Obtain a permanent visa

As long as you show "sufficient income to support yourselves" you should be fine.  Initially you get a temporary cedula and then have around two years or more to provide the rest of the paperwork. Even if you are fluent in Spanish, it can be helpful to use the services of someone who deals with Immigration on a regular basis as the rules keep changing and there are a lot of details to be dealt with.

Your budget should be fine although inflation is around 10% per year at present. We own our house and have a car and spend around $1500 to 2000 US per month with no rent of course.
Friends of ours were asked to show $2000 US per month recently and they rent.

Year round rentals tend to be unfurnished often without appliances or any heat source. If you start heating with electric heaters or gas, you can easily spend several hundred dollars per month for four or five months.

Most houses along the coast are built as summer homes only and are very difficult to keep comfortable in winter. An open fireplace will not keep the place warm.  We have a fireplace insert and burn about 5 tons of wood per winter.

Generally landlords will expect a five month deposit ( it goes into a special bank ) and if you use a realtor he will get another month as a finders fee from you. There are lots of rentals, I do not think it will be that hard to find something.

HI Claire Abbott,

Welcome to Expat.com!

I have created a new topic as from your post on the Uruguay forum.

Thank you.
Christine

Hi Claire,

Long term rentals are not a problem. Some landlords prefer to keep the tenancies empty for most of the year and rent them out for a couple of months in the vacation season, others rent year-round. Either way, the $$ work out to be pretty much the same for them. It's short-term rentals that are relatively difficult to obtain.

A basic monthly budget for two is ($US):
Food: 500,
Phone/Internet: 40,
Cable TV: 30,
Electricity: 150,
Water: 20.

Then there's all the other stuff you may or may not need: Car (gas), health insurance or medical services, personal services and preferences...

Renting can be tricky and there are some gotchas. If you wish assistance in selection for Punta or Piriapolis I am happy to help you as that is what I do. Send me a PM if interested.

Some personal observations about Punta vs. Piriapolis... I find, contrary to what one might think, things to be generally cheaper and easier to find in Punta del Este - groceries and daily needs things e.g. As far as living spaces, there is better selection in Punta. In terms of living, Piriapolis has a small-town feel, is visually appealing geographically and in some ways architecturally and has an interesting history. It also has a vibrant and growing expat community with a hippy influence. Punta has more of a modern feel, is a good base for exploring but is more spread out. The transit system is quite good if you don't wish to buy a car.

Hope this helps