and won’t give you a proper list beforehand. You could end up making several trips a day to the hardware store while the workers sit around, waiting for you to get the building material. Also, you will need to pay cash for everything you purchase. Buying the material by credit or debit card will increase the cost by 4% to 10%.
Getting a building permit in Ecuador is a complicated procedure and it is best to hire a local who can guide you through the formalities.
In Ecuador, you could build a residential structure for as low as US$ 100 per square foot, which includes the land, the design, raw materials and labor costs. The building permits and legal fees cost extra. However, this is an approximate figure and could increase significantly, depending upon the material you decide to use.
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