Guys In The Zone: Costa Rica Real Estate

March 10, 2010

The Most Precious Real Estate

I want to tell you the ocean knows this,                              Yo os quiero decir que esto lo sabe el mar,
that life in its jewel boxes                                                         que la vida en sus arcas
is endless as the sand                                                               es ancha como la arena

Isla Ballena in the Paque Nacional Marino Ballena

As a teenager, I was as inspired by the poetry of Pablo Neruda.  So much so, I decided to study English and wrote extensively during my college years in San Luis Obispo, California.  I had the good fortune to rent a house on the beach with two friends, who were brothers.  The younger brother would frequently bellow, “Thar she blows!” when he spotted a whale’s spout.  His brother and I would always drop our books and run to glimpse one of Nature’s great spectacles.

Perhaps fueled by this touch of nostalgia and the fact that I spend almost everyday at the beaches in and around Uvita, I wanted to highlight some of the most precious real estate in Costa Rica— Parque Nacional Marino Ballena.

Parque Nacional Marino Ballena

Created in 1989, the Marino Ballena National Park was the first national marine park in Costa Rica.  It was created to protect the marine ecosystems associated with the beaches, mangroves, islands and a fragile coral reef that turns out to be the largest on the Pacific Coast of Central America.  The park itself stretches from the southern end of Playa Hermosa to the northern end of Playa Piñuela, and a triangular area reaching 9 miles out into the Pacific Ocean.  That triangle also includes the famous Uvita Whale’s Tail, Tres Hermanas (The Three Sisters) and Isla Ballena.  In addition to enhancing ocean view of property in the area, these landmarks are home to thousands of aquatic and terrestrial species.

Whale breaching in the Pacific.

“Ballena” means whale in Spanish.  That’s right… this area is visited every year, primarily between the months of November to early March, by southern and northern hemisphere female humpback whales.  They arrive to give birth and nurture their 14-foot?!! newborn calves in the warm, calm waters of Costa Rica.  Although there are daily whale sightings in the peak season, this majestic mammal is still on the endangered species list.  If you haven’t seen one up close, you might want to consider putting a whale-watching tour out of Uvita on your Bucket List.

Even if you aren’t into the idea of being on a boat in the open ocean, you can still enjoy the experience from land.  I vividly recall one morning at La Parcela (which used to be my favorite spot for breakfast until they stopped serving it!) when my parents were visiting.  We were enjoying our gallo pinto and eggs when a dark blue whale suddenly breached in the middle of the bay.  Over the next half hour, it continued to rise out of the water, twist, and crash down on its side at least 20 times.  It’s safe to say, this was the most memorable breakfast my parents and I have ever shared together.

Return Of The Ridley

The humpback whale is just one of many creatures inhabiting the marine park.  Sea turtles are another ancient animal that return to nest on these specific beaches every year.  Thanks to conservation efforts, Olive Ridley numbers are actually rising in the southern Pacific.  You can see them while snorkeling around the Whale’s Tail or one of the aforementioned islands.  But, let me tell you… if you haven’t seen a baby sea turtle dig out of its sandy nest and instinctively scratch its way to the water, you’re missing out on a truly wondrous experience.

Without question, the great outdoors, including the multiplicity of marine life found in Parque Nacional Marino Ballena, is at the center of this amazing life in The Zone.  It is one of the primary reasons tourists visit and why many of those tourists eventually invest in real estate and/or relocate in this part of Costa Rica.  The immediacy of wildlife in the southern Pacific zone, like a 50-foot whale breaching during breakfast, adds value beyond measure.

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February 12, 2010

Water In “The Zone” (Part One)

Filed under: Info & How To's, Projections — Tags: , , , , , , , — Tigre @ 4:15 pm
Costa Rica, Uvita, water, creek, lead, reflection

Ample surface water in The Zone.

Recently, I had the good fortune to visit a friend who gave me an excellent book called “The Heart of Dryness” by James Workman.  Although this particular book is about the socio-political struggles of the Bushman of the Kalahari Desert, it sparked a deeper exploration into a topic I believe will jump to the forefront of everybody’s conversation in the near future— water.  Access to fresh drinking water is already one of the “big three” infrastructure necessities (along with electricity and good roads/access) when looking for property in Costa Rica, hence the motivation for this article.

I will save my thoughts on the impending collision between over population and global warming (two forces which, in a nutshell, will have a dramatic effect on fresh water availability and global food production).  However, I do want to share a few thoughts and discoveries about water in Costa Rica, as I believe it will continue to move up the list of positive reasons why people will be moving to the Southern Pacific Zone.

Unlike some of the coastal areas in Guanacaste and Nicoya, The Zone has an abundance of fresh drinking water.  There are two main reasons for this fact— (1) rainfall and (2) less development.

Rainfall

For the Southern Pacific Zone of Costa Rica, rainfall ranges between 120-160 inches annually, with the rainy or “green” season (May-October) supplying the majority of this annual total.  My experience has been that the sun shines almost everyday in the rainy season, typically in the morning to mid-day hours.  Residents of The Zone thoroughly enjoy the 20-30” of rain we do receive in the dry season (3 hours last night, in fact), and the lush, green vegetation it stimulates.  In contrast, the popular coastal region of Guanacaste (Tamarindo, Flamingo, Papagayo) receives only between 40-60 inches of rain annually.[1]

Population

Approx. 35,000 people live in the Osa Canton of Punta Arenas (think of a canton like a county within a state), which roughly includes the coastal area between Dominical and Palmar.  Unlike The Zone, Guanacaste’s coastal region developed rapidly over the past 15 years.  According to the Minister of Tourism, it is the #1 Canton for tourism, specifically the coastal areas.  This influx of world travelers, especially in the peak dry season, puts an added demand on water resources.  Without question, the agencies and residents are benefiting from these growing pains experienced by our neighbors to the north.

Fresh Drinking Water

Part of the reason for this “gold star” is the government structure.  AyA (Aqueducts and Sewers) is the main government agency that manages water in Costa Rica.  Although many subdivisions and larger farms in the Southern Pacific Zone have their own water sources (springs or surface water like—rivers and streams), most of the towns and pueblos get their water from AyA-managed water delivery systems.  Those smaller, rural communities in the region have been encouraged by AyA to form ASADAs (Administrative Associations for Sewers and Aqueducts) to become eligible to receive AyA assistance in constructing and operating water systems.  ASADAs make up nearly ¼ of the water provisions in Costa Rica.

Rain and a rainbow over Uvita.

“At 82.2 per cent, Costa Rica has one of the highest rates of population with access to safe drinking water in the Latin American and Caribbean region.”[2]

The vast majority of water in the Southern Pacific Zone is either (1) safe to drink from the tap or (2) treated with chlorine and safe to drink from the tap.  There are cases of people living below cattle pasture or near commercial industries where run-off has led to water-born illnesses and toxins, respectively, but these are few and far between along the coast.  I live on a farm where we drink our water from the tap, and I feel very fortunate to have clean, chlorine-free water on demand.

Properties that are served by mountain spring water tend to be fresher and with a reduced risk of water contamination.  Over 50% of the property we sell is located in a development of some kind.  These developments range from those that have received a water concession and those that are at some point along this process.  Either way, these developments have invested in basic infrastructure, or the “big three”– water, roads, and electricity.  We also have many clients requesting information on these larger properties with independent fresh water sources, when they become available.  One beautiful 50-acre listing, Finca Uvita, has two springs on the property and touches the Ballena River for over 1/2 a kilometer (or 1,660 ft).

Whether you buy a large farm like Finca Uvita or a viable commercial piece in central Uvita, you will intrinsically benefit from a growing area and an abundance of water in The Zone.


[1] Toucan Guides, http://costa-rica-guide.com/Weather/WeatherMap.html

[2] STATEMENT BY THE UNITED NATIONS EXPERT ON WATER AND SANITATION, March 2009

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October 13, 2009

Now What’s My Land Worth?

Filed under: How to Sell, Info & How To's — Tags: , , — Ben @ 5:51 am

I’m going to go out on a limb here and define some specific points that we at Guys In The Zone use to evaluate a property.  At the moment, this practice tends towards the black arts since the basis for land values in the zone went right off the cliff with the rest of the world’s economy.

Jesse over at Green Leaf Real Estate has come up with a rather interesting formula for property evaluation:  take what was paid for the land and add 25% annually, and then reduce that number by 40% to get today’s market price.  I find this technique to be ingenious, not so much for it’s accuracy, (that would be a subject of much debate), but due to the fact that Jesse actually came up with a method for evaluating land that sounds like it’ll put you somewhere in the ballpark.

The problem is, we’re not sure where the ballpark is these days.

Rod & I have been working more with the other real estate agencies in The Zone as we move towards a more cooperative real estate profession.  John Wieland of Coldwell Banker invited us out to look at a couple of houses in Ojochal and we got to listen to how he addressed the question “what’s my house worth?”.  He answered: “you can follow the market, be right at the market, or lead the market”.  To “follow the market” would be to realize that others have dropped their price and so you follow suit.  “Be at the market” would be to stay in the trajectory, up or down, that you feel the market is in.  Now, to “lead the market” means that you anticipate the market and blaze a trail with new prices that are compelling to the type of buyers that we now are seeing here in the zone.  In today’s “down” market, this means doing extraordinarily low pricing to get a timely sale. (more…)

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February 19, 2009

A Brief History of Real Estate in The Zone

“The Zone” is made up of a stretch of coastline starting from Hatillo in the north, and stretching south to Palmar Sur.  Included in that zone are the following towns, noted from north to south:

  • Hatillo
  • Dominical
  • Uvita
  • Ojochal
  • Palmar Sur

The inland portion of The Zone is a leg that runs from Dominical to San Isidro de el General, also known as Perez Zeledon.  In between Dominical and San Isidro is the town of Platanillo.

The Southern Pacific Zone of Costa Rica

The Southern Pacific Zone of Costa Rica

A word about pricing:
When dealing with ocean view properties in Costa Rica’s southern zone, the usual criteria of looking for a “per square meter” pricing fails us.  This becomes evident quickly as one familiarizes themselves with the market place.
Evaluating an ocean view property in this area is a combination of attributes, or virtues that come together to give the property its value.  Based on observing land buyers over the years, I rank these virtues in roughly the following order:

  1. view
  2. access
  3. size
  4. infrastructure
  5. amount of usable land
  6. proximity to the beach or a river
  7. privacy
  8. air motion

As an example of this, I once had a 10 acre property that had a window view of the ocean.  Of the 10 acres, perhaps 1 ½ were usable, the rest falling away in jungle covered hillsides. Price: $115,000
Across the way from this property, perhaps within 500 meters, I had another property of 2 acres with a sweeping ocean view, (more…)

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February 3, 2009

Relocation – Surviving the Transition Financially

domrestaurant.jpgAre you an entrepreneur who wants to relocate in Costa Rica? Many of you have ideas of what you would like to do but you don’t know if it is feasible. Do you buy a well-priced piece of real estate then develop it to your liking? Or, do you buy a turnkey business in one of the small towns of the Southern Pacific Zone (SPZ)? Those are two questions The Guys In The Zone are asked often, and I thought I would shed a little light on the possibilities.

Buy land, build structure, announce grand opening.

Relocators who lean toward the Buy & Build model are the most common brand of investor. Rarely, does the building process go perfectly smooth especially if you are a “first timer” in Costa Rica. Even with a good contractor, we encourage most owners to be on-site often. In fact, the more you can be there to answer questions and provide direction, the better. There’s nothing worse than flying down to check on the status of your building only to discover the size of your custom kitchen and bathroom have been interchanged?! If you follow this advice and move down to oversee the building process, then there are the obvious costs associated with living here (rent, bills, food, gas, etc.). However, this increases your chances to end up with the small (or large) business you always dreamed of. I have attended a few “Grand Openings” in the past few years, and most owners smile with pride, albeit with a touch of fatigue.

Most of our commercial land sellers are open to negotiating price and/or carrying paper (seller financing) as long as there is a significant down payment. Currently, we have excellent “raw land” properties that can accommodate businesses ranging from a small hotel-restaurant (listing #224) and one of the best “large commercial” pieces on the Costanera (listing #312).

Or, buy a landmark!

surf-shop.jpgUntil just recently there were very few businesses to buy in the SPZ. Over the past five years, the ticos and early bird gringos have successfully (more…)

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December 21, 2008

Help for Buyers and Sellers Takes a Big Step Forward

Filed under: Ethics, How to buy, Info & How To's, MLS, News — Tags: , , , — Ben @ 4:36 pm

3d_handshake-250.gif

Imagine this: you are interested in buying a piece of property in Costa Rica’s southern zone, so you walk in to one of the real estate offices in say – Uvita. You consult for awhile with an agent there. (For the sake of this article, lets call him “Ben” :o ) and off you go looking at properties that fit your interest.  After looking at all that Ben has to show you, nothing strikes you as the right piece (hard to imagine, but it has happened a time or two).

So far not a lot of imagination has been required.  Here’s where it gets a little more difficult.

Ben says: “how ‘bout we pop on down to this other agency, some competitors of mine down by Ojochal, and see what they’ve got” or “Let’s go on up to an office of my peers in Dominical that’s been around for years. They’ve probably got a few listings that I don’t that may be a perfect fit”.

I know – hard to imagine, but stay with me here.

Last Saturday marked the 2nd meeting of… well frankly I’m not sure what.  I’m not being evasive – we actually don’t know what to call it: Costa Ballena Realty Board? Association of Real Estate Professionals?  There were a few other names tossed about: Think Tank, Master Mind Group, Coffee Talk… whatever it ends up being, it holds the key to making the real estate buying and selling experience in our zone 10 times better than what it currently is.  (I like “Unified Realty Professionals”.  This could have the distinguished acronym URP which would be said something like – well, like ‘urp’ which would bring to mind the satisfied feeling one has having just enjoyed a good meal.)

Ojochal, Uvita, Dominical, Hatillo Platanillo and San Isidro are the towns that make up “The Zone”.  There are numerous real estate agencies in these towns. Some with recognizable names from other parts of the globe such as Coldwell Banker, Century 21 etc…  Then there are the “no namers” such as yours truly with Dominical Dot Biz Select Properties, and there are many such private label real estate companies.

The objective of the meeting was to improve our ability, as a unified and cooperative group, to serve people who want to either buy, or to sell property in our zone.  This is a beautiful, and much needed thing.

The meeting was attended by the owners of Osa Tropical Estates (Ojochal), two of the Coldwell Banker partners in the Dominical office, The Land Company (Dominical) principal and myself (Uvita).  We all have knowledge of all areas of The Zone, but have greater expertise in some areas over others.

Problems Identified:
It was agreed that the non-MLS (Multiple Listing Service) business model in Costa Rica makes it difficult for sellers and buyers.  The core problem is the lack of REPRESENTATION available to our buyers and sellers.

Buyer’s Problems:
When a buyer spends a day or two with a single realtor looking at property, they are only seeing what that particular real estate agency has for listings.  To really know that they have seen everything, a buyer would have to (more…)

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December 5, 2008

Uproar Over Project Shut Downs

Yesterday started off as a typical, glorious Costa Rica morning. Rod and I got an early start with San Buenas Golf Resort Project Manager Larry Breau, walking the golf course project. This involved a drive from our Uvita Costa Rica office towards the south about 20 minutes. There was a slight delay in travelling south due to to ICE (pronounced ee-say), which is the monopolistic agency here in Costa Rica in charge of telecommunications. They are running a new grid of lines to accommodate the rapid growth in the zone. No problem, just a 5 minute wait.

We had a full morning of rubber boots, machetes, broad rimmed hats and a liter of water reviewing the project.

In driving back to the office we encountered a line of cars backed up. Thinking it was ICE we sat patiently waiting. A number of people had turned off their cars and were milling about in the road, talking, some with exaggerated arm gestures. One gal walked by and upon seeing the lighter shade of our skin (assuming that meant English is spoken) she approached us and asked what the hold up was. We very authoritatively informed her what was going on with ICE. Turns out we were dead wrong. This was a road block caused by angry protesters out in front of Crystal Ballena, a local hotel and restaurant where a high level meeting was in its second day.

Costa Rica government officials met with developers and the local Osa government departments to discuss some of the project closures that were the result of an inspection sweep (more…)

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December 1, 2008

Do You Have to be Rich to Buy Land In Costa Rica?

I received the below e-mail last week and have been working with “Jim” (name is changed to protect…).  His situation is one that I think a lot of folks will be able to relate to. Pic of money in hand

Reading through your blog it appears that purchasing a home or property in the southern zone is now just for the wealthy. Those who have 5 or 6 other houses and for which one more is just another investment. There are those of us who would like to make Costa Rica our new home and leave the corporate hassles behind. We just may not have the $300K – $1M in cash for such a move. What do you recommend for those of us who are a little ahead in the US real estate game and are looking for a quiet, secluded, place to raise some fruit, veggies, etc. and settle down?

Nicely put, and meaty. I wrote back:

I hate to do this to you, but I’m going to answer your question with some questions. Nearly all of our deals here are cash deals. What amount of cash (more…)

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August 6, 2008

Costa Rica Corporation Clarity

Filed under: Golf, Info & How To's, Taxes — Ben @ 3:36 pm

I think that in every real estate transaction that I have been involved in here in Costa Rica, the buyer has opted to use a Costa Rica corporation to purchase the property. I have explained the pros and cons various ways when asked, but I don’t think that I have ever put it as well as an e-mail that I was just copied on from one of the San Buenas Golf Resort partners. I include it here for the benefit of readers of this blog.

The bottom line is you should always conduct business in CR via a corporation. There are definite tax and liability implications. Canadian residents are lucky…any income earned outside of Canada is not taxed by Canada. The US is different, all income, regardless of where it is earned, is taxed. CR and the US do not have a tax treaty, so you will pay the CR government 30% and the US government 35% if the shares are in your name.
(more…)

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May 26, 2008

A Day in the Life of a Costa Rica Real Estate Guy

Filed under: Info & How To's, MLS, Processes — Ben @ 10:10 am

A great example of how to go about buying a piece of land in Costa Rica

I thought that it might be interesting to catalogue the recent visit, well actually the current visit, of The Smiths. Their visit is very representative of what are perhaps the bulk of my presentations. From their upper budget limit of $200,000 for raw land, to their purpose for the purchase: they hope to relocate to Costa Rica in the coming years, a consideration of their experience will likely be a help to other who are looking to buy land in Costa Rica.

Using the Internet, Mr. Smith did the research on the Dominical and Uvita area real estate agencies and their listings. Mrs. Smith studied the geography of the area and what the various zones are called. They wrote to me asking for 3 references, which in fact isn’t so representative of what most prospective buyers do, but I think is a very smart idea.

To digress for a minute, all us real estate folks down here in Costa Rica are not licensed. There is no policed nor enforced procedure for buying land in Costa Rica. Consequently, (more…)

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