You Have to Lower Your Price!
Dear Real Estate Agents and Home Owners in Ecuador: The owners know what gringos like, so we are suggesting nicely to the owners that if you want to rent your house to gringos at higher prices than you’d better make it gringo friendly. You know, as in offering more value instead of just raising prices but not adding anything on the table. Let’s talk about this.
We wouldn’t have rented the house we’re in now for $250 per month if it would have had old cracked tiles on the counters, cracked up walls, or outdated faucets, like the kitchen in this house below. And guess what they want for this house? They want $1,200 monthly for it!! Ugh! (Click photo to enlarge.)
|This home has outdated kitchens and baths and their still asking for $1200 rent.|
What should the price be for this house, you might be wondering? Well, because it is VERY spacious at 350M and because it does have a yard, it should be priced at $500 to $600 but no more. The house is old, outdated and has awful paint colors in all the rooms. By the way, that price would reflect a 5% inflation rate from 4 years ago. Some house prices would not normally rise with inflation if the house is not in an acceptable condition. Why would it?
Because it’s in an area the gringos want to live in there could be a dreamy perception that some naïve gringo will rent it for $1,200. I suppose anything is possible especially if you’re from major u.s. metro areas, but don’t bring your dog. The ad says “no dogs”!
Moving on to the next bad deal!
Older Homes Need to be Priced Right
These older homes like this one below, used to go for $220 to $300 back in the day. And look, it’s now $500 and they’re asking for a guarantee too!! They assume the gringos will pay it; well, will you?
It’s funny that prior to the Gringo influx after the online hype, they never asked for a guarantee with the Ecuadorians but now that the “rich gringos” have come, they’re asking for a 2nd rent. Why not a third rent, or a fourth rent, heck, why not a whole year’s rent up front like they do in South Korea? Why stop anywhere? If the major metro u.s. residents financial condition is the driver of these foreign real estate markets, then why not? They can afford it, right?
|This Cuenca older home should be $250|
Would a gringo really pay $500 for this old house and $1000 just to get into it? (Click photo to see this old house).
You know, we’re just saying, the prices for many homes today in Cuenca have lost much of their value because the prices are just too high for old and outdated houses!
The older 3 and 4 bedroom homes still need to be priced at the $250 to $300 price range, unless they are actually updated to reflect modern times. Newer homes that offer green spaces and near everything can and should go for $350 to $500 depending on construction size. Bigger homes should be priced higher than the smaller homes.
It’s ALL about VALUE in a RENTAL: as we’ve touched on above, value as it relates to the local market. The Per Capita GDP household income for all of Ecuador for 2016 is still less than a thousand per month. Most parts of Ecuador outside of Cuenca would be much lower than that. So, think about what you’re doing to your neighbors when you come down here, and compare rental prices to Florida, New York, Chicago, California, etc. etc. When was the last time you looked for a rental somewhere outside these very expensive u.s. areas?
Until we write again...
Here are a few related articles you might find interesting.
We're an Expat Family of Five, Living Frugal, Healthy and Happy Abroad. We live in Cuenca, Ecuador and travel the Ecuador coast whenever we get a chance. We just adventured throughout the country of Panama for five weeks! Come along and enjoy some of our experiences with us!