This entry is part 1 of 1 in the series Understanding Costa Rica Real Estate

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 appropriately call the first-wave of intrepid and visionary investors – The Visionaries. We’ll continue on in the next article with Bob’s next steps and incredible gains on his visionary act.

Big Interest in Moving to Costa Rica 1

Traveling around the U. S. I find an inordinate amount of interest in Costa Rica. I probably shouldn’t be surprised at this, there has always been a reaction to saying “I live in Costa Rica”, but now… well it seems to be more than ever. Why is this? I am inclined to default over to observations I’ve made in past articles.

Earth coming apart

End of the Worlders” is a handle that I give to the smaller of the group categories that I use to define those moving to Costa Rica. So many say that they feel like it “is all coming down” or, “I need to slow/quiet down” and so on.

Here are some notes of my observations from the road.

I traveled from Davis, which is in the northern part of California, to southern Utah where I camped in Zion National Park for about a week. Despite not being at all what I expected (I was set up to backpack), this was an extraordinary trip. Zion is pure magic.

I showed up in a cab that I had caught in St. George, so I found myself in “South” campground in Zion. I was essentially car camping without a car. All around me were spacious and NICE tents, trailers and motor homes. One of the tents that I saw had a lanai. I noticed the elderly gal sitting in her lanai, all screened in, nice & cozy, reading a book.

After being there for a while, I had determined that everyone, and I mean everyone, was interested, or at the very least, available to stop and converse a bit. So, later on, when I saw the owners of the aforementioned lanai-equipped tent stepping out of their tent, I felt compelled to approach them and tell them of my gawkings of their abode. They were more than happy to tell where they got it and make expressions of how much they loved their tent (they bought it through Cabellas for those who are curious).

It soon became evident that lanai equipped tents were not so rare. That older couple must have wondered at the guy that made such a fuss about it.

Anyway, my camping trip ended up being as much a social visit with people I had never met before as it was a visit to an extraordinary National Park with mind blowing hikes, views and sandstone configurations that stagger the mind.

Now, getting back to the topic at hand: there I am, out in the middle of remote desert in the southwest of the US, engaging in LOTS of conversations on the trail and in the campground, and I re-affirm that there is indeed a general interest in the country where I live – Costa Rica.

I wrote about my evening giving a talk on Costa Rica here in Davis. It was an experiment to see if the reported interest really was true. “Reported” being what visitors to Costa Rica tell me. “Everybody is talking about Costa Rica” they say.  This they say to a guy while  there in Costa Rica – to a guy that lives in Costa Rica – while the conversation is about the topic of moving to Costa Rica. Hmmmm, is this unbiased, truly objective positiveness about Costa Rica?

One has to wonder if it is true, and if, outside of that particular setting there really is anybody the least bit interested in Costa Rica.

You’re from Costa Rica?

  • “My wife and I are considering moving there.”
  • “My son is going to honeymoon there for a month.”
  • “We have wanted to simplify our lives. Would a move to Costa Rica be a good way to do this?”
  • “I used to live there.”
  • “I own some land there.”

When I say that part of my work there in Costa Rica is consulting with folks that would like to move there, they ask for a card.

Here are some of the discussion points.

 Is it less expensive there?

Yes, and no.  There are some specifics here that are actually more expensive. Gas is more expensive. I’m paying a little over $5.00 per gallon for diesel. Electricity for the home is quite expensive.  Cheese is really expensive and not that good, IMHO (look it up).

Overall you can make a fixed income go further here, but it requires one to let go of some of the comforts so common in the good ole’ US of A. Things like medicine and dental are reasons for at least visiting Costa Rica, if not living there.

Can I quiet my racing mind there?

Yep, you can. (Read up on the “4DOTS” theory here.)

I can only speak first hand of the air in the States, but I have had some Canadians and Europeans tell me it is the same there. The air in the States is saturated with fuss. Mental fuss. The powers that rule the air-waves are telling us what to think about, and they are good at it. As much as we might like to think that we are immune, I don’t think so.

To get away from that, to unplug, and to then think a thought that originates from whatever propensity we were born with… well this is the stuff that 4DOTS is made of.

Costa Rica provides an opportunity, not only to unplug from media, but to connect with nature. There have been studies that suggest that as we humans grow past the age of 45 (give or take), we have a decreasing ability to manage stress, and an increasing need, and beneficial result from, getting out into nature.

I think that these points made up the bulk of conversations in my travels around California and the southwest this trip. I became cautious of mentioning where I live when I would meet someone. If I had any interest in talking about something besides Costa Rica, I would say I live “out of the country” or some such. Then, if they asked, I’d try and say “Latin America” or “Central America”.

Although for the most part, I am more than happy to talk/write about my life in Costa Rica. It truly is a fascinating and wonderful place to live, and I totally get why so many would be interested in visiting, or moving to Costa Rica. But yes, there are times when I would like to talk about something different. Imagine that!

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