Pura vida, compadres! With a focus on Costa Rica real estate, Episode 7 features our impressions on topics like–
The Rainy Season
Property Prices
Seller Financing
The NEW Forum
Thanks for watching and following us on Dailymotion, Facebook, Twitter, and our websites– www.GuysInTheZone.com, www.hotcostaricarealestate.com, www.Dominical.biz, and www.Uvita.biz.
Welcome to our full video Talk Show format! In addition to this new look, we share new information on Costa Rica real estate including, a recap of 2009, recent activity in the southern Pacific zone of Costa Rica, and new issues for buyers and sellers. This post comes in advance of the new www.GuysInTheZone.com website, where you can find all of the best resources for the area in one place. The most notable addition to our new site is the forum. It’s there to give us all a place where we can discuss the various topics that are going on around The Zone. To all our readers, watchers, and listeners, thank you for your questions and comments, and please feel free to get involved over at our new forum.
Uploaded by GuysInTheZone. – Explore lifestyle, fashion, and DIY videos.
Water is a necessity.
If you ask the World Bank or one of the mega-water corporations (e.g., Coke, Nestle, Vivendi), fresh drinking water is a commodity. If you ask virtually everyone else in the world (including the United Nations), fresh drinking water is a basic human right. Whether it is the encroachment of privatization or Nicaragua’s plan to divert the San Juan River[1], water in Costa Rica is an increasingly lively topic.
One of the most popular questions for potential property owners is, “What is the water situation for this property?” Most of these new investors come from North America and Europe, areas that have hundreds of years of infrastructure development. However, this southern Pacific region of Costa Rica is still early in the cycle of development. We continue to see rapid growth in communications (cell phones and high speed internet), power (high tension power lines), and roads (the newly paved Costanera between Quepos and Dominical). That being said, cell phones are a luxury, but water… is a necessity.
Property In A Development
Most quality developments have a water system that has been installed by the developer. The most common sources for these systems are high flowing springs, and in some cases surface water (e.g., creeks and rivers). Some developments, like Osa Estates in Uvita, even have back-up systems and extensive water storage capabilities. The interesting thing is very few developments actually have a concession (permission to extract water from the ground). The good news is the majority of them are “in process”. Either way, the developer usually provides the property owner a prevista (water right document) which guarantees use of water into the future (assuming the property owner is in compliance with established CC&Rs and other laws). Proof of a water document, like a prevista, is also required by the local Municipality before they will approve any construction project on a property. (more…)
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.
Ample surface water in The Zone.
Recently, I had the good fortune to visit a friend who gave me an excellent book called “The Heart of Dryness” by James Workman. Although this particular book is about the socio-political struggles of the Bushman of the Kalahari Desert, it sparked a deeper exploration into a topic I believe will jump to the forefront of everybody’s conversation in the near future— water. Access to fresh drinking water is already one of the “big three” infrastructure necessities (along with electricity and good roads/access) when looking for property in Costa Rica, hence the motivation for this article.
I will save my thoughts on the impending collision between over population and global warming (two forces which, in a nutshell, will have a dramatic effect on fresh water availability and global food production). However, I do want to share a few thoughts and discoveries about water in Costa Rica, as I believe it will continue to move up the list of positive reasons why people will be moving to the Southern Pacific Zone.
Unlike some of the coastal areas in Guanacaste and Nicoya, The Zone has an abundance of fresh drinking water. There are two main reasons for this fact— (1) rainfall and (2) less development.
Rainfall
For the Southern Pacific Zone of Costa Rica, rainfall ranges between 120-160 inches annually, with the rainy or “green” season (May-October) supplying the majority of this annual total. My experience has been that the sun shines almost everyday in the rainy season, typically in the morning to mid-day hours. Residents of The Zone thoroughly enjoy the 20-30” of rain we do receive in the dry season (3 hours last night, in fact), and the lush, green vegetation it stimulates. In contrast, the popular coastal region of Guanacaste (Tamarindo, Flamingo, Papagayo) receives only between 40-60 inches of rain annually.[1]
Population
Approx. 35,000 people live in the Osa Canton of Punta Arenas (think of a canton like a county within a state), which roughly includes the coastal area between Dominical and Palmar. Unlike The Zone, Guanacaste’s coastal region developed rapidly over the past 15 years. According to the Minister of Tourism, it is the #1 Canton for tourism, specifically the coastal areas. This influx of world travelers, especially in the peak dry season, puts an added demand on water resources. Without question, the agencies and residents are benefiting from these growing pains experienced by our neighbors to the north.
Fresh Drinking Water
Part of the reason for this “gold star” is the government structure. AyA (Aqueducts and Sewers) is the main government agency that manages water in Costa Rica. Although many subdivisions and larger farms in the Southern Pacific Zone have their own water sources (springs or surface water like—rivers and streams), most of the towns and pueblos get their water from AyA-managed water delivery systems. Those smaller, rural communities in the region have been encouraged by AyA to form ASADAs (Administrative Associations for Sewers and Aqueducts) to become eligible to receive AyA assistance in constructing and operating water systems. ASADAs make up nearly ¼ of the water provisions in Costa Rica.
Rain and a rainbow over Uvita.
“At 82.2 per cent, Costa Rica has one of the highest rates of population with access to safe drinking water in the Latin American and Caribbean region.”[2]
The vast majority of water in the Southern Pacific Zone is either (1) safe to drink from the tap or (2) treated with chlorine and safe to drink from the tap. There are cases of people living below cattle pasture or near commercial industries where run-off has led to water-born illnesses and toxins, respectively, but these are few and far between along the coast. I live on a farm where we drink our water from the tap, and I feel very fortunate to have clean, chlorine-free water on demand.
Properties that are served by mountain spring water tend to be fresher and with a reduced risk of water contamination. Over 50% of the property we sell is located in a development of some kind. These developments range from those that have received a water concession and those that are at some point along this process. Either way, these developments have invested in basic infrastructure, or the “big three”– water, roads, and electricity. We also have many clients requesting information on these larger properties with independent fresh water sources, when they become available. One beautiful 50-acre listing, Finca Uvita, has two springs on the property and touches the Ballena River for over 1/2 a kilometer (or 1,660 ft).
Whether you buy a large farm like Finca Uvita or a viable commercial piece in central Uvita, you will intrinsically benefit from a growing area and an abundance of water in The Zone.
[2] STATEMENT BY THE UNITED NATIONS EXPERT ON WATER AND SANITATION, March 2009
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.
In 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.
The 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—
Allow me to share a few considerations if you are contemplating this financial move:
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.
. Powered by WordPress
