Cuenca Versus Granada for Retirement

How to decide which affordable city is the better retirement choice.

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Comparing different retirement destinations is the key to narrowing down your preferences among all of the world's choices. Looking at the world from the perspective of someone shopping for a super-affordable retirement option, two cities jump out: Cuenca, Ecuador and Granada, Nicaragua. Which might be the better choice? Let’s begin by considering the similarities.

Both Cuenca and Granada are beautiful and authentic Spanish-colonial cities, founded in the 1500s. In both cases the cost of living is about as low as you'll find anywhere. You could get by frugally in either of these cities on less than $1,000 per month or live a comfortable lifestyle by North American standards for around $1,500 a month or so.

Real estate in both cities trades hands for well under the magic $1,000 per square meter (about $100 per square foot) mark, putting both of these cities in bargain basement territory for property. Transaction costs for the purchase of real estate are low in both Ecuador and Nicaragua, as well.

Both cities are in third world countries, with all of the attendant institutional inefficiencies, corruption and less-than-perfect infrastructure maintenance. On the other hand, minimal government can have advantages, including low levels of government intrusion, low taxes and few rules and regulations.

Both cities are relatively easy to access from the United States. Specifically, Cuenca has a convenient international airport right in town, but virtually all flights to the U.S. connect through Quito or Guayaquil. Granada is served by the Managua airport, about one hour away, which also has good U.S. connections. Flight time from Managua to Miami is about two hours.

Cuenca and Granada are home to sizeable, thriving expat communities of North Americans. There are many more expats in Cuenca than in smaller Granada, but the ratio of expats to locals is comparable in both places. Residency is easy to establish in both countries, with low income and investment requirements.

That's where the similarities end.

Cuenca is a large city of more than 400,000 people. It’s more than four times the size of Granada. So, Cuenca has the edge for big-city amenities, like theater, nightlife and restaurants. It also has a new, upscale shopping mall and lots of modern health care facilities. Granada, by comparison, has more of a small town, close-knit feel, where everyone seems to know everyone.

Cuenca is located high in the Andes, at 8,200 feet above sea level. It offers spring-like weather, with highs rarely above the mid-70s and little seasonal variation. Granada, on the other hand, is warm all the time, with highs in the 80s to low 90s year round.

Granada is on the shores of one of the world's largest lakes, meaning swimming and boating opportunities are close at hand. You can even purchase your own private lake island. Nicaragua's Pacific beaches are less than two hours away. In Cuenca, the nearest beaches are almost three hours away, in Machala, and the nearest nice beach is over four hours away in Playas or Salinas.

Shopping for real estate is straightforward in both Cuenca and Granada, as both cities offer lots of inventory and established real estate agencies with English-speaking agents. One difference between the two cities when it comes to real estate is the kind of inventory available.

In Granada you find a great selection of low cost Spanish-colonial homes. Their center courtyards are typically open-air and often contain swimming pools, something that is unusual in Latin America. Also, the colonials in Granada tend to be relatively small, meaning they can be ideal for a retiree or a retired couple.

Cuenca has colonials, too, but they tend to be larger and expensive. Many are old homes for large families of 700 square meters or more, which is a lot for a retired single or couple to take on. On the other hand, Cuenca excels with its newer construction, offering a big selection of modern condos at reasonable prices. Living in Cuenca, you can enjoy the old world character of the historic center but live in a modern house or condo in first world comfort as near as a few blocks away.

Comparing Cuenca and Granada, there's really no winner, as is the case with many city pairs. The key is to understand your own priorities.

Kathleen Peddicord is the founder of the Live and Invest Overseas publishing group. With more than 28 years experience covering this beat, Kathleen reports daily on current opportunities for living, retiring and investing overseas in her free e-letter. Her newest book, How To Buy Real Estate Overseas, published by Wiley & Sons, is the culmination of decades of personal experience living and investing around the world.