We are in high season here in the southern pacific zone. The months of November through April are typically when there are more tourists here than during the rainy months.

There is another type of “high season” happening right now as well. This has more to do with world conditions. I know, those from the States are going to think that Mr. Trump is pushing many to look elsewhere. And I suspect that this is true to some extent. I think that Mr. Trump has been good for my Costa Rica real estate business. I think Mrs. Clinton would have been as well. Such is the world that we live in.

However, our property buyers here are not just from the States. We’ve got buyers from Canada, despite their currently weak currency. These people are buying property and essentially paying 30% – 40% more due to the exchange rate on their currency. One has got to wonder – why?

France, Germany, Great Britain – all are providing us here with buyers. Again: why? There are economic, political and security issues happening in various areas of the world. I suppose that greater analytical minds would come up with the cause and effect links in trying to answer the question. But I find that there is one common thread when I talk with these people.

The Reason:
is pushing, and the promise of less stress, is pulling people to consider a life in Costa Rica. Simpler living is highly attractive. Costa Rica offers this and it (simple living) seems to be the antidote to whatever may be happening in one’s home country.

Uvita, Dominical, Ojochal and the surrounding areas that make up Costa Rica’s southern pacific zone are all seeing an influx of buyers. But there is more. There are some big-money players who are making some moves here that are notable. There are condominium complexes being constructed, and sold at a good clip. There are town homes, urbanization projects and upgrades to some of the antiquated infrastructure in some of these areas.

There is some talk of giving Uvita a facelift. This is much needed. With both Dominical and Ojochal, you turn off the coastal highway and drive into the town. In Uvita, the highway passes right through the town. Up till now its growth has happened with hardly any attention to the aesthetic and it is essentially a strip-mall, Costa Rican style.

This is a pity since Uvita could really have been (or be made to be) one of the most beautiful towns on the planet. So if these well funded entities see the beautifying of the town as in their best interests, great! Although it’s hard to imagine what can be done, short of tearing the whole thing down and starting over again.

The Envision Festival is going on currently. This has become one of the largest events of the year. Kudos to the organizers. I’ve heard that 7,000 people attended last year, but that about half that number are here now.

Uvita Costa Rica's Crunchy Envision Festival

2017 Envision Festival Uvita Costa Rica

Some of the Ticos complain a bit about Envision, claiming that the drugs, nudity and general licentiousness is disrespectful to their culture. I suspect that there is some truth to these allegations, but for me, I’ve never met an Envisioner I didn’t like and the festival provides a time of some fascinating people watching.

I’ve not  personally ever attended. I can hear the music from my home well, the bass notes anyway, and I routinely provide rides to those thumbing to the grocery store and back. There is also the complaint of them being a bit odoriferous, but I can’t speak to this having lost my olfactory sense some years back. So I get along fine with them in my car and always enjoy their upbeat spirit.

So between the time of year and world conditions, sales are good here in the Zone’s real estate market.

About Property Prices:
During the recession, there was not much of a market here. It hit hard and us realtors languished waiting for the anomalous inquiry that might result in a sale. I actually got into brokering hard money loans during this time in an effort to not only make a little commission, but to also help some land owners to not lose their properties.

Prices plummeted during the recession. This was an interesting time. The pre-recession time was a “boom”. The biggest challenge for a buyer then was being able to find an available real estate agent. I felt like I should put a Baskin Robbins “take a number” device at the door. Some of these buyers were our good-old bread and butter retirees, looking to retire to Costa Rica. However, there were lots of folks who refinanced their homes and then found themselves cash-rich and wondering what to do with it. The causes of the recession helped to fuel some of that heady boom and resulted in pushing prices up to a rather silly level.

So the fall of pricing some 40% – 50% during the recession could appropriately be called a correction.

Much of our land here is still at recession pricing. There hasn’t been a big upward push on prices since then. The demand for houses is strong and so we’re starting to see some upward movement there – all very rational though. This is no heady boom. Its simply that the inventory which was glutted post-recession, is finally starting to get mopped up. This was inconceivable in the years following the recession due to the glut.

I still get asked sometimes why it seems that everything is for sale. I find this interesting since I have to really work to find properties for some of the criteria lists I build for my clients.

Yes, I suppose everything is, in fact, for sale, at some price. However, finding what you want, finding that screaming ocean view with good access and amenities nearby, and all this in your budget, can sometimes be a bit daunting.

And then there is that wonderful amenity “simplicity”. I wonder if this could be put at the top of the list. Right up there with “ocean view”. I’m thinking that this one amenity is the primary mover of the current strong market we’re seeing here in The Zone.

Wire Transfers, Escrow and an Investment Idea 2

When you buy a piece of property in Costa Rica, you will likely wire money from your home country bank to a Costa Rica escrow service. This can be quick and easy, or it can be a major pain in the neck. Life used to be so easy before terrorism… and drug running… and global economic crisis… and climate change and…

Funny thing, we used to find things to complain about, even before all this wonkiness in the world. Had we only known then what we know now.

It has gotten a bit dicey moving money around this planet. There is the off chance that you might be laundering some drug money, setting up to fund an attack of some kind, or generally not doing things just right, so there are safeguards.

For years we have used a rather casual system here in Costa Rica by which lots of land was bought & sold. Buyers generally put 10% of the purchase price of a piece of property into escrow while we real estate guys and the lawyers went about being duly diligent making sure that the property was what it claimed to be.  That money was put into what we called an “escrow” account.

Well, as it turns out, those escrow accounts were anything but actual escrow accounts.  They were simply the attorney’s business bank account and he held the money pending the closing when he would then disburse the funds. What can I say? We were told that they were escrow accounts. I didn’t ask the question for many years: “You do mean a bona fide, legitimate, registered and managed escrow account, right?”

Well, by the time that I asked the question, the accounts were becoming all of that – legitimate I mean. Now they are, and boy do I miss the good old days. I don’t know of one bad experience from the former program, but I’ve had some tough situations with the current one.  As we have grown up here in Costa Rica with respect to legit business practices, we have entered the world of complexity on an international scale.

When transferring a land buying sum of money into Costa Rica, you must also document where the money is from, how you got it, and what it is going to be used for.  Without this information, the escrow agent, for fear of severe fines, won’t accept the funds into their account.

I know, this doesn’t sound like that big of a deal, and I guess really it isn’t.  It’s just that it used to be so much easier, and it worked just fine. I suggested to my lawyer that we just ignore all this procedural hogwash and that we just use his account and let’s move on.  He said that if he were to do that he would get into trouble, so those days are gone.

A Great Investment Idea

My bank account bears silent witness to the fact that I’m no great investment advisor.  That’s my disclaimer.

Here’s my idea.  Actually, in addition to my disclaimer I probably ought to give credit where credit is due. My buddy, kick boxing partner and competing real estate agency owner John Weiland over at Coldwell Banker one morning shared what he thought was a great investment idea. “His” idea ran parallel to an idea that I had had percolating around my brain for some time.

Disclaimers and Credits Done, Here’s the Idea

Buy up some of these under $100k (U 1K) ocean view lots, build a reasonably nice, well designed house on it, and put the house on the market, squarely placed in our breadbasket market of $300 – $350k for a turnkey house.

Reasons Why It’s a Good Idea

  • Under $100k ocean view properties have an ocean view – duh! Ocean view is the #1 quality looked for in a property here in The Zone.
  • Most U 1K properties are under $100k for some motivating reason that makes them especially good deals. It is likely that the seller is motivated and so the price is below market.
  • Most of our buyers start off looking for houses, but end up with raw land – reason? There isn’t a good selection of houses in The Zone. Fill the need, make a buck.
  • With the costs of the land and building a house (see table below), you are providing “supply” for the “demand” that we are seeing here: houses in the $250,000 to $350,000 range (with ocean view).

Numbers Breakdown

Item Expense
Under $100k property $75,000
1,600 sq. foot house @ $100 per foot $160,000
Small pool $20,000
Total $255,000
Selling price $325,000
Profit $70,000
Projected Time span 18 months

As the Costa Rica real estate market continues to morph with the changing world conditions, we are talking with more and more people that are looking to Costa Rica as a possible place to make a new home. How to make a living in a foreign land is one of the hotter topics of the day. This one would work to support a family, providing a decent yearly income.

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