Costa Rica Real Estate

This gorgeous natural swimming hole sits below one of the nicer homes in Uvita.

It’s one of the most popular questions we, the Guys In The Zone, field— “What’s been selling? We get this question from both buyers and sellers.  Generally speaking, the answer is— great deals.

PRICE

Price is the #1 determining factor for a great deal, but there is another factor that is equally important— the living experience.  Ben, my business partner in Costa Rica real estate, phrases it this way, “do any unique features of the property significantly affect the quality of the living experience?”

There are very few remaining places on the planet where things are (1) inexpensive and (2) incredible.  During the boom years of 2004-2008, Costa Rica real estate was inexpensive and incredible.  Large farms were purchased $1.00/meter squared and nice ocean view lots were under $100,000.

Three years after the peak of 2008, property values across the border came down between 40-50%.  Many houses are now selling for replacement cost or less.  Once again, we have large farms for $1.00/m2.  The obvious reason was the global economic downturn and continual 10:1 ratio of sellers to buyers.  Basic economics tells us that price, or in this case property value, had to come down.  Our listing database is now filled with good properties in every category—houses, land, large parcels and commercial.

THE LIVING EXPERIENCE

For most people, buying real estate in Costa Rica isn’t just about getting a great deal.  You can move to Orlando, Florida if that is your only goal.  It is about the unique features that significantly enrich the living experience.  When Ben and I get a new land or house listing that has an ocean view and a trail to a nearby river… Read the full story

So, the Guys have moved, once again.  We are now located in the commercial center across from

Guys In The Zone New Real Estate Office in Uvita Costa Rica

La Corona and Banco de Costa Rica.  We’re right next to Sonia’s Uvita Information Center.  If you are checking out at La Corona, and you look to your right across the street, you’ll see this image –>

So, why’d we move?  Well I’ll tell you, and in the process you’ll not only get an idea of what rents are going for in Uvita Costa Rica, you’ll gain some insight into the basic differences between men & women, so read on!

We moved from the second floor spot we had because we found that prospective clients simply didn’t want to go upstairs.

The capper was when I noticed that my gal Natalie would come to the parking area and call me on my cell phone.  I asked her why she did this.  Why didn’t she just come on in and talk vis a vis?  She said because she had a sun dress on and so Read the full story

“Few people actually stumble into wealth.”
- Smith Barney (although I couldn’t determine if it was Mr. Smith or Mr. Barney?)

In Part One of this article, I outlined how million dollar houses fit into the Costa Rica real estate landscape, specifically in the southern Pacific zone (The Zone).  There are a few obvious reasons to buy a luxury home in Costa Rica—

*  It’s A Buyer’s Market (Prices are down approx. 50% from the peak in 2008.)
*  Desirable Area (International Living Magazine rated The Zone as, “one of the top three real estate destinations in 2010.”)
*  Stable Prices For Construction Materials And Labor

The three-year Costa Rica real estate trend has reflected a significant drop in value, including property in the luxury home category.  Although there are some very nice million dollar homes in the area, this young market enables another popular strategy— Buy-And-Build.

Buy and Build

The majority of buyers who come down to the greater Dominical area with a plan to purchase a house, often end up purchasing raw land instead.  The reason is the area has a relatively small inventory of quality homes with floor plans and finishes that appeal to most North American and European home buyers.  So, they end up buy raw land or a lot in an established development, design their home with the help of a Costa Rican architect, select a builder, and then start the building process. Read the full story

In Northern California’s Bay Area, million dollar homes are very common.  They typically combine elements like— a desirable location, a large floorplan, upscale finishes, and/or estate-sized acreage.  My first position in real estate was in a beach area near Santa Cruz, and the power agent I worked for had no less than five million dollar listings when I joined her.  I just checked that broker’s website, and they currently have 307 houses listed between $1 million to $10 million.  Conversely, the Southern Pacific Zone of Costa Rica has a young real estate market and million dollar houses are less common.

Luxury Estate in Escaleras, Costa Rica.

As recent as 2006, this area was considered the new frontier in Costa Rica.  Access was difficult and more exhaustive than it is now.  Developments were few and far between.  Then, the real estate boom hit.  This boom affected all aspects of real estate—raw land, developing, construction, rentals and associated services.  All of the key elements for million dollar homes—desirable location, sweeping ocean views, large building sites, and affordable construction—were easily realized for a relatively affordable price.

Let’s start with the land… Read the full story

Seller Financing Open The Door in Costa Rica

The Downturn… (cue ominous music)

It would be easy to label the decline of the Costa Rica real estate market (since the peak in 2007) in a negative light.  In truth, there is no such thing as “negative light” only the opportunity for change, and if our market has seen anything over the past three years, it is change.  The shift from bank loans to seller financing is one of the primary changes that has (pardon the pun) opened the door to prospective home buyers, as well as, land and commercial buyers.

Before defining the effects, basic models, and legal structure of seller financing, let me back up just a bit to clarify why we now find it present in about half of the Costa Rica real estate deals we facilitate.  Like most lending institutions around the world, Costa Rican banks are better described as “institutional holders”.  Banks are not lending for a few reasons— falling real property values, the recession, and they are not lending to each other (e.g., no credit to leverage).  In Costa Rica, the debt-to-income ratio required to obtain a loan is as ridiculous as the double-digit interest rates being charged (often twice the rates in the United States).  The banks’ parsimonious response has opened the door to seller financing, and Costa Rican property owners have embraced the new paradigm.

Sellers Get Creative

“What do I need to do to sell my property?”  We received this common question too many times to count over the past few years.  Our answer typically included these answers— Read the full story

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.

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

[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

Talk Show – Episode 7

Talk Show – Episode 7

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.

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., 1^st through 6^th 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 5^th 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.

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

Talk Show – Episode 6

Talk Show – Episode 6

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.

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