Guys In The Zone: Costa Rica Real Estate

August 29, 2010

Tour Costa Rica, Buy Southern Zone

Filed under: Culture, How to buy, Land For Sale, Relocation — Tags: , , , , , , , , , — Tigre @ 4:15 pm

Answer: 98%.  The Question… what percentage of people first visit Costa Rica as tourists before buying their own piece of paradise?

Uvita's Whale's Tail formation taken from Escaleras.

Costa Rica is attractive as a vacation spot, for retirement and investment, especially in this “buyer’s market.”  In particular, the Southern Pacific Zone (and I’m talking about the area south from Quepos to Palmar) has a number a factors that set it apart from the rest of Costa Rica—the mountains-to-the-sea geography, sunset ocean views, the verdant jungles, and the protected habitats.  In addition, up and down this coastal region, resident Ticos and foreigners from all parts of the world enjoy a “small town” community feel.

For those who haven’t been down to The Zone (as we like to call it), there are small differences between the small towns in this area–

  • DOMINICAL–  Many of the visitors who choose Dominical as a home base are surfers or other people who want to be within walking distance to the beach.
  • UVITA–  Those who choose Uvita have either already explored Dominical or want to be close to the famous Whale’s Tail and boat launch for whale and dolphin tours, snorkeling and scuba diving adventures.  Simply put, the magical nature of these activities brings people back, year after year, in increasing numbers.
  • OJOCHAL–  Located 15 minutes south of Uvita, Ojochal is one of the more established expat communities.  Originally, the coastal road only came as far north as Ojochal, hence the pre-Costanera wave of development starting in the late 90’s.  It is known as the multi-cultural hub of The Zone and home to an amazing array of culinary options.

The Zone has received a flood of publicity over the past four to five years.  Heralded as one of the world’s eco-tourism hot spots, most tourists come to our area excited by the likelihood of seeing exotic animals up close and personal.  In fact, groups of monkeys and toucans make daily visits to our property and most of the eco-hotels in the region.

Boom Markets

Another reason for the area’s popularity, one we have written about extensively, is access — the completed Coastal Highway, the improved road from San Isidro, and the proposed International Airport in the Palmar/Sierpe area 40 minutes south of Uvita.  According to the Instituto Costarricense de Turismo, tourism is up 9.6 percent for the first half of this year compared with 2009.[1] Perhaps the stimulus package in the U.S. and Europe is working?  (That was a joke.)

We only need to look at the effect of the new international airport in the Guanacaste region—131,295 tourist arrivals in the first half of 2010[2]— to understand why tourists, retirees and investors flocked there.  Thanks to the ardent publicity of television, print, and web advertising (e.g., International Living Magazine), there was a tourism and real estate boom in the first part of this decade.  The first part of 2010 is no different, as activity is up in this buyer’s market.

The Painful 2%

As for the two percent of property buyers left out of the original answer (in fact, they are the group who sparked this article), there are actually foreign investors who buy property sight-unseen.  Just in case you are not familiar with the term, it means buying land without physically seeing what you are buying.  This often happens when prospective buyers attend marketing seminars that pitch only one or two specific developments in an area.  The simple reason for this is… these marketing specialists are often The Developer!   They lure prospective investors to Costa Rica with attractive incentives like “fly and buy” programs, where discounts are applied to immediate land purchases.

There are potential problems with following this developer’s path to your future paradise.  Here’s a common scenario; you finally arrive at the small, regional airport in Costa Rica.  You meet your bilingual feet-on-the-ground sales agent/tour guide/driver.  He explains you have a full and exciting week ahead—dinners, outdoor activities, and multiple tours of the developments— so full and exciting that you never really have time to look around and get an objective view on land values and investment opportunities.

BEWARE… their bottom line is to sell you property in their developments.  I can’t tell you how many “seminar buyers” (most of whom are from Canada?) come to us after the fact and are shocked at the real market value of their land… and this was when the market was still strong.

Ben in the field with a client.

Pure Brokering

There is a simple way to avoid this investment pitfall.  Most of the real estate agencies in the area offer what we “Guys” like to call: pure brokering.  I use the word “pure” to indicate what Ben & I like to do.  I guess you could say, it’s the Guys In The Zone style.  First and foremost on our agenda is: “find you the most ideal property that fits your objectives” – pure brokering.

People ask us daily how the market is doing, and if you’ve been tuning into our Talk Shows for the past couple of years you know the market here has reflected the global market’s trend downward.  Markets go up and down… that’s just a fact of life wherever you are.  Ask any of the real estate companies in the area, activity is up… and this is typically our slow season.  It feels like we have hit the bottom, and this high season (Dec-Feb) is expected to live up to its name.

There are a variety of factors that make The Zone an attractive place to vacation, invest, and eventually retire.  And let me tell you, the only thing better than watching a flock of toucans hopping in the trees… is when you are watching a flock of toucans hopping the trees on your own property.

[1] http://www.amcostarica.com/thursday.htm

[2] http://www2.prensalibre.cr/pl/la_economia/28972-ingreso-de-turistas-aumento-un-96-en-primer-semestre-del-ano.html

July 26, 2010

Education In Rural Costa Rica, Part 2

Filed under: Relocation — Tags: , , , , , , , — Tigre @ 6:16 pm

[This article is a continuation of Education In Rural Costa Rica, Part 1]

Bilingual teacher offers a hands-on lesson.

Private School

Simply put, the reason most tico families do not send their children to private school is the cost.  The best private elementary school in San Isidro runs around $275/month.  Even by gringo standards this can be viewed as a lot of money; however, most parents understand the benefits are significant, like— bilingual studies, text books, well-equipped teachers and classrooms… to name a few.  “After school” extra-curricular activities often include— art, dance, and sports.  These creative activities teach kids so much more than memorizing dates in history.  They prepare them for life beyond the farm, should they choose to pursue it.

To give you an idea of how “private schooling” has become synonymous with success, there are currently 6 public and 60 private universities in Costa Rica.  The southern Pacific region is fortunate to have the Int. University San Isidro Labrador, only 45 minutes drive time from Dominical.[1] According to StateUniversity.com, “…higher education is free for nearly 50 percent of the enrolled students.” My guess is that scholarships are a significant part of the aforementioned $2 million (6.3%) of budgetary spending on education[2].

The task of the modern educator is not to cut down jungles, but to irrigate deserts.
– C. S. Lewis

Escuela Verde

The increase in private universities is a good sign for the future of the Costa Rica, but what about options for the parents of younger kids?  Let me share a quick story about Escuela Verde, a new private grade school that opened in 2009 in Uvita.  The school was founded by a couple of parents who were unimpressed by the public school options in the area, and their mission statement is clear,

“Escuela Verde prepares children to be resourceful and independent while inspiring them to give back to their multi-cultural community and the natural environment.”

After securing a building in Uvita Centro, they quickly rallied support from the parents and community.  The teachers follow guidelines for Costa Rica and U.S. grade level guidelines, and many subjects are taught in both English and Spanish.  Unlike many of the public schools, the kids are even responsible for completing regular homework assignments.   They even have scholarships for tico families that want to expose their children to the best educational option available in the area.  It is my understanding that they already have a long waiting list.  For more information, you can go to Escuela Verde’s website.

A Melting Pot Of Ideas

Compared to crime and politics, education does not receive a lot of publicity in the media.  However, it is a hot topic for parents who want to make Costa Rica their new home.  Perhaps the best news I can offer our readers and potential clients is that the Southern Pacific Zone of Costa Rica is a melting pot, ala the United States of the 19th and 20th centuries.  A blend of ideas, talents and energy has created a lively, international community… one that is keenly focused on sustainability, preservation, and education.

[1] http://education.stateuniversity.com/pages/300/Costa-Rica-HIGHER-EDUCATION.html#ixzz0ix0kJIPU

[2] http://www.ticotimes.net/dailyarchive/2008_09/090208.htm#story1

May 8, 2010

Rainy Season In Southern Costa Rica

Filed under: Info & How To's, Relocation — Tags: , , , , , — Tigre @ 4:34 pm

With the rain comes the color...

If you’ve listened to our recent Talk Show #7, you have heard us convey how much we enjoy the rainy season down here in Costa Rica.  As Ben mentioned in that video, “Four out of five people who live here would probably say they prefer the rainy season.”  (Disclaimer- this estimate is not based on scientific data.)  However, there are those visitors to our blog and websites who see the rain as a deterrent for buying here, a sentiment that serves as my motivation to write this article.

First, the rain here is different than in most areas of North America and Europe.  It doesn’t bring a shiver to the bones; it’s refreshing and a welcomed break from the heat.  Warmth is just one of many characteristics that make this tropical precipitation so vital and so magical.

Six Months Of Rain?

Climate is a significant factor for most buyers when determining where to buy their piece of Costa Rica real estate.  In fact, one of the most popular questions Ben and I field is “How many months per year does it rain?”  The quick answer is around seven; however, that number doesn’t tell an accurate story.  The rainy season starts in mid-April and usually runs through mid-November.  Most days start out cool, clear and sunny with some rain in the afternoon and evening.  Rainfall in September and especially October can be heavy.  These September-October downpours, aguaceros in Spanish, lead some residents to make plans to be elsewhere during that time.  That being said, even in October the sun will come out at some point during the day.  We do experience the occasional tropical storm, but hurricanes on the Pacific side of Costa Rica are a rarity.

One of my favorite benefits of the rainy season is there aren’t as many people.  It’s not that I have anything against tourists; we were all tourists at one point in the Costa Rican journey.  However, if you live here full time or part time, the small town, pura vida is easier to absorb without the extra traffic, both automotive and human.  Tourism, and the vacation rental market, is still strong between June and August as most kids are out of school.

I spent most of my life in the relatively dry Bay Area of California, my love of the rain comes as a surprise to friends and family back home.  I try to explain how the rain cools things down, how it takes the dust out of the air, how it replenishes the fresh water tables, and how it summarily brings this place to life.  The southern Pacific zone is SO GREEN that at times it seems like someone has adjusted the color balance.  The tropical flowers and budding fruit pop against an ever-changing jungle backdrop.  Simply put, rain helps everything grow, and that includes the wildlife and the humans walking around.

Like buying real estate in Costa Rica, living here is relatively easy with the right contacts.  It can also be a very enriching experience with some understanding of Spanish.  If you want to be on the Pacific Coast, you have to enjoy the heat to some degree (pardon the pun).  Thanks to the heat, I am now a morning person.  Thanks to the rain in Costa Rica, I am now living a dream.

April 9, 2010

New Theory Explains Why We Find Costa Rica So Darn Pleasant

Filed under: Just for Fun, Relocation — Tags: , — Ben @ 7:52 am

or – How Media Saturation Robs Us Of Our Joy

or – an Original Thought is a good thing

(This article can be discussed in the Guys In The Zone Forum by clicking here)

We humans find ourselves intriguing, in fact – fascinating. Theories explaining the experience of being human abound .

One theory that I heard as a young man has stuck with me through the years. This theory now finds a rather interesting application in my life of living as an expat here in Costa Rica. I see the possible truth to this theory as I observe what I have come to know as “4th Day Original Thought Syndrome” or “4DOTS” in Costa Rica. Based on this thing that happens on day #4, many decide that they would like to either make Costa Rica Home, or to at least make it a big part of their life.

Observation:

Thinking Man Fires Off a Brain Circuit


4DOTS is simple – it’s really nothing more than relaxation. But I need to do a footnote definition here of what I mean by relaxation. It’s more than just having our neck muscles relax and our shoulders lower down by a couple inches, (which they do on day 4). 4 DOTS relaxation has to do with the mind.

The Theory:

It is thought that when we first have an experience as a baby, we fire off a unique circuit in our brain. The experience is profound and frequently pleasurable. We are drawn to the subject experience again and again to get better acquainted. We call this learning.

Let’s say that at the age of 1 year our Mother puts us on the warm, sunny lawn in our back yard to crawl around. A new circuit is fired through our brain and we are fascinated by the greenness of the experience and the warmth of the green. The texture is slightly prickly but not unpleasantly so. There is a humid component and a wonderful smell that we will later on associate with the word “earthy”.

From this point on in our lives this same circuit fires every time we experience warm green grass, causing a familiarity with the experience, and this we call memory. So the theory goes.

(As an aside, i t is thought that the psychoactive drug LSD causes variations in our established and familiar brain circuitry. This can be profoundly pleasurable (or disturbing) and cause fascination with what we adults would consider to be mundane things. This would explain why people on LSD can be seen studying their hand, or marveling at the grass they are standing on. ) (more…)

April 3, 2010

Education In Rural Costa Rica, Part 1

Filed under: Culture, Info & How To's, Relocation, Stories — Tags: , , , , , , — Tigre @ 2:34 pm

Education… it elicits warm images of smiling children, colorful classrooms and fundamental ideas like opportunity and a brighter future.  I am happy to say I see all of those elements unfolding here in Costa Rica, albeit sloooowly.

Did you know that the Costa Rican government is constitutionally required to budget at least 6% of the country’s GDP on educational programs?  In fact, the only countries that spend more on education (as a percentage of GDP) are Saudi Arabia and Norway at 9.5% and 6.8%, respectively.[1] Costa Rica also sports the highest literacy rate in Central America at 95.8%[2].  That said, there are a couple of gaps this learning curve, and I’m specifically referring to the parents and educators in this rural region, not the kids.

Elementary school classroom.

Ben and I often receive school-related questions from potential clients.  So, here’s a quick synopsis of public and private education in our region of Costa Rica.  Public school is free and for children between the ages of 6 and 13 (e.g., 1st through 6th grade).  Unlike most of the public schools in the United States, Canada and Europe, students are required to wear a uniform, typically dark blue pants with a white or light blue shirt.  The curriculum includes the usual core subjects of Spanish, Math, History, and Science.  Since 1998, English and Computer Sciences are also standard.  After kids pass their final elementary school testing, they have the option of a five-year stretch in colegio (i.e., high school in North America and Europe).

Judging from the local tico parents I have spoken with, their public school system offers a decent education for their children.  Judging from the growing number of expats living in the area, the school system is far from acceptable.  Leveraging my sources, namely my girlfriend (who has an 11 year old son) and a variety of local parents with school-age children, I embarked to uncover the real education story.

Frustration In An Emerging Country

“They don’t have school today… again!”  My girlfriend was beside herself.  Apparently, the parents of her son’s public school (he was in 5th grade) chained the front doors of the school demanding the removal of an (allegedly) drunk principal.  This comical Latin American story quickly turned ridiculous, as the protest went on for almost a week?!   Then, there was the teacher’s constant infirmity with no substitute.  Then, there was the partial flooding of the campus for a few days during the rainy season causing… yep, no school.  In reality, her son probably only attended half the number of days scheduled.

On top of that… the school didn’t have any books.  The teacher cited the importance of learning dictation and penmanship, but at what expense?  Early in the first parent-faculty meeting of the year, my girlfriend asked for an explanation?  The answer was they didn’t have any money.  Then, education in rural Costa Rica came into focus when each of the parents decided to budget money ($2.75/month for 10 months) for a “Christmas Party” for the kids.  The party turned out to be a success; the kids sang a few songs, played a few games, and ate what amounted to $20 worth of candy and cake.

This year, her son is attending a new “better” public school in Uvita.  The only problem is they don’t have any text books either.  But, hold on… before prospective mothers and fathers cross Costa Rica off the list, please allow me to share another option available.

Multi-Cultural, Global Citizens

“By learning you will teach, by teaching you will learn.” – Latin Proverb

I remember when I first met Ben, and he told me the main reason he moved his family of five from Colorado to Costa Rica was because he wanted his kids to be bilingual and have an enriching life experience.  In fact, those are two of the main reasons most families move down here.  The third being… it’s a tropical paradise.  They lived in San Isidro, and they homeschooled their children who turned out happy, healthy, and yes… fluent in Spanish.

All that being said, we understand home schooling is not a viable option for some parents.  In Part 2 of this article, I will share arguably the best educational option in Costa Rica— private school.  It will also include continuing education for adults specifically, learning Spanish!  Until then, please feel free to share your questions and comments in the space below.  Saludos.

[1] http://www.oclc.org/reports/escan/images/edpercent.swf

[2] United Nations Human Development Report 2007/2008 (Unfortunately, in some countries literacy is defined as being able write your name.)

March 10, 2010

The Most Precious Real Estate

Filed under: Info & How To's, Just for Fun, Relocation, Stories — Tags: , , , , , , — Tigre @ 2:06 pm

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.

August 28, 2009

Thoughts From The Outfield #1

Filed under: Just for Fun, Land For Sale, Relocation, Stories — Tags: , , , , , , , , — Tigre @ 2:08 pm

Softball Group Photo

I was standing in the outfield at the Saturday Softball game in Uvita, when the feeling hit me. It was the warm feeling you get (and I’m not referring to the direct sun variety) when you are with a group of people having fun. In a word: community.

We have a special one down here in the Southern Pacific Zone of Costa Rica. Perhaps it is the international mix of ex-pats— Germans, French, Italian, Swiss, Argentinean, Canadian, Mexican, African, Chinese, and the list goes on. A variety of backgrounds and personal stories better than any television series— the crazy Italian chef turned humble bread maker, the ex-radio personality turned successful bar owner, animal activists, people activists, retired couples from Atlanta to Ibiza…. the list is long and varied. It’s diversity meets adventure meets pura vida, and we love it.

For many investors, Costa Rica has been (and continues to be) primarily a smart place to put your money. And, that’s fine; investing is encouraged given the bright future of the country and region. But, for those people considering a permanent (or semi-permanent) move down to Costa Rica, the reasons stretch beyond democracy, economy and sunshine.

Variety evolves culture. This is especially true with the exotic cuisine found in the area; there is even a restaurant named Exotica, and it is excellent. In addition to numerous Tico restaurants, international options include—French fusion, organic Italian, Japanese sushi, Curry Night, and yes even elements of “the western diet” satiate the The Zone’s inhabitants.

Uvita Farmers MarketIn addition to these restaurants dotting the landscape, a staple of any conscious community is the farmer’s market. There are in fact two weekly farmer’s markets in The Zone—Thursday and Friday in the fast-growing city of San Isidro, and the Saturday Farmer’s Market in our sleepy beach town of Uvita. This relatively new farmer’s market offers an increasingly broad array of (mostly) organic produce, baked breads and pastries, homeopathic elixirs, and hand-made gifts. I consider all of these wonderful vendors “artists”, as you only need to grow or create something and share it with others to qualify. In fact, we have more photographers, painters, writers and musicians per capita than any place I’ve ever been. Perhaps it is this artistic quality that blends so nicely with the laid back, friendly nature of the Ticos.

Most of the people living here agree that the economic downturn is no excuse to lose sight of the importance of doing what we love. In fact, it compels us to re-adjust our sights on something uplifting and sustainable. Simply put, Ben and I love helping people invest in property in the Southern Pacific Zone of Costa Rica. We love every aspect of this service—putting deals together, hiking around large farms, chopping tall grasses with machetes, designing new websites…. all of it. In fact, work doesn’t feel like work at all. Experience tells us the recent drop in property prices will soon hit bottom (if it hasn’t already), and another long rise will begin.

This coastal area, as my friends in California like to say, is golden. The reasons are many—low population & construction density, great value, the Coastal Highway is almost paved between Quepos and Dominical, an International Airport in our future, it’s a tropical paradise. And, let’s not forget the original inspiration for this article—community. It’s not something you can put a price on. It’s something you feel.

Especially on days when you observe 20 gringos cheering for a Tico kid who hit his first home run.

July 23, 2009

Directing Your IRA To Costa Rica

Filed under: How to buy, Relocation, Taxes — Tags: , , , , , , , — Tigre @ 3:16 pm

retirementlaneThe Mysterious Disappearance of the “Equity Buyer”

It doesn’t take a real estate tycoon to figure out the primary reason for the decline in Costa Rica real estate activity— the disappearance of the “equity buyer” [noun- a mortgage holder who uses the amount of ownership built up through payments and appreciation to purchase additional real property]. With the banking industry on its heels at the beginning of 2007 (and flat on its butt by the end of the year) and home values at record lows, those buyers with a desire to invest in Costa Rica property were seemingly left without this viable capital source.

Yet the optimist in me feels compelled (at 6am on a Tuesday morning) to share a couple of thoughts and possible solutions for people who want to be down here. And let me tell you, if there is one market factor that has not changed it is that people love Costa Rica.

A Little Known Fact– The Self-Directed IRA

I had a client contact me recently with her desire to purchase land in our area of Costa Rica. She is a real estate professional from Florida and knowledgeable about buying property in Costa Rica. Her approach was, via a third-party investment trust company, to self-directed funds from her United States IRA (Independent Retirement Account) to buy land in Costa Rica. After our initial discussion, I did a little research.

I discovered that in 1974 Americans were allowed to invest tax-deferred retirement funds in real estate and, get this, foreign real estate! Even though it wasn’t publicized (or understood), this was a landmark moment in the evolution of the Internal Revenue Code. And even now, many people are unaware of the diverse benefits of switching from a traditional IRA to a Self-Directed IRA.

The benefits will appeal to many IRA owners—

  • Tax-deferred: The U.S. government allows this money to be used for purchasing land outside of the U.S. on a tax-deferred basis as long as the funds are not withdrawn before retirement age. This means you can purchase any type of legally owned property (i.e., a house, a condo, raw land, commercial property) in Costa Rica. For those of you who have always dreamed of growing your own food on a large farm or just simply retiring in a resort community, this presents a magnificent option.
  • Control: Unlike stocks, owners can have a direct affect on the property’s appreciative value by making improvements to the land or structures. This added sense of control over your real property investment can be appealing for those who are tired of stocks being improperly managed by a broker or financial advisor.
  • Income: ANY income generated by the property goes back into the IRA account. In the examples of rental income generation via houses and luxury estates, this is an attractive investment benefit… especially considering the burgeoning market of tourists who now vacation in the southern Pacific zone. (2008 tourist arrivals were estimated at 2.2 million, up from 2007’s total of 1.97 million)
  • Financing: Property purchased by your Self-Directed IRA can also be financed, as long as the purchase is structured properly.

Allow me to share a few considerations if you are contemplating this financial move:retirementsun

Self-Directed IRAs are similar to traditional IRAs except they must be managed by a financial custodian, typically a trust company. The custodian is actually the entity that buys the real estate on your behalf. My client is using Equity Trust, but there are many options (e.g., Sunwest Trust) and I encourage you to investigate their level of experience investing in Costa Rica, as well as, their annual fees.

It is also important to keep some additional liquid funds (cash) in your Self-Directed IRA, property taxes (In Costa Rica only .5% – 1.5% of declared property value) and other necessary payments that need to be made, via the custodian.

Finally, if you are under 59 & ½, you cannot use this foreign investment as your primary residence or vacation home. However, my client (who wishes to retire in Costa Rica in the near future) has devised the wonderful strategy of buying a big piece with her Self-Directed IRA funds and also buying a smaller adjacent piece with her personal savings. We also discussed segregating a buildable parcel of land off a larger farm to facilitate this idea. This way she can monitor and improve her larger piece while living on the smaller parcel, thus holding to this Self-Directed IRA restriction. For those over 59 and ½, great news…. this residential restriction does not apply!

Even for those American investors who are years away from retiring, the Self-Directed IRA is a fantastic option for those looking to invest or relocate to Costa Rica. And speaking from personal experience, there’s no where IRA-ther be.

June 28, 2009

Why Did You Move to Costa Rica?

Filed under: Just for Fun, Relocation — Tags: , , — Ben @ 3:25 pm

whycrstandingman2“The chance to have a second life in the same body.  A life immersed in nature, and immersed in culture.  This would be to get involved in what is here as opposed to what I had already lived”.

To share your story, scroll down to the bottom of this post.

After reading my article in a new magazine here in the zone, Raven’s flagship Montañas al Mar, an old friend approached me and took exception to one of my comments.  He was able to quote the article – the part where I mention how early land buyers here in Costa Rica’s southern Pacific zone were able to convert $1.00 invested in land into $120.00 by selling that land.

My old friend, who is seated squarely in the middle of the “early investors” group, made the point to me that the so called “early investors”, hardly had “investing” in mind.  This wasn’t what they were doing.  For some reason, this sparked my question: “Why did you move here”? And hence his answer as noted above, which I find to be profoundly beautiful, and the wisdom of which caused me to pause, and it set off a chain link series of memories as to my own reasons for moving here, none of which had to do with investing.

In my conversation with Old Friend, he talked about the day when you would buy a large piece of land, partly because that was all that was available and because that was the life that you wanted.  There certainly weren’t the conveniences here that there are now, but there was the serenity and quiet, and a chance to live “a second life in the same body”.  Granted, the thought of parceling off a piece of piece of that land in the future to reduce, or fully compensate one’s initial investment was present, but was not the key motivator.

Working in real estate in Costa Rica, one tends to get the viewpoint of valuing the land we work with in terms of “asset appreciation” and “investment potential”.  This is indeed what a certain percentage of our buyers are concerned with. However, just like some of the early investors, a number of our buyers now are life-stylers, those who are looking to live life in a way that differs from the way they’ve lived it up till now, and that have placed “asset appreciation” low on the list of criteria that they are looking for.

“Why did you move here” is a great mental exercise for us expats and migrators.  I suppose that there will be some that answer the question with: “I came to invest in land and make a lot of money”, but I think that they’d be in a minority among those that live here.

The beauty of buying land in an area such as this is that you can perhaps optimize your dreams in the buying of that land.  The land itself becomes the means by which you can live in this beautiful area of planet earth.  There are so many ingenious ways that expats find to support themselves here: vacation rentals, B & B’s, spas and retreats are all in full bloom here for this very reason.  One couple I know have cabinas, a highly rated restaurant, a decorative iron works shop and a petting zoo on their property, even though the property is a little off the beaten path.  Its hard to know if it’s a money maker, but it clearly allows them to live happily in Costa Rica.

There seems to be an irresistible push to make Costa Rica just like any other desirable destination, with all the services and conveniences of a Florida or a southern California.  There are a couple of factors here which may affect this “push” from coming through to full fruition. One is the topography.

Costa Rica is a geologically young country.  Pressed up by colliding plates, the country was thrown up by erratic tectonic pressures in an anything but orderly manner.  After living here for over 10 years I still have to carry a compass with me to establish “north” in a given location, so abstract is the lay of the land. Even if pure lucre were given free reign to define development in the zone, it would be limited by the radical nature of the topography.

And then there is the matter of consciousness.  Costa Rica news headlines are rife with reports of catastrophes and subsequent damage control that rampant development has caused in the earlier developed areas of Costa Rica.  We here in the southern zone are benefitting from the mistakes made elsewhere.  There is a genuine interest on the part of foreigners and Ticos alike to preserve this gem-like portion of Costa Rica, a consciousness that transcends the turning of a buck.

Well, we’re hoping so.

So much of how we’re doing here as a species, living in the finite space of this planet, is defined by our use of land.  Just in the last week I’ve enjoyed the conversation mentioned in this article, and others with developers, house builders and residents alike that are focused on “green” and “sustainability”, in their truest sense.

There is a construction company taking shape in Dominical that is no less than visionary in its approach to the building materials that will be used to construct human habitat.  There is a company in Canada that is about to make solar homes with thatched roofing affordable to land buyers here in the zone.  There are efforts on the part of developers to employ ecological easements to definitively restrict the further subdividing of their lots, into perpetuity – all good.

We are about to see a major change here in the zone.  More people are going to find their way here with the paving of the bumpy road that links Quepos in the north to Dominical, the gateway to the zone.  Development and progress are going to happen.  It seems to be an irresistible force in human society.  More, bigger, better.

So, why are we here?

Perhaps it’s the differences as compared to where we come from.  Perhaps it’s the value of quieting the inner dialogue that ran so rampant in our minds “back home” – freedom from media saturation – a connecting with nature and the spiritual side of things – an opportunity to “get involved in what is here as opposed to what I had already lived”.

How we answer this question may define how things look around here in the coming years.

 If you would like to send us your answer to this question, please fill feel free to cut loose with your creative thoughts.

  1. Let us know why you live in, or visit Costa Rica
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June 4, 2009

Guys In the Zone Talk Show – Episode 3

Filed under: Construction, Relocation, Talk Show — Tags: , — Ben @ 2:58 pm

Podcast: Play in new window | Download

Build or Buy in Costa Rica

Episode 3 features a discussion on the Pros and Cons of buying a house or building a house in Costa Rica’s southern Pacific zone.  Featured listings in the episode include–

Casa by The Pond – #319; a lovely house located in central Ojochal with a pond, swimming pool and extra sub-divided building parcel.

Uvita House – #83; a well-built, two-story house with a private, ocean view setting in upper Uvita.

Casa La Big Sur - #355; with construction almost complete, this large estate home promises to set the standard for luxury living in the southern Pacific zone of Costa Rica.

The Oasis - #319; enjoy ocean views, privacy and plenty of amenities in this artistic, modern architectural retreat in the well-established enclave of Lagunas.

Building materials, construction scenarios and land purchase trends fill out the topics covered in the episode.

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