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Expat Categories

An Ecuador Line-up: Just the Usual Suspects

For those of you glancing at the headline and expecting a juicy story, replete with gossip about who did what, when and where…well, you’re going to be somewhat disappointed, though hopefully, not too much.  This is less a report about standing behind a two-way mirror and identifying “the other guy”, than it is a report about gazing in the mirror and best identifying yourself.  Specifically, identifying exactly what type of expat category best suits you and how that may impact your options and consideration down the road.  Don’t see yourself in any of our six “expat categories”?  Well, that’s perfectly ok.  We don’t intend to pigeonhole anybody, let alone everybody.  You march to your own drummer, but maybe hints from the following categories can capture your imagination and lead to your own path of enlightenment.

I  have been doing the global real estate thing for almost 30 years.  You start to see patterns.  They might not apply to all, but generally, the majority of expats, fall into six (6) predominant categories:

The Retiree Expat:  Yes…we know this person all too well.  He is the predominant expat the media talks about.  Hard not to know them, really.  With the largest generational movement of global wealth well in process, the retiree is certainly at the center of epic economic times.  Part of that is the wanderlust to have an adventure and explore a new place.  However, not all retirees easily fit a common theme.

Some retirees are moving overseas, with Ecuador certainly a prime destination, because they want to enjoy their years of economic success, in a place filled with wonder, diversity, excitement and ideal weather.  However, other retirees are moving overseas, to value conscious countries like Ecuador, not so much to burn through their accumulated wealth, but to preserve it.  This proves that even within a general “expat category”, variances persist.

Still, there is a commonality of theme. Most retiree expats want some stability when they reach their destination.  They may be willing to travel about considerably, but they generally do not want to be hopping from place-to-place indefinitely.  They want to set roots in their new homeland and experience the world from a “local’s perspective”.

This generally means that a retiree expat really needs to do their homework, when selecting a new place to call “home”.  Several “boots on the ground” visits are in order.  Rome wasn’t built in a day, and a “new home” isn’t discovered in one, either.

Additionally, the retiree expat is likely a home buyer in his new adopted land.  Unless you have been a lifelong renter and simply prefer that lifestyle, enjoying your accumulated wealth to the fullest or preserving it all the same, a new home is an excellent vehicle to attain either.  That means the retiree expat not only has to double-down on doing their homework, since they will be investing considerable funds in their new homeland, but they will also need to seek out experienced professionals to assist them with their planning.  A conversation with a local taxi driver, bartender or inn-keeper might be colorful and filled with alleged lore, but a true professional knows their trade sans affectation and hyperbole.

Remember, if you are a retiree expat, regardless of the specifics, you have worked hard to enjoy and preserve your retirement nest egg.  Invest equal care and time in selecting the right locale for you.

The Adventurer Expat:  Let’s get this straight from the get-go.  Indiana Jones has nothing on you.  You are a thrill-seeker, an explorer, an adventurer and “risk” isn’t just a board game, but a way of life for you.  You seek out largely undiscovered countries like Ecuador, precisely because not everyone will…not everyone can.

The adventurer expat is generally a rugged individualist.  They might be reading this report as they paradrop over desert terrain, just because it was a “slow week”.  Candidly, they aren’t likely to listen much to what I have to say.  Still, a few observations are in order.

The adventurer expat may be my choice to lead an expedition through Ecuador’s Amazonian rainforest, but, sadly, their confidence and skill set can often betray them as expats.  They are prone to want to “go it alone” and eschew advice.  Often, the adventurer expat is that guy who bought the 20 acres of land in the remote coastal location, without first discovering that the land was titled as “Comuna” property, a term in Ecuador which can best be described as what a USA resident would consider “Indian reservation land”.  In Ecuador, unless various legal requirements are met, you do not own clear title, if you are in possession of such lands.  All expats should seriously consider availing themselves of local professional assistance, no matter how rugged and independent they might be.

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However, the adventurer expat does also tend to enjoy certain advantages.  They are one of the most likely groups to be flexible as to the exact location where they settle.  Such flexibility often brings with it the ability to scour for slightly more remote, but much better priced, real estate.  The adventurer expat can often reap the financial rewards of those better values.  Also, my experience suggests that the adventurer expat is willing to more readily explore unique business opportunities, or to be the first to start a local business, often with a strong track record of success, provided they have properly sought out the aforementioned local professional help.

Also, the adventurer expat has a very high probability of local cultural assimilation.  They seldom are phased by confronting “the foreign” and will generally make strong efforts to learn the local language, while resisting any discomfort through the “linguistic learning curve” period.  Actually, this is an almost ideal mix.

Overall, the adventurer expat tends to make a good candidate for relocation, provided they learn to somewhat rely on others to make the transition.  Remember, even Indiana Jones had a side-kick…or two.

The Classic Traveler Expat:  Like the retiree expat, the classic traveler expat may be willing to travel about considerably, but they generally want a home base from which to catapult to their global adventures.  The security of a place to call home becomes a great respite, from the road-warrior adventures of the “reckless traveler” lifestyle.

However, unlike the retiree, the classic traveler expat is very likely to have visited his “expat destination of choice” at least once, if not, likely, several times.  In fact, they might have a local familiarity of their new destination of choice, bordering on the native population’s knowledge, if they have been frequent past visitors.  This can both be a great asset or hinderance, as they approach life as an expat.

For example, the classic traveler, more than any expat except maybe the adventurer expat, tends to “go it on their own”.  They know the place as, often, frequent tourists and they don’t need anyone’s help.  Trust me…one thing is visiting a place, whole other experience living there full-time.  Nothing takes the place of every day “boots on the ground” experience.  So, the classic traveler expat can easily wind up with that “great deal” that maybe, upon further market knowledge, turns out not to be so “great”.

However, the classic traveller’s likely area knowledge generally translates into the ability to act more quickly, more nimbly and with personal area insight as a guide.  Often, they can get an early jump on a good real estate deal, timely reservations at the best restaurants, or first choice for that great “yacht opportunity”. They are also most likely to know the local area industry professionals, further enhancing their innate local market advantages.

Ultimately, the one factor that most defines the classic traveler expat is that they generally want the finer things in life.  The world is their oyster and while they want the “adventure”, they generally don’t want to forsake the comforts along the way.  This ability to pursue their dreams and the finer things can certainly facilitate their experience as an expat, but it also makes them vulnerable to hucksters (and every market has them), as well as limits their geographic options when purchasing real estate.  For example, in Ecuador, someone that wants both the adventure and the conveniences is really limited to Quito, Guayaquil, Cuenca, Manta and Salinas.  Few other areas truly apply.  If the classic traveler expat is not careful, their usual ability to “buy anywhere”, may find them owning the perfect home, in the wrong locale.  Caveat emptor !

The Lone Wolf Expat:  Keep in mind that wolves can travel in packs, so sometimes that “lone wolf” can be accompanied by family.  However, most times, our lone wolf expat is currently a single individual, in search of peace, quiet, reflection and, yes, solitude.  At least solitude to the extent that they can select when to “mix and mingle” and when to remain more reserved.

Most lone wolf expats, even when bringing family in tow, tend to be in the process of distancing themselves from their previous lifestyle.  A previous lifestyle, more often than not, involving either a hectic business pace or a big city environment – often both!  In either case, they seldom are drawn to the “big city” lifestyle.  As such, cities like Quito and Guayaquil in Ecuador, for example, are seldom targeted locales for the lone wolf.  In fact, even more mid-sized cities such as Cuenca, Manta and Machala are often avoided.

No, the lone wolf expat usually wants a tract of land, where he can live peacefully, maybe even farming the soil for a “partial subsistence off the land” lifestyle.  They are drawn to more remote areas, such as the hillsides of Olón (not oceanfront), the more remote parts of Esmeraldas Province, such as Sua, or the Pedernales region.  They may also be attracted to charming small towns like Cotacachi.

In most cases, the lone wolf expat wants to adapt a “local’s lifestyle” often eschewing contact with fellow expats.  This can be one of the challenges for the lone wolf expat.  Unless they have spent plenty of time of on the ground experience in Ecuador, it may be easy to gravitate to attractive areas that are somewhat remote, with plenty of charm, but alas often filled with a large expat population, on a per capita basis.  So, while “on paper”, a locale like Cotacachi or Vilcabamba, the latter nestled in the Valley of Longevity, may seem ideal for the lone wolf expat, they might well be surprised to find themselves possibly surrounded by “Gringos”, unless they choose their exact location wisely.

Most lone wolf expats, it has been my experience, tend to do quite a bit of advance research.  Perhaps, this is a result of years of pent up desire to “hit the road” and find the land of tranquility.  So, mostly, the lone wolf rends to be an informed lot.  However, quite often, the very things in life that demanded the hectic pace have left the lone wolf with little time to travel.  As such, the lone wolf expat often offers the unique dichotomy of being well familiar with his target location, but never having stepped foot on its soil.  This can mean that some lone wolfs often forget that no matter how thorough their advance research is, it is no substitute for time in country. This leaves them vulnerable to perceptions that they think they know and understand their new found country much better than reality suggests.  As such, lone wolf expats, especially those sans family, tend to have one of the highest “failure rates” as permanent expats.  The well researched perception, often does not match the “in person” reality.  My recommendation to any and all “lone wolves”…spend some time in country, before finalizing any decision.

The Hedonist Expat:  If the classic traveler expat craves quality and the lone wolf craves solitude, the hedonist expat is in search of freedom and a care-free lifestyle.  It isn’t about measuring success by wealth, it is about measuring the wealth of a lifetime, by how it is lived and enjoyed.  The hedonist does not seek solitude, they seek the companionship and camaraderie of other like-minded individuals.

If the hedonist shares any trait with other expats, it might be their propensity to shun densely populated, hustle and bustle, city centers like the lone wolf expat.  Few hedonist expats are drawn to cities like Guayaquil in Ecuador, for example.  Yes, the city offers an array of activities and a very diverse population which to enjoy, but as the commercial epicenter of the nation, the pressure-cooker, fast-paced urban lifestyle is seldom what the hedonist expat seeks.

In Ecuador, for example, hedonist expats gravitate towards the resort beach towns, such as Salinas, or the oceanfront areas surrounding the town of Montañita.  Inland, they prefer locales such as Vilcabamba.  They want enough activities to stave off boredom, but not so much activity that one feels like they are on a weekend excursion to New York City.

Most hedonist expats will dive right into the local customs and culture, but also want a reasonable supply of nearby expats, for that sense of instant camaraderie and understanding. They want to explore their new land as part of the adventure, but also want the “instant friends” option that more readily comes with sharing a common language.

My experience, perhaps surprising to some, is that the hedonist makes for a good and successful expat.  Their generally relaxed, go with flow and “enjoy the moment” demeanor, means they tend to take life and the inevitable challenges that come from living in a foreign land, all in good-natured stride.  This makes them very adaptable and they tend to be readily accepted by the local population.

If there is a challenge for the hedonist expat, it can often be found in underestimating the financial costs of life abroad, even in a relatively excellent value country such as Ecuador.  As a general rule, and quite respectfully, most hedonist expats are fairy unfamiliar with their new country of choice, except on the rare occasions where they have spent prior time in country.  As such, their search for fun, adventure and relaxation, often overwhelms their propensity for financial analysis.

This can be especially true of those hedonists who choose to purchase real estate, in their new adoptive land.  Often such decisions are made more on emotion and the “feel of the place”, rather than on considerations of future value and financial feasibility.  Usually, if you find a guy walking down the street, talking to every third person they meet about this “must sell now, great home they own”, even money says they are a hedonist expat, generally on their way out the door.  Perhaps more than any other “expat category”, the hedonist expat really needs to surround himself with trusted and informed local professionals, who aren’t afraid ”to call it, like they see it”.

The Perpetual Traveler Expat:  Think of this expat as the  “classic traveler” expat on steroids.  They not only have globe-trotted about the world, but are less inclined to want to sprout roots anywhere…ever.  They are likely in any country only to spend 3-4 months there per year and then off to the next locale, until next year…maybe.

Still, depending on their individual perspectives, some of these perpetual travelers (PTs) will want to establish temporary roots, via permanent residency options.  They do become expats, just fleeting ones.  Their rationale is usually to ensure re-entry into the country at a future date.  Therefore, at times, you can find a PT expat, on a self-imposed exile sabbatical, staying put 6 months, a year…maybe even two years, in order to qualify for permanent residency status, making them a true expat.  Admittedly, this is rare, but it happens.

Of all expat categories, the PT is the one expat who should never…ever…buy real estate in a foreign land. Stick to renting.  It provides maximum flexibility and ultimate freedom.  There is nothing to tie you down…just get up and go, worry free.  This, however, also means that the PT expat has to be more creative, if they do want to establish permanent residency, since one of the easiest ways, in many countries, is through the purchase of real estate or a local area business enterprise, neither which suits the PT expat lifestyle.

Often I hear suggestions promoting a “portable business” like “web-based publishing” or “website development” work as ideal professions for the PT expat.  While these type of portable business ventures have the capacity to prove lucrative and fund the PT lifestyle, they seldom satisfy the tangible business investment criteria for true permanent residency status and, hence, true expat status – yet another reason why most PTs never truly become real expats.

If the PT Expat is successful, it usually begins with access to a pension income or social security style benefits.  They can generally be readily converted into permanent residency status, once the future expat completes their “time in country” requirements, which can vary dramatically from nation to nation.  Here in Ecuador, one has to live for two continuous years, with not more than 90 days out of country, per each year (180 total over 2 years).  Pension income requirements, currently, are only $800/month for a single individual, in Ecuador.  Each additional family member adds another $100/month.

Overall, the PT is, truthfully, barely and seldom a genuine expat.  However, the crossover contingent exists and for them. We offer only the advice of preparing carefully for any qualifying permanent residency income criteria and a cautionary tale that such a lifestyle should be “free and easy” sans being weighted down by the ownership of real estate.  Stick to a portfolio of more portable investments and consult a professional specializing in your alternative investment field of choice.

In conclusion, whatever expat category you identify with, or maybe none at all, make the expat experience an adventure, filed with excitement and the courage to immerse yourself in a new culture.  Begin your journey as soon as feasible, for we are blessed with only a limited time.  Whatever expat category suits you, whatever your destination and whatever the newly desired lifestyle of your choosing, let the journey begin, but also remember…let’s be careful, there’s jungle out there !

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