Guys In The Zone: Costa Rica Real Estate

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…)

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…)

January 23, 2009

Yodeling Naked & Firesales

Rod & I sold a piece of property yesterday and I’d like to tell y’all about it. Be ye buyer or seller I think that it will be informative and hopefully helpful.

The couple came to us from a Canadian referral, primarily to view the San Buenas Golf Resort. I’ll call them the Schmerds.

After viewing the course and deciding that it was for them – they’ll likely get a clubhouse condo for investment and income generation. All this plus the fact that they like to golf made that a no brainer. They asked if they could see some general market properties as well.

We started in Uvita with some lovely whales tail view properties. View from lot 6 Bella Vista Uvita Costa RicaBella Vista Lot #6 has occupied “The Best Deal in Uvita” slot for some time, but was recently nudged into second place by a fire sale opportunity that we had just received.

The Schmerds LOVED #6, with its beautiful ocean and jungle views and absolute privacy. A little over 2 acres and end of the road quiet.

From there we went to Bella Vista #5 Bella Vista 5 Whales Tail Viewwhich is a re-sale and was formerly “Ben’s Favorite Uvita Property” but it too has been relegated to the #2 position by another property that I’ll describe here in a minute.  (more…)

January 9, 2009

Big Earthquake no Big Deal in Uvita

Filed under: News — Ben @ 5:05 pm

When I first posted the below article, I was “street informed” and had heard nothing about anybody being hurt by the earthquake. When I first read a news report on the earthquake, and the fact that people had died, I was shocked. The toll has gone from 2 to an estimated 34 over the ensuing days. We barely felt it here in Uvita. Hence, my title for this article is now inappropriate. The Big Earthquake has now become a Big Deal in Uvita. Our condolences go out to the loved ones of those hurt or killed by the quake.

I was sitting in my real estate office here in Uvita Costa Rica yesterday when I felt the floor tremble a bit. I looked around for a nearby glass of water, as is my custom. There wasn’t one. I shrugged and went on with my day, responding to e-mails, working the web sites, conversing with clients. earthquake.jpg

A couple hours later word comes in that there was a major earthquake centered up around Poas Volcano. (Click here to read the CNN article about it.) Clients write in and ask “How you guys doing there in the zone?”. We’re fine. I remember thinking that I had felt the floor shake a bit, but I never really trust it when I feel that.

Having lived in Costa Rica for 10 years, I have gotten used to earthquakes… well sort of. I think that something tweaked in my head after having experienced a few of them. I’ve never felt threatened by one, so there isn’t an “ohhh I’m scared!” kinda thing. Actually they’re kinda cool. But they do shake the very ground you walk on, and that has had a rather strange affect on me.

After a notable shaker some years ago, I noticed that there were an inordinate amount of aftershocks going on. During one of these “aftershocks” I noticed that (more…)

January 5, 2009

How to Sell in a Down Market

Filed under: How to buy, Land For Sale, State of the Market — Tags: , — Tigre @ 1:02 pm

head-silhouette-with-question-mark.pngAs all of our sellers (who were once buyers) know, value is one of the most important elements for any investor, never more so than now.  In years past, headroom for appreciation was a given.  Land was relatively cheap and on the rise compared to the rest of Costa Rica.  In fact, many investors purchased multiple properties at that time.

We now find ourselves in a more mature market with more discerning buyers and subsequently some properties sitting unsold for an extended period of time.  Due to the recent economic downturn we see an increasing desire to move something now.  This is a different approach to the “let’s put it on the market and see what happens” mindset of years past. We have now hit the lull so commonly experienced in a previously booming market.  Seller financing has allowed more buyers to secure a property, as well as, partially alleviating the financial pressure on many sellers. (For more information on seller financing, see Ben’s article “Do You Have To Be Rich To Own Land In Costa Rica?” )  In any case, for those sellers who seriously need to sell this high season, list price has fast become the key element in the sales process.

Ben and I always strive to create win-win deals.  We love those clients who are not limited by a hard-ceiling budget; however, our impression is these liquid investors will probably not make up the majority, moving forward. Most prospective buyers who approach us (either online, as a referral, or as a walk-in) have a budget of $XYZ. We start by showing them the best value in that general price range.  More often than not, we only have one or two days to spend with them.  This limited time frame means a seller’s property may not make it in the first circuit, or “A” group. When the “A” group is exhausted, then we move to the “B” group, which include equally stunning properties at a slightly higher list price.

I describe our listings in this way not to get our sellers to lower their list price necessarily, but to understand that if they need to sell their property, list price is key to getting the property shown. Ventanas Oasis (listing #299) is one example of a fantastic ocean view listing priced to sell.  Without a prospective client taking the drive to your property, standing on the dirt, and blending their vision with the features and possibilities, you have virtually no chance of getting an offer.  So, our suggestion is to leverage the next few months with a list price that will get your property shown and sold.

Ben and I are available to answer any questions for buyers and sellers regarding comparable pricing, as well as, the best properties available in the southern Pacific zone of Costa Rica.

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…)

December 17, 2008

Who is Buying Land In Costa Rica?

Filed under: How to buy, News, Stories — Ben @ 8:03 am

I think that this question is probably the second most asked question of a real estate agent in Costa Rica. Second after: “what’s going on in real estate in Costa Rica”? Actually, the two run hand in hand.  In my recent post where I stuck my neck out and made some specific predictions regarding the coming season, I basically said that I felt that there was compelling reason for 1) relocators and 2) land bankers, to buy land in Costa Rica in the present financial climate, and specifically, the southern zone.

I’ll profile my two most recent showings below.

Profile #1:
I’ll call them the Boydsons, were the ones that inspired the post: “Do You Have to be Rich to Buy Land in Costa Rica?”.  We spent a couple days together here, and I think that they represent a large percentage of buyers that we’ll be seeing here this season.

Mr. Boydson had mentioned that he had a little money, $50,000 to $75,000 to put down on a property, and that he would like to have an existing house. His budget was around $150,000.  So seller financing would be required.  An ocean view wasn’t required, but privacy and acreage were. Mr. Boydson is an avid gardener.

The Boydsons and I met in the office and spent our first couple hours discussing their objectives and arranged to go out the next day and put our feet on some available Costa Rican soil.

In our conversation, I mentioned that a lot of folks come to Costa Rica looking for a finished house so that they can avoid the hassle of building, but after looking around some they more often than not, end up buying a piece of land and building.  This has been due to the fact that we are early in the real estate cycle and the bulk of our inventory is still raw land.  The available houses enjoy somewhat of an inflated value due to their scarcity, and the fact that many folks don’t want to build.  After looking at land and houses, the calculations generally make it clear that the best financial decision is to build. (more…)

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…)

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…)

November 23, 2008

Ben’s Predictions

Wouldn’t it be nice to have a crystal ball that you could rely on to foretell what was going to happen? In the present “down” condition of the world’s economy, everyone is guessing what is going to happen. If one were to guess correctly, there is no doubt some opportunity out there. It is interesting to hear Nobel laureates in the media using the now well worn phrase “we’ll see”, ad nauseum.

I am having daily discussions on the current state of the market with regards to Costa Rica real estate. I suppose that my position in the Costa Rica land marketplace makes my opinion of value to some. But really, nobody knows what it is that is going to happen. There are just so many factors at play now. But, having said that, I’m going to stick my neck out and make some concrete predictions about what we’re going to see here in Costa Rica’s southern zone.  But my prediction disclaimer remains in force… we’ll see.

I think that this coming season, which is starting now, we’re going to see some land banking (see below) sales, some of which will likely be higher end, and I think that we’re going to see some determined re-location buyers here. Here’s why.
(more…)

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