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Gringo Pricing Versus Local Pricing In Developing Property…

“Kathleen, it is my understanding that, when arriving in Ecuador and once an Ecuadorian realizes that you’re an American looking for a place to rent, they automatically go up on the price.

“While we cannot force anyone to change this habit, if it is true, wouldn’t it be a good idea to start spreading the word, as well putting out some information, so that we might be able to discourage this kind of behavior?”

–Patricia V., United States

Unfortunately, this kind of behavior isn’t limited to Ecuador or property rentals. Americans are all assumed rich by people in most of Latin America and other parts of the world. And compared with many in these regions, even middle-class Americans are, indeed, rich.

Really, it’s not even being an American, per se. It’s simply being foreign. American, Canadian, North European, etc…in these markets, it’s taken for granted that we’re all rich.

A colleague in Nicaragua once came up with a pricing structure for that country. “There are three prices for everything in Nicaragua,” she used to say. “The local price, the gringo price, and the blonde price.” My colleague was blond. In her experience, the lighter your skin and the lighter your hair, the higher the price.

The reason that many in Latin America get away with gringo pricing is that, much of the time, even the gringo price sounds like a bargain to us gringos.

Your objective as a buyer or renter anywhere is to get the local price or as close to it as possible. This isn’t easy. It requires research, education, and a local connection, someone you trust who knows what something “should” cost in that market.

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