Analysis Of Ecuador 's Housing And Tourism Industry

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Ecuador is well known for its beauty and has made a name for its self to be one of the best places for retirees to buy properties. There is a wide variety of selection whether you want to live in the coast, the mountains or in one of Ecuador’s bustling cities. The housing market in Ecuador is frequently proclaimed as one of the best and cheapest to retire in and has been becoming more and more popular for the last five years, with home prices appreciating annually by 10 to 12 percent. Therefore we have chosen to enter Ecuador’s housing and tourism industry. We believe this is a good time to enter the market because of low cost properties with potential for high growth. As potential buyers seek to buy their get away home Ecuador creates a…show more content…
Which would produce a 36% ROI after a period of 5-10 years. Compared to a Luxury property that would sell for somewhere around 500,000 USD with no renovation cost which would generate a ROI of almost 200% if resold at 1.5 million USD. It is estimated that after 5-10 years (possibly earlier) of letting these properties appreciate it would be more efficient to buy larger more expensive properties than many small cheaper properties. In order to get the same results with buying cheaper less expensive properties you would have to have very rapid sales or you would have to sell at a price which would be sacrificing desired returns. While it is hard to generalize, as every transaction is different - typically the agents commission is 5% of the agreed up price, and all other costs (legal fees and taxes) are typically between $750 and $1,500 for a regular condo or house purchase. Annual property taxes in Ecuador are based on "Assessed Value" and not on the actual purchase amount. The assessed value can be anywhere from 5% to 50% of the real value of the property depending on where the property is located. EX. if we purchase a property for $100,000 and the assessed value is $30,000, the maximum property tax would be $300 per year. Property taxes are due on January first of each year, and are not due until December 31
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