Costa Rica History in knife metaphorI’d say that about 1/10th of my time spent with people looking to buy property in Costa Rica’s Southern Pacific zone is spent in the actual buying/selling of property. The other 9/10ths is a mix of conversations regarding what’s involved with living here, as well as discussing the business of real estate in Costa Rica.

At its core, the lack of an actual MLS (Multiple Listing Service) colors all aspects of the business here, and I’ll go into that later on in this series. To really understand the business of real estate here, I have found it helpful to go back in time and see the progression of events up to the present. This helps to not only understand the current market but also, to project what is to come.

Early days:
I got into real estate in Dominical in 2004. It felt like the day I got into real estate was the day that someone threw the on-off switch on the market. Since then I’ve heard some tales indicating that the market was already simmering and poised to boil.

I made a sale on my first day in the business. A $60,000 gorgeous ocean view property sized at around 2 acres.  The property featured Uvita’s Whales Tail front and center. That property has gone on to have a lovely home, guest house and pool built on it. It has been re-sold and enjoys a stellar vacation rental history (link to rental page on HomeAway)

Quick overview of The Zone:
The Zone is made up of a string of 3 towns with Dominical at its northern end. The northern boundary is not a hard line but is decidedly fuzzy, easily extending up to Hatillo and at times, up to Portalon. (link to Hills of Portalon Development).

From Dominical heading south on the coastal highway you get to Uvita and then further south, to Ojochal. The area between Dominical and Uvita has a nicely laid out mountain range that runs very parallel to the ocean. Hence the handle “coastal mountain range” This means that you can travel inland from the beach just a short way and get to elevation where it is breezy and cool and offers expansive views of the ocean and coastline, attributes which make this area extremely desirable to investors, relocators and migrators (part-of-the-year residents).

More History:
Before the incoming press of foreign interest in The Zone, the Ticos (Costa Ricans) owned all the land, and their land holdings were always in the multi-hectares (1 hectare = 2.48 acres. Think 2.5 to make it easy).

There was a time in the not too distant past when land in Costa Rica was nearly value-less. There were land-grant programs whereby a man simply had to be willing to take responsibility for a property and the government would “grant” him the land, with conditions.

At that time it was not known that “nature” had a lucrative aspect to it. Instead nature was largely viewed as “in the way” and needed to be tamed, subdued or eliminated. So, one of the conditions to receiving a land grant was to cut the trees down and raise cattle.

I suspect that this era may have coincided with the “McDonalds” explosion. This is an arguable point, so let’s just say it coincided with an extreme demand in the U. S. (and world) for beef.

After some time of cutting down enormous canopy trees and attempting to raise cattle in former rain-forest environs, there was a shift in our world’s appetites; nature became an important commodity. Granted, beef has continued to be an active commodity, but it was also learned that former rain forest land doesn’t necessarily make for the best pasture land.

Raising cattle in Costa Rica was a daunting struggle. The farmers found themselves up against nature. Having to maintain former rain forest jungle land in “pasture” condition presented its trials, as well as the fact that the beef business (exporting meat, bureaucratic inefficiencies, and 3rd world infrastructure or lack thereof) made a guy scratch his head and wonder if having all this land was such a good idea.

The Tico culture was/is multi-generational. These large, granted tracts of land, would end up being populated by the man who acquired the land, his now grown sons & daughters and their families, and the grand kids (soon to also have families.)

So despite having lots of land, a condition that in first-world countries equates to being wealthy, these farmers were subsistence. They lived off of what their land produced. As a child would grow to adulthood, Abuelo (abuelo = grandfather) would simply build them a house and apportion off some land (or not) and they would continue on contributing to the sustenance of the family. The land itself was not thought of in lucrative terms.

Abuelo just happened to acquire a land grant on, let’s say, 60 hectares of land that reaches from the inland side of the maritime zone on the coast up to the highest point of the coastal mountain ridge. He’s not thinking “oh boy! I’ve got some ocean view land here.” No, he’s thinking: “man I hope this land is fertile.”

Enter foreigner:
One day Bob, a tourist, is exploring the area and decides that he’d like to buy Abuelo’s property. Bob offers Abuelo $60,000 for the land. Abuelo has never even considered the remote possibility of maybe someday having such a sum. In fact, he’s never even seen that much money. He talks it over with his family and they (very understandably) feel that this would be a wonderful thing for them to do. So, they sell their land.

Bos is a visionary. He sees what is likely coming and so he stakes his early claim. Now, keep in mind that there is no electricity to this property, the access is horseback and the water is from a nearby spring that is bubbling out of the ground. Abuelo has run a pipe from the spring to an elevated storage tank near the family homes. Bob’s a visionary in that – what foreigner in their right mind would possibly want such a remote and forbidding piece of land?

To understand this is to understand the element that is credited with making the world go round. We all have different likes and dislikes. I wonder at the likes of Steve Jobs, Bill Gates and Paul Allen’s level of focus on the personal home computing idea at the time that they had that focus. I’m not of this ilk and so my hat is off to such ones. I view the early investors here in The Zone as being made of the same stuff.

In looking back over the history of the first wave of investors here, I marvel at their foresight. My then wife and I looked at some Whales Tail view property in Uvita around 2002 and, despite its being gorgeous and nicely priced, I felt that it was simply too remote. This was in the same area where 2 years later I sold my first property.

Ok, so I said that to understand the real estate market here in Costa Rica, it helps one to know a bit of the history. Granted, we’ve gone back to what I call the first-wave of intrepid and visionary investors – the Mavericks. We’ll continue on in the next article with Bob’s next steps and incredible gains on his visionary act.


Crime is Going Down in the Zone


CAP Meeting in Uvita

The bad guys, the criminals, are getting caught and thrown in jail here in The Zone, and the quality of life is in an upwards trajectory.

This morning was our monthly community meeting of CAP (Crime Awareness and Prevention). I can say that I am truly proud of this little group of giving individuals. The amount of good that they have done for us here in The Zone is impressive.

Community effort against crime

The Zone's Effective Anti-Crime Effort

The Zone is defined as running from Ojochal up to the Baru river. We are hoping that this expands up to Matapalo, but for the moment, the northern edge is the Baru river in Dominical. The most tangible effect of CAP is that they have put a number of criminals in jail.

There is something about the Costa Rican justice system that is extremely sensitive to making sure they’ve got the right guy before putting him in jail. With the video cameras placed strategically around The Zone, the bad guys are getting caught on camera doing their dastardly deeds. The evidence is incontrovertible. There is no doubt that that was them, following the tourist couple, and then grabbing their backpack when they turned their backs. Or that the guy that is reaching in through the apartment window and coming out with the camera and other goods is the guilty party.  These folks are in jail, and they are no doubt talking about The Zone and how it probably isn’t the best place to ply their trade.

The cameras are a direct result of private funding.  The start of the new year is an opportunity for all of us residents to renew our $100 annual membership and get the new 2012 CAP sticker. Others are becoming believers and are quietly contributing substantially to the effort. One such contributor place $20,000 in the CAP account.

A truly momentous event, capping off the 2011 year for CAP, was the diligent efforts of one of the Team members, (of which there are about 10.) This member, let’s call him Jackie, helped to get CAP into an official “non-profit” status. Now our contributions can be deducted, among the many other benefits. This is a huge achievement here in Costa Rica.  The effort was greatly enhanced by the generosity of local attorney Eduardo Vargas, who donated a good amount of his time for the project. Jackie has had a good final quarter in that his efforts were also directly involved in securing the $20,000 contribution.

Jackie is just one of the many talents that make up this multi-faceted group. The prime organizer of the movement is referred to as Mom by many of the CAP members. She just has a way of making you want to participate.

It’s a bit awkward to start down the road of mentioning the individuals in this Crime Awareness and Prevention movement since many of them don’t want to be known as the shakers and movers of the highly effective anti-crime effort –  for obvious reasons. But also, there really isn’t any one contributor who deserves mention more than the others. They are all giving of their time, and whatever gift they possess in this life, they bring to the table in a way that contributes directly to the quality of life, not only for those of us who live here in The Zone, but also for the many many visitors who pass through The Zone each year.

CAP DONATION INFORMATION

Contributions can be made:

1.   a)   Transfers from BCR Accounts: Account name: GUARDING THE PEOPLE S.A. ID Number: 3-101-310897 Account Number: 001- 0285359-0 (Checking account in dollars)   b)   Transfers from non BCR Accounts: Account name: GUARDING THE PEOPLE S.A. ID Number: 3-101-310897 Account number (17 Digits):15 20 10 01 02 85 35 90 0

2. Wire transfers: Banco de Costa Rica, SWIFT (BCRICRSJ), 2nd Ave 4-6 St., San Jose, 010101, Costa Rica Account #: 001- 0285359-0 Account name: GUARDING THE PEOPLE S.A. ID Number: 3-101-310897 Account address: San Clemente, Playa Dominical, Osa, Costa Rica

3. Mail checks to an US address (payable to GUARDING THE PEOPLE): CAP SB 07   12355 SW, 129 Court suite # 10   Miami, FL 33186 – 6406