Click here for part 2 of this article.
Our main web site www.Dominical.biz has a sort of Dominical-centric perspective to it, and so it is from this vantage that I view things here. Its kinda funny though, this perspective, because really, what the heck is Dominical? It’s a fun question. People travel here like they are going some place… I don’t know, some place impressive or involved or something. When they get here and see Dominical’s main road and its dire need for improvement, and it’s funky surf culture, I think that they often times wonder if perhaps they missed it, which is in fact what a lot of people do when they are driving south on the highway.
As you come down the highway from Quepos, you bump along on the dirt road for some 25 miles until you finally get to the big intersection of the coastal highway (that you are on) and the highway that comes down from San Isidro, (which is another way to get from San Jose to Dominical). That intersection is an introduction of sorts to Costa Rica’s southern zone. The roads smooth out, and there is a large fruit stand there, as well as a police check point, then a bridge over the Baru River that you cross – then the next right turn, such as it is, is what conducts you down into Dominical. I have talked to countless folks that passed right on by the turn into Dominical and arriving at Uvita they figure out that they missed it. Such is Dominical, the hub of it all here in Costa Rica’s south pacific – or so we are inclined to think – those of us who live and work here. (I should mention that Uvita is THE hot spot on the coast now. In fact, Uvita is where our office is located.)
Boom History
July of 2004 is when I put it. Someone threw a switch then. Prior to this date there had been quite a bit of inventory as regards lots and large parcels in Dominical’s real estate market. Beautiful ocean view lots that were within minutes of the beach. All prices sort of pivoting around that $100,000 figure. The really good ones started with a 2, even back then, but these were something VERY special. When the switch was thrown, it all got bought up.
Nowadays we talk about what percentage you can expect to make from an investment here. 20%? 30%? How does it compare with what you can do in the States? Well, you have to factor in the “riskiness” of investing in a foreign land, and all that. But these first round investor’s… well it would be a joke to talk about “percentages”. How ’bout buying a 60 hectare farm for $120,000, dividing it up into 15 lots and selling the lots off at $150,000 apiece, average price? Or even better. I have heard of factors of 60 over initial investment. Crazy stuff.
It’s these accounts that make the rest of us feel like we are a bit late. But really we’re not. This is a cycle that has been witnessed in human history repeatedly, and it can only be a select few that happen to be in the right place at the right time AND, who have the will and chutzpah to plunk down the funds necessary to secure a piece of land in an area where there is no electric, phone, nor roads really. Most of the transportation is via horse back. Who would want to buy land here? To visit, yeah maybe. Its like going into a National Geographic special, but to actually buy; power to them. They deserve what they got. I contend that the majority of us, if we were to stand in the shoes of these now very rich land investors, we would have opted out of investing here.
So, the first round of inventory that had been laying around, punctuated by the occasional sale happening, all got snapped up within a very short period of time. Then, these same developers rushed to prepare other pieces they had in the wings for the market, and got these to market, where they were greedily snapped up by the ever accommodating press of buyers to the various real estate offices in the area. Word got out to the global market place: “there is gold in them thar coastal properties around Dominical!”.
And so the next wave of global investors began to arrive in droves. These are the ones that respond to indicators. Indicators such as – well – such as people making buckets of money off of buying and selling land. These investors differ some from the first wave that really scored. So now it is their turn. They are arriving and saying: “I understand that if I buy a large parcel and cut it up, and sell the lots I can make great returns on my investment”. But there is a problem for these guys.
The problem is that there are no more such parcels. They are all gone. The last of the big parcels around the Dominical area have been bought up in 2006. I hear rumors about stuff up a little north of Hatillo for $6,000,000 that would accommodate a golf course, and there are still some sub dividable parcels down south of Ojochal, but not many. The problem is that the comfort level necessary to attract the big money investors arrived after all the deals were gone. Now what we have here are lots, great for single families and for the ever popular and necessary B & Bs, and other possible income generating endeavors.
Actually there was a little phase that we passed through that I call the “juicing” phase. To take advantage of the “juicing” phase, one needs to acknowledge that the above has come to pass, that there is not some big parcel out there waiting for them to buy it, cut it up, and make a bundle. To juice, one gets a good understanding of what’s out there and puts together a few single lots and gets creative with what one can do with it. Or, an investor can find a seller that wants to sell in the “zone”, but his property has some problems, such as poor access, or water or some such thing, and the resourceful investor can contract to buy the property, provided that he determines that the problems can be remedied and be willing to effect the remedies. I have personally had some pretty good successes with juicing and will be happy to discuss some possibilities with you if you like. I currently have one of these such listings that is a joining of 3 otherwise rather disjointed properties, and putting them together into one exceptional property. This took some diplomatic work on my part to get all concerned to agree, but the sale is now a perimeter around three seller’s property. The property has big ocean views, as well as waterfalls and numerous building sites. Click here to view
So where are we now? There has been a huge land grab by this wave of super-capable investors from all corners – well points, of the globe. I will write soon about the new frontier here in Costa Rica’s ever changing real estate market. To find this frontier, we have to travel south. “South of what” you might ask. Why, south of Dominical, of course.
