Guys In The Zone: Costa Rica Real Estate

February 6, 2010

Did Taxes & Tourism Blow Costa Rica Real Estate Out?

Costa Rica Real Estate Listings

I just received an e-mail from a reader that shamed me into sitting right down and writing.

I have read your face book page and articles on the tax issue there.

I had been planning to take a trip in March in the hopes to travel to Domincal and Uvita nd look at some land that over looks (has view of) the playa. But with all this discussion of election and no tourism and the tricky tax factor it sort of puts a damper on it.  Was this a major blow to the real estate and tourism market, and did it blow you out?

I’m sorry but I’m not aware of the negative effect that the election could have on a land purchase in Costa Rica so I’m not able to address that.

As for tourism – well now that’s an interesting topic.

Tourism has been as hot here over this last holiday season as I have ever seen.  With the new road from Dominical to Quepos, I think that we’re really in for it here.  I understand that the status of tourism is currently anybody’s guess.  Around here it feels like we are in a growth mode. Granted, I haven’t read a lot of media recently and I don’t have a TV, so as a news source I’m limited to what I see and feel.

Over the holidays Uvita was caught by surprise.  The grocery shelves were bare and we spoke with people everyday looking for a place to stay.  I think that everyone found a bed and it felt like one big party around here. I think that it is notable that the beer supply seemed to hold despite what appeared to be a gargantuan demand.

Although the crowds have left, the festive feel continues with a good strong tourist presence.  So, without reading an article to the contrary, I’d say that tourism is alive and well in Uvita and Dominical Costa Rica, and that the prospects for the future are bright, especially with the two new segments of road making the drive from San Jose to Dominical a 2 hour and 40 minute affair now, instead of the former 4+ hours and some of that on teeth loosening dirt roads.

I have not seen an article written from your blog or website in February on your website so I want to know if you are still in business down there?

Well, I thank you for getting me off of my butt to get this article posted.  I sure don’t want to give the impression that we’re out of business.  Our lack of posting is a testament to our being busy.  Rod and I have been doing quite a bit of real estate business.  We’ve done some deals, and more are coming our way.  All of the agencies are reporting the same, some with best ever numbers – (I heard this last part through a third party, but I hope to confirm it shortly.) (more…)

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January 9, 2010

2009: In The Rearview Mirror

Filed under: News, Projections, State of the Market — Tags: , , — Ben @ 3:17 pm

Rod & I have decided to write a few words about the year just past. We did so without consulting each other or giving any clues regarding what we’ve written.

First off is Rod

If you subscribe to the idea that life is a series of ups and downs, then last year was a harsh reminder of how challenging the “downs” can be.

  • “Unemployment soars to highest level in 16 years.” – New York Times
  • “U.S. Foreclosures to Reach Record 3.9 Million in 2009.” – Bloomberg.com
  • “New car sales a ‘disaster,’ says Sergio Marchionne, CEO of Chrysler/Fiat.” – NY Daily News

While people were losing their jobs and houses in record numbers, they still had the time and interest to search for Britney Spears and WWE (World Wrestling Entertainment, which is fake wrestling, right?) making them the top two search terms on Yahoo! for 2009.

Although I have no idea what Britney was up to in 2009, I do know that most of us here in Costa Rica felt the impact of this economic downturn.  After a decent start to sales in January and February, most real estate companies saw offers dry up during the following 8 months.

Like many people around the world, the Guys In The Zone shifted gears to “beans & rice mode” (luckily, we both like beans and rice). We tightened up the expenditures and found new streams of income. [Ben deserves some kudos here for his quick mastery of the hard money lending business.  He, (leveraging his experience, contacts, and bilingual-ness) saved more than a few local families from economic disaster.  This lending experience taught us that putting good food on the table is important, but to literally save someone’s table (and house it sits in) from foreclosure is a genuinely rewarding experience.] While we didn’t sell any property during the middle of the year, we did put a lot of time and energy into new listings, our websites, and the Talk Show feature which we will continue to work on in 2010.  Ben also started writing articles for Montana al Mar, a new weekly magazine focused on health, sustainability, and community.

The old adage “When you love what you do, the money will follow” proved true in 2009.  The end of the year found activity picking up noticeably.  Three excellent deals (more…)

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October 2, 2009

Kicking Tires in Paradise

We’ve had a week full of working with buyer-type clients, but they definitely fit into what the “Man Says There’s Noriocortezalrunsthroughit Market here” article says below.  I’ll call them the Schmuggerdoos.  They are intent on buying some land, they came here to buy land, they found land that will suit their needs and budget, but that extra spark of “I think I’ll buy this property now” is lacking. They are going back home so that they can return in a few months, maybe, and buy something then. It’s been a great week though.  Rod & I enjoyed getting to know the Schmuggerdoos quite a bit and hope they realize their dream of moving to Costa Rica.  We also are enjoying the ever expanding cooperation between the real estate agencies here.  It is proving to be a real value-add for both buyers & sellers, and it’s improving the quality of life among us real estate professionals. Prior to the Schmuggerdoo’s arrival I had sent their criteria to the other agencies in the area, who responded by sending links to listings on their websites that fit the criteria.  Here is their criteria: (more…)

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March 8, 2009

The Question on Everbody’s Mind

How would you describe the current “crisis” impact on the local economy and on Costa Rica real-estate in general?

Yesterday I made the trip up to San Isidro de el General to take care of some things. I was to meet Rod and Lindsay for lunch at “Mexico Lindo”, an amazing genuine Mexican food restaurant there, run by a bona fide Mexican Armando and his lovely wife. I have known them for years and used to frequent their little taco hole in one of the off-the-beaten-path streets of San Isidro years ago. Now they are located right on the central square and my, how things have changed since those days of long ago. I don’t think that there was a single empty table there, and at least 50% of what I heard was English – my, how things have changed.

lossesgains_0.gif

Running the gauntlet of greetings as I made my way back to Rod and Lindsay, I looked up to see a couple who are particularly good friends, but that I have not seen for awhile. I greeted them with something like “how are you guys doing in this new world in which we live?” (reference to the economy), to which they responded, “what is going on?”. Working in real estate provides one with an interesting position in life. I didn’t realize it for a long time, but it is now clearer than ever. This industry is at the very foundation of life. We all need to live, play, and work somewhere. I received the above question in an e-mail from one of my clients just yesterday, so I heard the question a total of 2 times over the course of the day, and that wasn’t an unusual day.

Here’s what I think

We have lost a lot of buyers due to the economic crisis. We are gaining some buyers that we wouldn’t have otherwise had. It may look something like the graphic there to the left. It means a slow down for us here in Costa Rica, but not death. I have a client/friend/partner that is a high output kinda guy. I’ll call him Steve, a lawyer in Florida. He purchased a piece of land from me 3ish years ago. Subsequent visits have given us the opportunity to forge a friendship. Steve had a plan.

  • Sell his beach condo that he bought for investment
  • Sell his main home
  • Let the lease on his Porsche run out
  • Finish up obligations at the firm
  • Set up some means of income in Costa Rica
  • Move to Costa Rica

Steve LOVES Costa Rica. This is home to him. Every visit here confirms it to him. He just needed to get the ducks all lined up in a neat row prior to making the move. This is a common scenario. Life was fine. Plans were being made. Then, it all changed. (more…)

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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…)

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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…)

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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…)

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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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July 31, 2008

US Economy Affect on Real Estate in Costa Rica

Filed under: News, Projections, State of the Market — Tags: , — Ben @ 9:23 am

Perhaps the most common question I hear in recent months is: “how has the recent economic downturn in the U. S. impacted real estate in Costa Rica?”

Economy Graph

As a broker of real estate in Costa Rica, I work with investors from all around the globe as they search for their property in Costa Rica. In working with these people I get to hear what their concerns are and watch how they respond as they learn and experience the Costa Rica real estate marketplace.

One of the San Buenas Golf Resort (SBGR) partners is Duane Halverson, retired COO from the well known dairy company “Land ‘O Lakes” in the United States. Duane and I have struck up a rather unlikely, synergistic relationship that has resulted in some pretty interesting dialogue: Duane being a long time, firmly anchored, North American business executive, entrusted with the financial well being of a large U. S. company (he also sits on the board of numerous other corporations there in the States), and me being a jungle tromping real estate agent in the wilds of Costa Rica.
(more…)

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November 7, 2007

Uvita News and Ramblings

Filed under: Land For Sale, News, Projections — Tags: , — Ben @ 7:53 am

Before getting started, please check out the new site at www.uvita.biz. I have put up the type of site there that you can contribute your own writings and photos to by logging in. But more on that later.
We are approaching the end of rainy season here. Its funny but I was thinking how long it took me living here to even key into the changing seasons, its so obvious now. We are in early November of 2007, and the rainy season seems to be trying to go out with a bang. This morning I drove down from Escaleras in a downpour. The roads are deeply rutted from the rains, and out on the costanera (coastal highway) there were trees down from the saturated earth being rained on so heavily. We definitely live in the rain forest here in the Uvita area of Costa Rica.
Along with the seasons there is a constant and rather rapid progress of change in the human sector as well. I really enjoyed the read of John Marañon “Gringos Hawk”, which is the account of a Gringo coming to the Uvita area in the early ‘70s and cataloging his experiences. The book gives us a peek at the way it was here just 30 years ago, and now to look around and see the growth. Uvita is in the middle of a white hot explosion of growth and development.
The Uvita area is shaped kinda like a diamond. The coastal mountain range runs down from Dominical, pretty much parallel to the ocean. When it gets to Uvita, it takes a sharp turn inland to a point, then it heads back out towards the beach, causing a diamond shaped plain that is rimmed by a bowl of mountainside that is full of rivers, waterfalls, jungle and rain forest wildlife. It is an amazing place that is surely destined for being the center of community in this area of the coastline. It’s up in this rim that there has been a tremendous amount of residential buying of real estate. Down on the diamond shaped plain, and all around the coastal highway that runs through it, there is a lot of commercial development going on.
I get asked on a regular basis, “howzit going down there in Uvita” or “what’s going on there in Uvita?”, well I’ll tell ya.
Uvita has been the primary area that I have done business in, even though my first few years in real estate, my office was in Dominical. Now I am situated in the commercial center of Uvita. As I looked around my office the other day, I noticed a rather recent phenomenon was taking place. I had clients in my office that actually now live here. How many times I have heard the question: “who are your clients”. There is no real demographic here that is constant enough to actually help a market “target” the buyers here. People come here and buy land here for a number of different reasons. Some are simply looking for a good investment and don’t have any interest in living here. The simplest form of investment here is to land-bank: just buy a piece of raw land and let it sit for a few years and then sell it. The next would be to develop the land, build a structure on it that will then generate income. This can be a commercial, but is more often a vacation rental home or cabinas. This can serve to generate income and provide a vacation home for the owner while there is the substantial asset appreciation that Costa Rica land is currently experiencing. Then there are those that simply want to relocate to Closta Rica. Perhaps they are retiring and want to go where their fixed income dollars will go a bit further, or they may have an ideological reason for wanting to get to the jungles of Costa Rica.
I used to say that most of my re-locators were going to come down in 3 – 7 years. Well, I guess that some of those years have gone by and so now… here they are. Life here as we know it is changing.
Construction is going on now. There is lots of building going on, and its for this reason that this blog will be dealing a lot with that topic. I’ll be posting resources and info to the blog on a regular basis.
As for land, well there are some interesting things going on all around us. Up in what I like to call the “Gold Zone”, between Dominical and Uvita, there has been limited inventory over the last couple years. I’ve got some very lovely pieces up there. Nothing inexpensive mind you, but really nice stuff. Although, there is one piece up in Escaleras, about 3 acres for $235,000, with a big northerly view up to Manuel Antonio. The lot is sloped, so it would need some tractor work to make it build-able. Or, you could do the other way of building and do a pier type thing. This is where you pier up to the floor, leaving a space under the living area. Anyway, I think that it’s quite a good value. Since it is in the Escaleras area, there just isn’t much there and when there is, it’s expensive. Lots of vacation rentals around up there.

Also, there is the Big Screaming Development up at the top of the Escaleras development. Lots range from non-ocean view, but great valley and waterfall view properties starting at around $195,000 for good sized (5 acres) lots, up to $800,000 for mind-blowing, life-altering, Pacific Ocean view lots. This is by a long time resident of Costa Rica’s southern zone who is likely the best around, very conscientious and knowledgeable. (links to come)
Also, right here in Uvita we’ve got some very interesting ocean view villas that are beautifully designed and are, to my way of thinking, rather low priced. (links to come)
I’ve got a couple of pre-development projects in and around Uvita as well. One is just to the south of Uvita on the ocean side of the highway. It is in the flats there. There will be a commercial area and about a 30 villa complex with an easy walk to a gorgeous, in fact it is the Marina Ballena National Park beach. I will have the master plan to this shortly. If you want to get in on an early deal right there near the beach, drop me a line. (links to come)
I have just received an exclusive listing. This one was/is really cool since it is the construct that I live for in a business deal. The seller is a long time resident of the Dominical area. I have handled some of his property in the past and so can vouch for his conscientious and gentle nature. He had the foresight to buy in the maritime zone some years ago. It has taken the passing years to get the paper and legal work in order to make the property ready for market. He has approached me about marketing these properties in a non-rushed, lets just do it right, kinda way. He got in early enough to where there is plenty of profit in it for him to go the extra mile. This is a community of 15 lots, all within 200 yards of the ocean. There is water, electric, super-easy access, and even though the property is right on the ocean, the property rises immediately from the ocean, so it is up in the breeze yet still right there on the ocean. Anyway, this also is an early buy-in opportunity. They should start at around $500k for the first few. This is for a house on the property.(links to come)
Oh, I almost forgot, Whale’s Tail Estates. This is what will no doubt be the last of its kind in Uvita. Large, multi-acre lots, huge Whale’s Tail views (see photo to the left), and access down to a gorgeous stream (see photo to the right) complete with cascades and waterfalls. There are 6 single family raw lots there available.(links to come)
Last but not least, you’ve got the golf course going in about 15 minutes south of Uvita. You can pick up a ½ acre lot there for around $50,000. 10 minutes to a gorgeous beach, and the golf course itself is shaping up to be pro-quality. Click here for more info.

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