El Conquistqdor Francisco de Orellana

El Conquistqdor Francisco de Orellana
The Conquistador who put the Amazaon baisn "on the map"....Francisco Orellana

Sunday, December 22, 2013

Property holding costs in Ecuador: Not what you'd expect

I get it all the time...

"Well nowadays I can also buy a $40,000 property in Waco, Texas, what'the big deal about Ecuador?"

OK, well, one thing is the holding costs.

Lets take a look at my 4 bedroom, 3 bath house on the coast near Montanita.  I currently rent it out.

I pay...

$0 for insurance (with so much concrete construction home insurance is not common).
$0 for condo or association fees (not in gated community)
$102 a year in property taxes
$7 electric bill last month (with one single person living on the property full time.)
$4 water bill last month
$2.50 gas (bought one tank of gas, this is also subsidized by the government)

Now lets compare this to a 2 bedroom condo in my home state of Montana, USA currently valued around $180,000...
$1200 annual property taxes 
$583 every 3 months association fees.  
electricity $80 a month (varies)
water $125 every 3 months 
$180 annual insurance 
gas $250 (varies)

How about a 2 bedroom house in Montana valued around $350-400k...

$3400 annual property taxes 
$1200 annual homeowners insurance
$0 association fees (not in gated community)
electricity/gas $300 a month in winter 
$25/month garbage collection

Now, lets throw in the extra cost of my Ecuador 'property management' because I do not live nearby (I live in Quito) and I rent it out short term as a vacation rental.
$20 a month to caretaker who visits property twice a week and lets me know if there are any problems, waters grass once a week and takes out the garbage.
$5 each time the caretaker has to go and turn in key or recover key from an entering or exiting guest.
$10 for each cleaning between guests.

The caretaker also is in charge for paying the energy bills, and does NOT live on the property.  All guests prepay online, I do all the marketing myself.  

Holding costs, a big reason to consider Ecuador.

Saludos until next time,

Domenick Buonamici
Quito Airport Suites

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