Ecuador is the world’s cheapest place to retire. You could live in this beautiful, safe country on as little as $660 per month if you own your own home or on as little as $1,240 a month if you rent.

World’s second-cheapest place to retire overseas? Uruguay , where you could live comfortably on $1,038 per month if you purchase a home, on $1,555 if you choose instead to rent one.

In Ecuador , Cuenca is the foreign retiree’s best option. It’s not the cheapest place to live in this country, but it offers the best quality of life for the money.

At just over 400,000 people, Cuenca is the perfect size. It’s small enough so that you always see someone you know when walking around town and you know how to get around, how to get things done. What’s more, people know and remember you, which makes you feel at home and part of the community.

And the colonial architecture, Andean markets, and heritage of the city make you feel that you’re really experiencing another country and a rich culture.

Our budget is for two people, and you can read it in full details here. 
 

Furthermore, remember that Ecuador uses the U.S. dollar. So, while the dollar’s decline is causing expat prices to rise in neighboring countries, Ecuador remains stable for dollar-holders.

Uruguay is home to the world’s other most affordable retirement cities. If you’re retiring to Uruguay on a budget, the ideal location depends on whether you’re looking for a seaside or a city lifestyle.

Best choice for coastal living is Atlantida.

A small town with a permanent population of just over 3,500, Atlantida swells to more than 19,000 when the summertime visitors arrive. Its shady, tree-lined streets and large, older homes have the feel of a year-round home town, rather than a vacation resort. The calm, crescent-shaped cove is ringed with a sandy beach, and its seaside park is a frequent destination for both residents and visitors from Montevideo .

If city living is more your style, Salto is the place. Located about 300 miles up-river from Montevideo , Salto is like a mini version of Montevideo , the country’s capital city. Just about every major store that has a branch in Montevideo has one in Salto, as well. What Salto doesn’t have is Montevideo ’s crime, property prices, or tax rates. You’ll enjoy a markedly lower cost of living.

As Uruguay ’s second-largest city, with just over 100,000 people, Salto is one of the few cities in the country that you never have to leave if you don’t want to. Its commercial district, entertainment scene, restaurants, and municipal services should provide everything you’d need and want without having to own a car.

For a complete and fully itemized budget of monthly expenses for a couple living in both these cities, read here.

Live and Invest Overseas (www.liveandinvestoverseas.com) is dedicated to uncovering the world’s best opportunities for living, retiring, investing, and owning real estate. Publisher Kathleen Peddicord, with more than 22 years experience covering this beat, and her global network of in-country connections are on the move continuously in search of opportunity. Their from-the-scene dispatches, tips, recommendations, discoveries, and insights are delivered every Tuesday to readers of their free e-letter service, the “Overseas Opportunity Letter.”

“I was putting what little money I had in Ocean Frontage, for the sole reason that there was only so much of it and no more, and that they wasent making anymore..."

-- Will Rogers, April 13, 1930

Will Roger’s investment strategy is as sound today as it was nearly 80 years ago. The trouble is, in the intervening eight decades, people have been aggressively buying up what beachfront property there is. What’s left for you?

The truth is, it’s harder and harder to find coastline worth owning for sale at prices worth paying. However, the editors of Live and Invest Overseas have identified six places where the beachfront is both special and under-valued:

1. Panama . You’re likely familiar with the many reasons why Panama remains one of the best places to invest your real estate dollars (your retirement and second-home dollars, too).

(If you’d like to remind yourself what’s so hot about this country, take a look here: http://www.liveandinvestoverseas.com/hotopportunities/panama.html

The trouble is, Panama hardly qualifies any longer as undiscovered. Could its beachfront possibly, therefore, be under-valued?

Yes, in particular regions. Not within easy commuting distance of the city. These weekend-getaway beaches have been climbing fast in value, trading hands back and forth among both local and foreign buyers for more than a dozen years.

And not in Bocas del Toro, on the Caribbean , where, again, the gringo developers, agents, and buyers have created a bubble for themselves.

Veraguas. That’s the place to look right now. This large province about three hours west of Panama City hides the best Pacific coast buys in all Central America .

Plus, remember, Panama uses the U.S. dollar as its currency, meaning no exchange risk.

2. Dominican Republic . Cheapest Caribbean beachfront you can buy today. I’m talking quintessential beachfront of the variety that, for many, defines the word. Soft white sand bordering gently lapping emerald water. The same white sand and emerald water you find at St. Lucia or St. Barts, only way more appealingly priced, be you a would-be second-home owner or a speculator looking to flip quick.

The best opportunities are on the Samana Peninsula . The spotlight is on Cap Cana (where The Donald is developing Trump at Cap Cana). That’s why you want to focus your attention northwest (to Samana) instead. This lush, green region boasts more than 20 miles of white-sand coast.

Look specifically around Las Terrenas, today little more than a small fishing village—which is part of the attraction. The expat community here of 2,500 is growing quickly. You can buy a condo right on the beach for $2,600 per square meter or one with an ocean view for $2,100 per square meter. Rentals yields are above average, at 6% to 8% net per year.

Undeveloped beachfront is remarkably affordable. Where else in the Caribbean could you buy prime white sand with services for as little as $40 a square meter? Hillside lots start as low as $20 a square meter.

3. Uruguay . Like both Panama and the Dominican Republic , Uruguay ’s beachfront property market is not primarily dependent on American buyers, an important point to keep in mind if you’re shopping with an investment agenda today.

In Uruguay , we have two specific recommendations, the first for investment, the second for part-time or retirement living.

First, the investment pick: Rocha province. Tourists and buyers, both, have focused to date on Punta del Este in neighboring Maldonado province. Rocha, to the northeast, has equally attractive beaches. And, as Punta del Este and its surrounding resorts expand, it’s these Rocha province beaches to the north that will benefit from the spillover. Furthermore, for Brazilians (who make up a fair part of the Uruguay market) driving south to Uruguay ’s safe, cheap beaches, Rocha means less travel time.

Second, the lifestyle play: Pirapolis, with its beautiful bay, quaint rambla (or boardwalk), café society, grand old hotels and casino, and first-class marina. Real estate values in Pirapolis will enjoy appreciation, we believe, in coming years; still, the attraction here, really, is the lifestyle. This is a safe, relaxed, friendly place, a throwback to small-town America a half-century ago.

Pirapolis is also home to the only private residential community of its kind in the entire country, the current project of friend David James . David’s Sugar Loaf Ocean Club and Spa is not on the ocean, but every resident will enjoy sparkling ocean views, as well as high-end services and amenities…at very un-high-end prices.

4. Ecuador . Ecuador ’s coastal market, specifically around Salinas , Montanita/Olom, and Manta, is on fire. This is a place to shop for instant investment gratification. Properties, our on-the-scene contact reports, are bought and then flipped the following month for 20%, 30%, even 50% profit and more.

Right…that level of activity rings alarm bells. Keep your wits about you.

In Salinas , buy a condo, either finished or pre-construction, for both capital appreciation and rental return.

If you’ve got a little more patience, look to more remote coastal regions, where it’s possible to buy for as little as $3 to $5 per square meter. This translates to $30,000 to $50,000 for two-and-a-half acres of beachfront property. Beat that.

Remember, though, this is a much longer-term play. You’re buying in fishing villages, small, forgotten stretches of coast that will see, our sources advice, considerable appreciation but that right now have no services, no amenities. You won’t see the upside here within a month or even a year. In places like Machala , Playas, Manglaralto, Canoa, and Jama, you’ve got to be willing to wait three to five years or longer to exit.

5. Philippines . Historically overshadowed by neighboring Thailand and Bali, the Philippines , with its powdery white-sand shores, clear blue waters, and year-round sunshine, is beginning to attract attention…and tourists.

For the past three years, and for the first time since the 1970s, the country’s economy has seen an annual growth rate of at least 5%, and, last year, the peso was the strongest-performing currency in Asia , an accolade it’s expected to earn again this year.

Meantime, the country continues to suffer from a case of bad press, thanks to political instability and bombing incidents.

In other words, this is just the kind of situation we contrarian investors look for.

Boracay, an island 200 miles south of Manila , is the play. The island’s first international resort, the Shangri-La Resort and Spa, opens this year, and Boracay is emerging as the jewel in the crown for the Filipino tourism industry. Investors in the region who have historically put their money into beach resort regions like Pattaya, Phuket, and Bali are today looking to Boracay.

Seven condo projects are being developed on the island as I write, a very small number compared with the 110 new projects under way on Phuket, for example. The government is keen to control over-development and has placed a moratorium on new construction until July 2008, by which time a master plan for development on the island is expected to have been completed.

This kind of limited inventory is, of course, further good news for the investors among us.

Right now, you’ll pay about $2,300 a square meter for an unfurnished condo. We expect prices to double in the next two to three years.

Furthermore, this is a short-term rental market where demand far outweighs supply and net rental yields are running an attractive 11% to 12%.

6. The Caribbean coast of Costa Rica . You’ve heard about Costa Rica ’s Pacific coast, where lot prices have increased 1,000% and more in the past 10 years and where small beachfront lots today can sell for $800,000 skywards. However, you may know little about Costa Rica ’s “other” coast. The Caribbean side of this country has suffered from a case of bad press, reputedly too unsafe for wise foreign investment. This concern, along with the relatively undeveloped infrastructure, has kept both gringo developers and foreign investors away. Again, precisely the conditions the contrarian investor seeks. Now is the time to buy, while the region remains undiscovered and misunderstood. This perception is changing, and, as it does, prices will rise.

Live and Invest Overseas (www.liveandinvestoverseas.com) is dedicated to uncovering the world’s best opportunities for living, retiring, investing, and owning real estate. Publisher Kathleen Peddicord, with more than 22 years experience covering this beat, and her global network of in-country connections are on the move continuously in search of opportunity. Their from-the-scene dispatches, tips, recommendations, discoveries, and insights are delivered every Tuesday to readers of their free e-letter service, the “Overseas Opportunity Letter.”