This entry is part 2 of 2 in the series Understanding Costa Rica Real Estate

Early arrivers to Costa Rica buying land.In Part 1 we considered the early foreign investors in real estate here in Costa Rica’s southern Pacific zone.  The idea being that in so doing, we’ll have have a better understanding of the real estate market here. We continue now with Bob (early visionary investor) as he proceeds to segregate and sell his large parcel (finca).

Bob’s vision for what is to come is so clear (to him) that he recognizes that he essentially stole the gorgeous ocean view property that he now possesses. The plan is to sub-divide the large property (finca) into smaller parcels and sell them at a considerable profit.

He takes his 60 hectare (150 acre) finca and segregates off 5 hectares and puts this on the market at $60,000, the price that he paid originally for the entire finca, leaving 55 hectares as a pure profit proposal.

Now granted, I’m fabricating the name and the transaction. But this I do as a composite of various such transactions that I was aware of at that time. What I experienced when I got into the real estate business here in 2004 were the ripple effects of not just one deal like Bob’s, but the after-effects of many such deals.

There is some historical precedent to the investor phenomenon that transpired at that time. Well known examples are: the dissension regarding Alexander Graham Bell being the actual originator of the telephone. Elisha Gray applied for the patent on similar voice technology, essentially on the same day as Bell. Alfred Wallace and Charles Darwin both – independent from each other – came up with the theory of evolution at the same time. It was essentially the luck of the draw that Darwin is credited as the author. And to look at the advent of American Contemporary art in the New York art scene with Jasper Johns, Andy Warhol, Rauschenberg, Roy Lichtenstein and on, is to see one of the strangest examples of unrelated, converging visionaries.

I wonder at this “phenomenon”. It is recurring in human history. Unrelated individuals and groups, all at roughly the same time, turn their attention to something. It’s almost like some cosmic force directing select ones to go and do a thing. Ok, not to belabor this point, but I find it fascinating. I mean, I could understand one guy. And then maybe that guy talks to someone else about what he’s doing and they think it sounds good and so they do it also. But unrelated, concurrent action??  Por favor! 

Well, barring an un-quantifiable cosmic event from our understanding, I can only suggest that this is simply the way of the world. “Progress” of civilizations. The time had come for this gorgeous country to be discovered and exploited for what it had to offer – its riches. And, as it turns out, there were plenty of buyers.

There were several Bob-like visionary investors who converged at roughly the same time in the early days of real estate here in Costa Rica’s southern Pacific zone. These all went on to see enormous returns (turning $1.00 USD into $120.00+-) on their relatively paltry investments. A couple of the best known Dominical-centric examples of these investments are the areas of Lagunas and Escaleras and to a lesser degree, Hatillo. 

We are now getting to the time when I began work in Costa Rica real estate. These were the conditions of the market at that time. The majority of real estate sales at that time were of raw land, and this was despite the majority of buyer’s initial request was for an existing home. There simply weren’t many to pick from. The inventory was primarily raw land. After looking at the available options for existing houses they would go to the default position of buying land and either building, or holding the land for a future purpose. 

The houses at that time were difficult to sell, despite the common preference of the buyers to purchase a house. Those early arrivers to the area were somewhat unique. I like to say that we were all a bit “out of round”. We had decided to move from our homeland to an area of the earth that was certainly not the most accommodating of environs. What houses there were, were frequently expressions of that individuality that brought them here in the first place. These were not homes for the general market. Some were lovely in their uniqueness while other were, quite frankly, atrocious. 

What I came to call the “Costa Rica Formula” for buying land had a couple of iterations. The visionaries were the big winners of the formula, but those that bought from them were also beneficiaries of having been early arrivers on the scene. The formula was to buy one of the available segregations from a Visionary. Despite having been segregated from the mother farm, these properties were generally still quite large by today’s standards, commonly consisting of multiple hectares (1 ha = 2.48 acres). To then cut off a marketable piece of that parcel and sell it, effectively reducing or eliminating the initial investment principle. Buyers at that time could almost all count on this being an option.

In 2004, some of the Visionary’s pieces  were available, as well as the lots being made available from those that they had sold to.  And there was quite a lot of work being done to bring more to market. These were the days prior to the big crash of 2007/8. The reason for the crash fed the formula, and the market spiked. We were in a boom.  The sub-prime market made for an unreal and absolutely illogical availability of money to homeowners in the U.S. This was the market I started working in at that time.

My thought is that the spike in demand, and the subsequent prices, is one of the many ripple effects from the sub-prime lending mortgages thing that resulted in the demise of the global economy in 2007.  Not to belabor the point, but I think that it’s important to understand this as, here we are some 10 years later, and the effects of the “spike / crash” on the market are still very present. I’ll get to this more in a following article on present day conditions.

 


Getting Health Insurance in Costa Rica 1


I am 53 years old and have just gone through the process of applying for private health insurance. There are two types of health care in Costa Rica. One is socialized medicine. All residents of Costa Rica are required to pay into what is called “caja” (KAH-hah) insurance. This runs me about $25 per month. This is the government subsidized health insurance in Costa Rica.

I have written about my one week stay in one of the caja hospitals. I don’t recommend it. Its not so much that the practitioners aren’t good, its the overall structure. I think that you definitely want your health providers to be mindful of the fact that if they don’t offer a good service, then someone else will and they will get the business.

Photo of a stethoscope for the article on health insurance in Costa Rica

The second type of healthcare here is very similar to what you get in other  countries, and what we refer to as “private” insurance. Up until recently. the Costa Rican government was the exclusive provider of health insurance. This has changed and there are now some international health insurance providers here, and I hear that they are pretty good. I don’t have any experience with them so I can’t detail how they work or their value.

This article is just about the private insurance that is offered through INS (Instituto Nacional de Seguros), the Costa Rica government’s health insurance branch.

The Exams

Since I am so old, I had to get a number of health exams to see if I qualify for the insurance.  I still don’t know if I do qualify, but if the response on the part of the examining doctors is any indication, I should get in no problem. It is interesting that this past May 11th marked the second anniversary of a violent criminal event that almost killed me and left me blind in my left eye.

One of the testing doctors used the word “perfecto” about 5 times during the general examination of my overall level of health.  She said that if I didn’t have that one, life threatening bugger on my record, I would have a perfecto health record. So, it will be interesting to see if I get approved.  For you folks out there that are wondering how to be middle aged and have a couple doctors say say “perfecto” when they examine you, I’ll pass my secrets along in a minute.

So, 53 years old, in perfect health with the exception of this small, life threatening incident two years ago – $1,600 per year.  I can pay it monthly, quarterly, bi-annually, or once a year. I’m not sure that the coverage is as far as deductibles go, I’ll post that information when I find out. The coverage is for up to $200,000 of insuring per year.  You can get an additional coverage if you like. It’ll set you back another $160 per year and it adds another $200,000 to the coverage and is specifically for cancer and other such catastrophic incidents.

I decided against the additional coverage, despite its low cost.  I spent a month in CIMA hospital and was in a drug induced coma for 2 weeks.  That visit included multiple medical specialists, amazing facial reconstruction surgery that left nine plates in my head, a plethora of x-rays, and a good steady flow of pain meds and antibiotics. My bill came to $110,000.  So, I’m not sure what you’d have to do to run the bill up to over $200,000.

I’ll post another article if and when I get accepted.

Ben’s Health Secrets

As a reader of the Guys in the Zone blog, you get the dubious pleasure of my secrets on how to be in perfecto health.

Kickboxing

I have been into fitness all of my adult life.  We have always had a home gym of the Olympic weight variety with vertical leg press machines, and cables for low rows, squat rack, bench, etc. I have been involved and invested in my health. I thought that I was in shape when I went to my first kick boxing boot camp here on Dominical beach – boy was I ever humbled.

Aside from attaining to new levels of exhausting, never before achieved, I also released more endorphins than I previously knew possible. The point here isn’t to discuss how to kick box, but simply to say that I am in the best condition of my life, and I credit this activity with this data point. Oh, but there is one more thing –

Green Drinks

Vitamix is the key here. I brought one down from the States during a visit to my family in Davis.  If you don’t yet have one, or worse yet, don’t know what one is – a Vitamix is a blender on steroids. I mix up a drink every morning that has the following ingredients:

  • kale
  • spinach
  • ginger root
  • turmeric root
  • frozen pieces of pineapple
  • frozen bananas (2 of ’em)
  • 2 apples
  • 1/4 cup of ground up oat meal
  • 2 heaping tablespoons of ground up flax

I will also add mango, tamarindo and other fruits when they are available. This drink gets me through every morning of my life with no hunger and is slowly converting me into something of a super hero.  I am almost to the point of flying, almost.

The best way to buy a Vitamix is to go to my website and buy one there.  There are a couple of reasons why this is the best way to buy – one is that it appears to be the best price around.  The other is that I make a commission if you do.  Buy a Vitamix from Ben: Go to www.blenditraw.com.

In conclusion, getting basic health insurance in Costa Rica is easy.  It’s the getting healthy part that takes some doing.


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