Guys In The Zone: Costa Rica Real Estate

CAP Meeting in Uvita

The Zone's Effective Anti-Crime Effort

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.

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

The inspiration for this post came from a recent article fed from LinkedIn.  The title was “38% of Homes Purchased in 2011 Bought with Cash.”  I thought to myself, 38%?!  That number seemed high, so I did I little more research.  According to another article in USA Today, that number was as low as 12% just three years ago thus confirming a significant jump in cash purchases. According to the article, investors in the U.S. are keenly tuned into yield or ROI.  That return on investment is realized through improving and flipping properties or some variation of a rental/income strategy.  The latter has become increasingly popular for those foreign retirees and families who are looking to relocate here.

Got Financing?

All of that got me thinking about our Costa Rica real estate market.  Land purchases financed through a Costa Rican bank (at least in The Zone) was virtually unheard of when I started back in 2006. For a variety of reasons, most buyers had cash before the downturn.  Four+ years later, the picture is very clear.  Property values around the world decreased (dramatically in some areas), and buyers couldn’t use the equity in their homes, not to mention the banks tight grip in their purse strings.

Recently (think- the past two years), we’ve seen an increase in the number of buyers who only have a portion of the purchase price.  These new buyers, typically foreign investors, need the seller to carry paper.  For those new to real estate investing, carry paper means the seller is willing to finance part of the purchase price and receive payment (often with interest) over time.  This legal arrangement is completed by a lawyer in the form of a trust or a mortgage here in Costa Rica. If the buyer defaults on the terms of deal (e.g., misses payments), a legal process can be initiated by the seller… just like a bank in a foreclosure process, although quicker. For more information on this topic, check out our article on Seller Financing Opens The Door To Home Buyers.

I don’t have a number, but I’d bet the number of non-Tico bank-financed purchases in the area is less than 1%.  Interest rates on Costa Rican bank loans, when you can get them, are more than double what you currently find in the States.  There are various reasons for it, but I’ll leave that for another article.

The good news is… buyers need financing and some sellers need to sell, so seller financing continues to increase in The Zone.  Some deals don’t even include interest, simple an extended term to complete the sale.  When there is interest and an extended term involved, the number of years almost always tops out at 5 years.  There are real estate transactions taking place in The Zone primarily because (1) land values are now around half of peak values and (2) both parties are getting creative, as described above.

There are a select few (and I mean few) who are flipping houses here in The Zone, however, many investors are looking for income generating properties, both hotels and vacation rentals.  The yield varies greatly, but there is opportunity to make a nice living in the hospitality here in The Zone.

But, What Does All Cash Mean For Buyers?

It means you need to think of Costa Rica, at least for the time being, as a place to land bank or move your cash. There are economies and currency (think- Europe and the Euro) with a cloudy future.  The current wave of concern is so real, we have recently seen an uptick in European investors and relocators contact our office.  Without getting metaphysical, I also wonder how much 2012 is playing into people’s decisions. We call this group “End Of The World Buyers.”  Good and abundant water sources, good environments for growing crops, and pleasant temperatures throughout the year draw these type of buyers to Costa Rica and our area in particular.

Whether this trend continues or declines remains to be seen.  Simple put, Costa Rica, especially the Costa Ballena, is a wonderful place to relocate for both economic and lifestyle reasons.  There are many, happy foreigners living either full time or part time in Costa Rica.  If you are interested in why so many expats are buying and relocating to The Zone, this article Why Buy Property In The Zone offers a few of the top reasons.

Disclaimer:
This article will serve as an update to what is happening in the golf project here in The Zone. The name has been changed to protect the innocent. Guys In The Zone is a real estate agency. We make our money on commissions paid by sellers for sales that we broker. Buyers of land sometimes operate on the mistaken notion that if they go directly to the seller, they will get a lower price because of there not being a commission involved. Even though the price paid is the same either way, we still have to deal with this thought process. So I have changed the name of the golf resort to Guys In The Zone Links or GITZL, which has a nice ring to it anyway. This way, if buyers are intrigued by what they read here, and they do a Google search for the golf course, they’ll just come full circle back to us, and we can then broker the deal.  We make money, and they get our representation in their purchase of a  golf course property in Costa Rica’s southern zone. Everybody wins.

Yes, there is golf in Costa Rica's southern zone.

It could be that the Guys In The Zone Links (GITZL) is heading for one of those “critical mass” experiences. The resort has been there, going through the Costa Rica labyrinth of disorganized bureaucracy for the past three and a half years.  As GITZL emerges, we see other such projects in Costa Rica languishing in the throes of various obstacles:

• a global economic crisis
• conflicting philosophies among founders
• lack of funding
• a nearly impossible Latin American permitting process
• etc…

For the thirty-some land owners in GITZL, who bought untitled land years ago, the titles are almost in. I know what you’re thinking: “Haven’t I heard this before?” Hmmmm, yes, I believe you have heard this before. So, we’ll see. However, at this point, and this time around, all permissions, permits, signatures, departments, laundry lists and handshakes have been made, acquired, stamped and clamped. There is no logistical obstacle and they are now just simply waiting for the documents to be delivered.

GITZL has not paid one colon/cent under the table to achieve its current fully permitted status.

I used to be a shareholder in GITZL and I used to sit on the board of directors there. All of that changed when the GITZL Corporation was unable to make its mortgage payments. Instead of folding and hurting all those who put their belief in the words of dealers (such as yours truly), and bought untitled land there, the shareholders got together and prioritized… -(now prepare yourself. We are talking here about behind the scenes corporate maneuverings, in an effort to make vast sums of money) – the wellbeing of those who had bought land in the project. The shareholders, at personal expense, allowed the project to go to the primary shareholder without a struggle. This primary shareholder, of his own volition, felt that it was important to protect the land owners there, that their ownership would be recognized and guaranteed.

I know, you’re thinking that you have stumbled upon a science fiction account of life on another planet. But you haven’t, and this is not. What you are reading is a firsthand account of my observations over the past 4 or so years. I am also one of those shareholders who lost in excess of $100k in the process (but who knows? The fat lady has not yet sung.)

My recent re-involvement in the project was inspired by one of our unexpected leads that came to us looking for a hotel plot. These prospective buyers really want to be able to offer golf to their guests as well. Their idea was to purchase a piece of land that would accommodate not only the horizontal hotel layout, but also nine holes of golf. There really is no such property left here in Costa Rica’s southern pacific zone. Enter GITZL.

There is a piece of land in GITZL that is slated for a hotel. It has been thought that one of the big franchise hotel names might approach GITZL and ask if they can put one of their monolithic hotels on it. (This Costa Rica real estate blogger is hoping not, but that’s just me putting in my unsolicited, tree hugging two cents.) Lord knows it would be a financial coup for GITZL. But in keeping with its surroundings, and even the design of the project, a more intimate layout of free standing bungalow villas sprinkled around a central restaurant / lobby would be more appropriate.

Locations of hotel plot and finished model condominium - Click to enlarge

This all coincides nicely with what our European investor was/is looking for. His budget easily buys the land allotted for the hotel, valued at two million USD.

So, we’ll see what happens with that deal. Presentations are being made in various offices in London and Malaga, and so we wait. The point, however, isn’t to crow about The Guys good fortune to have such a prospect, (although we are certainly to be able to crow about such things.) But all of this is about re-connecting with this odd little golf project here in the nether reaches of Costa Rica’s southern pacific zone.

Paspalum is a fancy name for grass

The place is beautiful. The existing nine holes roll around gorgeous Costa Rican trees and fauna, and are vibrant with an amazing array of birds and, well, life. Look anywhere on the course and you feel like you are observing a contrived setting, staged for some international golf magazine, complete with white sand bunkers.

The paspalum grass is a marvel. I witnessed a small tractor pulling a liquid tank that was spraying a fairway. Expecting to be told that this was an herbicide, or some such chemical, I was told that it was salt water. Weeds die in a saline environment, Paspalum thrives. Hmmm, can we use the overused “green” handle here? If so, I imagine myself making a presentation there, standing alongside one of the holes, able to say “and this is a truly green green” – get it? Ok, I know. I should apologize – but really, what is the point of being alive if we aren’t going to live, verdad?

So the weeds are handled without chemicals, what about fertilizing and bugs? Enter the ultra-acid soil of Costa Rica. The antidote is lime, or calcium. Mix this into the soil and you manage your PH, while driving off any pests. The little blighters thrive in acid but not in a balanced PH environment. So yes, I believe we can call this project green.

As for the Critical Mass mentioned at the outset, I just wonder if, as the GITZL folks quietly go about their business out there, if one day the world doesn’t wake up and there is a mad dash to be part of this amazing project. They’ve got a show condo – 2 bedrooms, granite counter tops, all teak wood ceilings, cabinets and furniture for $219,000 – a price that would have been impossible to believe prior to the economic tumble.

I suppose this could come to be viewed as the upside of the downtime – (OK – sorry about that one.

Facebook: www.facebook.com/guysinthezone

We'll see what the year 2012 brings to Costa Rica's southern pacific zone.

November 28^th, 2011 marks the start of the high season, speaking from the perspective of the Guys In The Zone here. However, in the few inquiries that I have made, it is apparent that there was a definite up-tick in sheer numbers of people in The Zone starting on that day, just a little over a week ago. Here’s what we’re seeing around the Guys office.

Lots of Sellers

We were focused on getting our property data based fleshed out over the last couple months of the rainy season.  Rod & I thought we were doing pretty well, taking advantage of the rains, and the quiet time in Uvita and Dominical to get all of our properties in order.  We have come to discover that there is no room for being smug on this front. We are nowhere near caught up with our sellers. We have quite a number of sellers that come down to Costa Rica every six months or so to visit, play, unwind and take care of property matters. This influx of sellers coming by our office, and working with them in various matters pertaining to selling their property has clearly indicated to us that we are in a Buyer’s Market here in Costa Rica. We have LOTS of excellent properties for sale at great prices.

Lots of buyers

The problem with all of these sellers coming in, is that we also are experiencing lots of buying activity. This is great for the coffers of the Guys In The Zone, but it makes for the need for Rod & I to get ourselves cloned, which we are not inclined to do, so we are simply running as fast as we can to be able to accommodate.

Buyers Profiles

Profile 1The global economic crisis seems to have inured to our benefit.  People are saying “I’ve had it” with wherever they may live (lots of Europeans in the mix, as well as Canadians and US’ians) and making the move to Costa Rica. A rather new buyer’s profile for us are the younger families that are not in the financial condition to move to Costa Rica, at least in the old “retiree” manner. These younger folks are coming here as a direct result of unpleasant conditions “back home”. So, they are looking for income generating properties.  Over the last month or so, Rod & I have dealt with about 3 of the following type requests.  These buyers are looking for:

• An income generating property
• Room to build several cabinas
• Room for a small restaurant
• Room for a main living abode for the buyers
• Budget of $200,000

The Esquinas property sold, removing from the front window what was clearly the most talked about property in our office.  We now have another couple of options for these requests, but this is a VERY tall order. We are expecting what properties there are that can satisfy these criteria to be gone by season’s end. Here is the new HOT relocators, income generating property: Pequena Luna

Water at the End of the World

Profile 2 End of The Worlders Last week I worked with prospects that want 100 hecs, lots of water, land to farm, and big view. Their budget is 1,000,000 Euros ($1,350,000 USD). They are looking to being self-sufficient, to the point of providing their own food, water and electricity.  We may have hit pay dirt with some amazing ocean view property up in the mountains around Uvita.

Profile 2b This next one doesn’t fit in the End of The Worlder’s category, but they are certainly an interesting indication of market conditions. There aren’t enough of them to credit them with their own profile, so they are abbreviated. An investor’s group from Europe, looking towards doing an interesting, very green hotel with some activity attached to the hotel, like a golf course, or some other. The budget on this one is multi-millions.

Old Standard Property Buyer Profile In addition to these rather impressive profiles, the old standard is still there – the retirees looking to move to Costa Rica and enjoy a lifestyle with less of the frenetic pace and media saturation of the “developed world”.  It seems that the economic downturn has had an effect on this seemingly bullet-proof group of prospects.  Whatever plans they made in their lives for retiring: 401K, IRA, market portfolios etc… things have simply changed, and now the thought of generating a bit of income with what they do here in Costa Rica is of interest.

Rod is currently working a deal in progress on an amazing listing that we just got here in Uvita that is just a short ways up the hill behind Uvita. The property measures just under an acre and has a gorgeous and expansive ocean view. $90,000 on this one.  Even if this first round of negotiations doesn’t go through to close, I have little doubt that it will go quickly.

Rod is also working a gorgeous ocean view lot down in La Perla Ballena, which is south of Uvita about 5 – 10 minutes. The asking price on this one is $165,000 (back to business as usual). The buyers offered $115,000, the sellers have countered at $150,000. The buyers are cogitating on this.

We’ll see where it all goes. I include these rather mundane details of our lives here because I think that these points help you, dear reader, to know how it is here now. What the feel is here in U-town and in the southern zone. There is more, and it would seem, serious, talk about the international airport having its funding. This may actually be a reality about to happen. Heaven knows why people need to fly into the southern zone of Costa Rica, but it would seem that this is what “they” want to do. The implications of this to land values is interesting.

I’m getting close to my self-imposed blog-limit of 1,000 words so I’ll leave you with this. I went out to the San Buenas Golf Resort today, and I’m blown away.  More to come on that front.

Regional to International, the Osa Airport Dilemma

A week ago, I was reading the Tico Times and the headline “Liberia Airport Renovation Nearly Finished” jumped out at me. It’s only been nine years since that airport opened, and now it’s getting $41 million dollars worth of renovations?? I had to figure out why, if only because it might offer a flash forward to what we can expect when (emphasis on “when”) the International Airport opens up in the The Zone, also known as, the southern Pacific zone of Costa Rica.

Long Lines

Whether it’s checking into a restaurant, hotel, or airport… people do not like to wait, especially when the line stretches out the door. Long lines and airports are synonymous, but the leaders at Liberia International (and the Guanacaste business owners) have figured out that a bad traveling experience doesn’t inspire repeat customers. The Liberia airport is scheduled to re-open any day now, and just in time for the tourist season.

The Profitable Impact

Did you know that 225,224 passengers arrived at Liberia’s airport last year*? That’s an average of 18,768 people per month and just over 625 per day. In January, foreign visitors in Guanacaste, increased by more than 28% over January of 2010. With the upgraded facilities (think mini-Juan Santamaria), services, and new carriers (JetBlue, Air Berlin), they are clearly anticipating an increase in arrivals in the near future.

The Liberia airport has done wonders for the development (read- boom) of Guanacaste. Not only does the airport employ hundreds of people from the community, it also stimulated new business opportunities in the immediate area, including— hotels, car rental companies, and commercial centers.

Conversely, there can be, and usually is, a relative downside to rapid development. Have you been to Tamarindo lately? I went two years ago, and the sleepy beach town I visited in 2002 was almost unrecognizable. The main strip looked like it had a SoCal facelift, the renown beach break was packed with surfers, and I found myself longing to be back in quiet and verdant Zone.

How It Relates To The Zone

The second most popular question we get is “When is the International Airport in Palmar going to open?” My answer: “I have no idea.” It’s not that I don’t read up on the subject, it’s just difficult to believe the words of Alberto Cole or the Minister of Tourism.

As I mentioned in an article a year ago, the construction of this airport goes hand in hand with the construction of new hotels. (At this point the area doesn’t have enough beds to accommodate an extra 400+ people/day in The Zone… especially in the high season.) Adding small to mid-sized boutique hotels isn’t an effective and complimentary plan. For the airport to be viable, large 100+ room resorts will need to be built and one need look no further than Guanacaste and its growing pains to be concerned.

To date, Ben and I have not heard anything concrete regarding new resorts in the area. Taking that one step further, there are only a handful of residents who want this airport to be built. Simply put, the majority of people who most desire this new International Airport… are people who don’t live here.

Tiger Heron in the Osa Peninsula

The Ecological Impact

Some of our reader saw the recent article in the Environment section of the The New York Times. The article outlines the potential ecological impact on the Osa Peninsula, an area that boasts 3% of the World’s known biodiversity. The author writes, “Construction is planned in two phases from 2012 to 2016… (initially) designed for 50 passenger planes.” IF (notice the big IF) that timeline is accurate, there will be a global blast of articles and special features, then… an influx of investors. Real estate and development markets will surely be stimulated, and these investors and relocators will have a large raw land inventory to choose from when they do arrive.

As real estate experts, Ben and I are standing in the path of progress and we are experienced “tour guides” in Costa Rica real estate. However, like the majority of people who move to The Zone, we also love our small town community and the postcard paradise that surrounds us.

* Costa Rican Tourism Institute

This is our mid-year review of real estate in the Southern Pacific Zone of Costa Rica. With tourism numbers up 11% in Central America, Ben and Rod discuss how this trend points to a brighter future for The Zone.

Costa Rica Real Estate – Talk Show 13 by GuysInTheZone

So, the Guys have moved, once again.  We are now located in the commercial center across from

Guys In The Zone New Real Estate Office in Uvita Costa Rica

La Corona and Banco de Costa Rica.  We’re right next to Sonia’s Uvita Information Center.  If you are checking out at La Corona, and you look to your right across the street, you’ll see this image –>

So, why’d we move?  Well I’ll tell you, and in the process you’ll not only get an idea of what rents are going for in Uvita Costa Rica, you’ll gain some insight into the basic differences between men & women, so read on!

We moved from the second floor spot we had because we found that prospective clients simply didn’t want to go upstairs.

The capper was when I noticed that my gal Natalie would come to the parking area and call me on my cell phone.  I asked her why she did this.  Why didn’t she just come on in and talk vis a vis?  She said because she had a sun dress on and so Continue Reading

Property Values In The New World

It would seem that life has settled into a routine now in our “new world” setting here in Uvita Costa Rica.  What’s it been, 2 years since the global economy went into the stink house?  My how time flies.  Our real estate company is cooking right along actually doing some business.  The business that happened so rarely during the recession was mostly for under $100k  lot sales and $300k was the upper edge of house sales.  The prices in our market have dropped 40% – 50% across the board.  And there are still some highly motivated  sellers out there.  I’ve started a list of these sellers.  Originally I was going to call it the “Desperate Sellers” list, but I have re-thunk it and come up with the “Motivated Sellers” list.  Right now I’ve got 5 properties on the list.  The top deal there at this writing is the 57 acres farm in Uvita for $250,000.  Click here if you’d like to check it out.

The point is that the market has definitely re-defined itself and numerous sellers are adapting.  We went through a time here in The Zone when it was pure death, nothing sold and there was no one looking.  Some real estate offices closed down and others (like GITZ) tightened their belts and survived.  Now we are watching and learning what the new world looks like.  Here’s some of what we’re finding out.

Money is tight (duh!).  But, there are buyers here, and they aren’t just the $100k lot or $300k house buyer variety.  There is a recent sale of a Lagunas house for $750k and an Ojochal house at $850k, so we seem to be breaking out of the old restraints.  This isn’t to say that things are hopping again here in the zone, but they are a sight better than they’ve been for a couple of years.  The Guys In The Zone are enjoying doing some business, but again, it’s all been for steeply reduced pricing.  We had a client come down looking for a $100k ocean view property, of which we have some to show, but these clients morphed their criteria while here, and were enamored with some very fine properties at great prices.  End of the story? 2 lots at just a little over $500k.  If you’d like to see what the properties were, click here for one, and here for the other.

Conversations about current values abound.  Methods for establishing the values Continue Reading

The Guys are doing quite well, thank you very much.  We are currently made up of 4 official Guys, as well as a smattering of several honorary “Guys”.

Ben - Living the Life

My name is Ben Vaughn and I am no longer the oldest Guy, since Chan has made his business acumen available to the Guys on a consultant basis, and he is older than I am.  Rod & I are the originators of Guys In The Zone and we have now also been joined by Richard, a very welcome presence in the Guy’s office as he brings his enthusiasm, energy, and of course, solid business practices into the fold.

Our office is located in what is now known as the BM Supermercado (Supermarket) building. We are where the Rainforest Internet Café was located. If you go to the south end of Uvita, and look to the left (inland) side of the highway, you’ll see our blue spiral staircase in between two rather garish yellow background Farmacia signs.

We stand a good chance of moving to a ground floor location over next to the Marino Ballena restaurant. Stay tuned on this, but if we do, we’ll be just that much easier to find.

Richard - Guy In The Zone

We, like the other agencies in The Zone, are gearing up for what promises to be a rather busy “busy” season.  Our business barometers are the vacation rentals and hotels, who are all saying that their bookings are strong for the coming season.  We are setting up property viewing appointments and understand from our competitors that they are doing the same.

The general feeling is that we have endured the worst of the global economic downturn.  It is felt that our world has definitely changed here in Costa Rica, just as it has in

other parts of the globe, but that there is a newly defined and emerging system taking shape.

Basis for Optimism

At the very core of any successful market is the element of human

Rod - Happy Living

desire.  You can analyze a market every which way, but if the product or service lacks a strong appeal, it is likely going to do nothing more than flash (as a result of a marketing effort) and then burn out.

Properties in Costa Rica have always had, and continue to have, a strong desirability.  Couple this with a return to much more affordable prices, and you get what we feel we’ve now got, a genuine, non-boom real estate market place.

We aren’t looking for the white-hot action of the early to mid 2000’s.  We are looking for buyers and investors who peruse our online listings, e-mail us, come into our offices and shop what is available to initiate what for many, is the achievement of a life-long goal – moving to, and owning a property in, Costa Rica.

It is interesting that we seem to be returning to some of the demographics of years past.  We have been working with people that have 3 – 7 years as their projected timeframe for moving to Costa Rica.  It may be that retirement is on the horizon or kids will be getting out of school, or there might be an aged parent that needs care, and so on.  These folks come down now while the prices are low, and secure their property.

At the risk of repeating what I’ve written before: there are 5 basic reasons why people buy property in Costa Rica:

1. Relocation to be a full time resident
2. Migration lifestyle.  Live part of the year in Costa Rica and part elsewhere.
3. Income generating property. Use it as a vacation getaway that rents out when you’re not here.
4. Land bank.  Buy land at a good price, wait 5 years and sell it at a reasonable rate of return.
5. Build a community, retreat or family compound.

This last point (#5) has been enjoying a surge of activity as of late with what I like to refer to as the Escapists.  These ones generally are looking for larger parcels of land that can accommodate numerous structures.  These folks predict a crashed economy or currency back home.  Or an un-payable national deficit promising increasing tax hikes. Or simple uncertainty of what the future holds as society’s former standards and immortal icons topple and go by the wayside.  Going off-the-grid is frequently in the mix for #5. Oh, and the year 2012 prophesies helps a bit with this group as well.

What’s Selling

Our message to sellers is always the same.  If you want to sell, you have to lead the market in lowering your pricing.  There are basically 2 groups of sellers: those that know they have to lower their price in order to get listed with the real estate agencies, and those that REALLY have to lower their price in order to convert their land holdings here in Costa Rica into cash.  These are motivated by the need to protect something “back home”.  It is this second of the 2 groups who is mostly selling here now.

We are enjoying the re-appearance of under $100,000 ocean view single family lots.  These were gone for a number of years as the ocean view category’s bottom pushed up to somewhere around $150,000. Good quality houses in the $300,000 to $400,000 range are selling briskly.

There are some gorgeous luxury homes on the market but activity is soft in this category.  One could say it is a great time to buy a luxury home in Costa Rica’s southern pacific zone.

This is an interesting category since there are definitely capable buyers around, but the availability of credit is low. If a buyer is liquid to the tune of $1,000,000 or more, they may be reluctant to spend it in a single acquisition.  Consequently, we feel that seller financing is going to play a larger role in the coming season than ever before.

The Guys are enjoying life, and are here to serve.  Please let us know if we can help you achieve your goal of making Costa Rica your home.

Is the price commiserate with the worth?

“I need to sell my property.  What should I price it at?” is the common question heard in our real estate office in Uvita, Costa Rica.

“Whatever someone is willing to pay” is the universal response that drives the free market evaluation system the world over. However, is a price that is determined by this method a clear indicator of a property’s worth in Costa Rica?

The obvious answer is “of course”. However, in this uncertain world we live in, even this un-arguable standard of evaluation is sometimes brought into question and results in what can be described as quirky or illogical scenarios. Continue Reading