Mar 092016
 

March 17, 2018: This article is primarily about how to buy property in Costa Rica with a limited budget, which is a timeless topic. However, there are a few dated points regarding available properties as well as my referencing one of my Tico Times articles, which has been moved or removed.

I’ve just submitted an article to Tico Times about the time we are in right now that is favorable for spec home building. Now let’s add to this another factor that is not as obvious. Well… it is actually every bit as obvious. It’s just that it is hidden, which is a gracious way of saying: neglected. And by virtue of it being neglected, it is a bit unknown.

Little House view

View from the “Little House”

The Zone is in an expansion period. There is a strong market here for existing houses. Many of these homes are in the $400,000 – $1,000,000 market and beyond. The realtors here are doing well selling these properties. When I get an ocean view house listing in the $350,000 range, I view it as solid gold, because this price point is in high demand, and relative to our market here, is in the low side of the range. It will likely sell quickly.

There is little to no financing on the purchase of a house in Costa Rica. This means that the buyer of a house needs to be liquid starting at right around $350,000. What about those that aren’t packing this amount of ready cash?

The Hidden Market:

One of my sellers of a $60,000 property has consulted with me about how he can sell his property. This man knows his way around The Zone’s real estate market. He has been involved in millions of dollars worth of property business during his time here. Why did he feel the need to consult with me? Answer: Because I took his listing.

He can’t get any of the local real estate guys out to his property to take the listing. They are not interested. Despite being low priced, his property represents a considerable amount of listing work. The real estate guy’s perspective is that he can spend his time taking a listing for, say, a $750,000 house, or for this man’s property that pays less than a tenth of the house. Duh!

I recently took a listing on a small, 1 bedroom, 1 bath house nearby to where I live in Playa Hermosa, which is a small Tico (Costa Rican) pueblo just north of Uvita. It had been refurbished by an investor. He had found an older Tico house that he fortified, re-tiled throughout, put in a small pool and generally fixed it up. The resulting house offered what many are looking for but are having a very difficult time finding: “Ocean view home, with pool for $129,000, 7 minutes from the grocery store”. Yowza! This took me less than 3 months to sell (quick by Costa Rica standards), and I continue to receive inquiries on the property. I wish that I had another dozen of these. Alas, I don’t. But, the same (or similar) effect of this property can be achieved in other ways.

Cracking the Hidden Market Nut: Buy one of the available lots on the market, build a modest but nice home on it, and you are in it for less than $300,000. You can then live in this house, or you can put it on the market in the under $300,000 range.

In my Tico Times article, I spell out a scenario where the house is priced at $429,000. Getting a house on the market for under $300k and that is well designed and well built, will result in a line at the door.

Properties similar to the Little House I had at $129k are nearly non-existent. These are so extremely rare that, even with the buy-and-build approach, are difficult to duplicate – difficult but not impossible. And this is the Hidden Market here.

If you’re reading this and wondering how you can bring a limited budget to the table and still own a home here in The Zone, you are looking into the Hidden Market. It may be that you’ve done some searching, and perhaps you’ve even found some properties that look like they’ll work for your budget. But then when you inquire, or look a little deeper into it, you find out why the property is priced as it is. It may be way out in the sticks, or the property itself may have some problems that explain why it is priced so low.

The caveat to solving the Hidden Market problem is that currently, all of the solutions I know of require buying raw land and then building. This is beyond what many are looking for or are willing to do. However, if you’ve got a limited budget, and you really want to own a home here in The Zone, consider buying and building. Your possibilities are: 1) wait for another Little House option to come on the market, or 2) buy one of the low priced, but good, raw land options and then build on it. If you are one of those that say “I can’t build in a foreign land”, then you are going to need to go with option #1. It may be a long wait.

The purpose of this article is not to go into the ins and outs of building here. That is for another article (or post your question below). Suffice it to say that there are some good options for doing so, and that some have even had good experiences building in absentia. I’m hoping that this information will help what I feel to be a rather large segment of the buying population who are frustrated by their inability to find a property in their budget.

Let’s get started. Here are a few properties right now that I feel qualify for the Hidden Market handle:

 

Uvita Costa Rica property for sale

The upper building site.

Town Uvita River Song

Ready to build, all services in, about 5 minutes to the grocery store and 10 to the beach. Ocean view, but in a very nice area.

Click to view

Inquire about this property

Price $99,000
Type Land
Size 2 Acres
Lot for sale in Uvita Costa Rica Town Uvita One half acre of nearly all usable land. Located about 4 minutes to the grocery store. Beautiful location. The services are in.

Click to view

Price $58,000
Type Land
Size 1 Acre

Ballena building site.

View of Roca Ballena from the $83,000 spec home lot.

Town Ballena South of Uvita:

Centrally located between Uvita & Ojochal. Looking straight out to the Roca Ballena configuration. This lot is ready to build. The water will need to be run from a neighbor’s well system. The electric is at the road the runs by the property. Ocean view including the Roca Ballena formation.

Price $83,000
Type Land
Size 1 Acre+
A sort of companion article with links just posted: “Disappearing Breed: Under $100k Ocean View Lots”

If you haven’t read the Tico Times article that I reference at the start of this article, do so. You can scale down the costs outlined there for construction to calculate if you can buy one of these properties and then build on it. Ah what the heck, I’ll do some of it here. (I’ve hit my 1,000 word limit. As a blogger I’m told that you, dear reader, have a declining attention span for reading such length. Let’s prove ‘em wrong.)

Let’s find you a builder who can build your house for $85.00 per foot. Let’s say that you want to build a 1,200 sq. ft. home. Your building costs will be $102,000. If you want a pool, add $15,000. And then let’s add another $10,000 for permits, landscaping and incidentals. So your costs are right around $130,000. Add the price of your property and you’ve got your Hidden Market home.

Fiddle with these numbers. Keep in mind that we are in Costa Rica for a reason. And this reason isn’t to be sitting inside watching the tele. Build your house cheap. This isn’t to say “low quality”. Just enclose & secure the bedrooms, bathrooms and (if you like) a media room. Go ahead and have plenty of areas under roof, but who needs walls? Your kitchen can even be open-air here. What we need is a place to sit, do yoga, talk with friends etc… that is protected from the sun and the rain.  That $85.00 per foot figure can be pushed down.

Or try this: buy that $60,000 property, build a decent abode on it for $70,000, and you’ve duplicated the Little House scenario, just without the ocean view.

 

Dec 312012
 
One of the screaming ocean views in the southern pacific zone of Costa Rica.

The place is packed. More and more people who bought land in the past are building or have built (and are happy about it.) Travel & Leisure put The Zone as the #1 place to visit for 2013. What the heck is going on?

I was invited to a house christening last night by Richard & Debby up at Costa Verde Estates. It was a small gathering, made up primarily of migrators, most of whom have just recently built a house or are in the process of doing so. I observed and heard some rather interesting indicators of a tipping point there.

One of the screaming ocean views in the southern pacific zone of Costa Rica.

Richard & Debby: Living the good life in Costa Rica’s southern pacific zone. The view is partial, and is from their home in Costa Verde Estates.

  • numerous statements of an obvious love of Costa Rica and The Zone in particular
  • they were happy with their builder and the process was relatively smooth
  • comments about the resources now available to a home builder in Costa Rica
  • comments about how many people are talking about The Zone back home
  • comments on how many people there are vacationing in The Zone
  • how packed the hotels and vacation rentals are
  • guesses as to what the next 10 years are going to be like here
  • the reality (or not) of the international airport going into Palmar Sur (majority – NOT)
  • the effect of the highway being paved between Quepos and Dominical

There was a palpable feeling of “we are at the tipping point” here.

The facts that alcohol consumption Continue reading »

May 222012
 
alt="off-the-grid-house-in-costa-rica"

My business partner Ben likes to call them the “End of the World-ers”. People who have reason to believe there will be major global changes in the near future. They are interested in buying land and living off the grid in Costa Rica. By off the grid I’m referring to not being connected to the government-run electrical system. They are looking at Costa Rica as a relocation option, because of favorable factors like- weather, low taxes, friendly culture, good health care, etc. Recent “End of the World” clients include– a couple from France interested in le Costa Rica, a large family from California tired of the rat race, an eco-hotel group from Switzerland… clearly, living off the grid in Costa Rica is on the global radar.

solar powered cabin in costa rica

Off the grid… in the jungle.

If you’re anything like the aforementioned relocators wanting to buy land here, you’re in luck!  There are many big fincas (Spanish for farms) in this renewable energy Eden.  We use the term farm, but only a very small subset are actual working farms with barns, cows, and roosters.  Drive 15 minutes into the mountains above Uvita or Ojochal and you can find stunning property with flowing water; some even have ocean views!  The best news is you can grow many different types of food in the mountains of Costa Rica.

Most big fincas range from a short walk to town (and close to electricity lines) to 25-minute 4wd dirt road drive to town and no electricity for kilometers.  The beauty, privacy and value of farms way up in the mountains are exemplary, but what to do about power?

Solar

Installing a solar power system is smart, especially in the southern Pacific zone of Costa Rica.  This region sits at around nine degrees North of the Equator which offers 12 hours of Sun/day, and there is relatively little variation throughout the year. Solar panel energy production is calculated at half that number (6 hours) in rainy season and/or at higher elevations that often have more clouds cover.

Reportedly, Costa Rica has agreed to lift the tariff on imported solar panels and accessories, so the price to install a solar system shouldn’t be as cost prohibitive, moving forward.  Solar systems with batteries for storage are completely self-sufficient.  In addition to solar panels and an inverter, this type of system requires batteries to store the energy created for use at a later time.

If you’re going to be off the grid, experts recommend an alternative energy source to compliment the primary system.  This is especially true during months with heavy rainfall/cloud cover (September-November).  Gas-powered generators are nice to have, but for truly sustainable off-grid power, you’ll want to consider hydro or wind turbine options.

Wind and Hydro

If you think about it, wind… is actually a form of solar energy. The earth’s atmosphere is heated unevenly by the sun and this phenomena (modified by different terrain—bodies of water, vegetative cover, etc.) creates wind.   We see a version of this here in the southern Pacific zone of Costa Rica.

Every day around 10am, an ocean breeze blows on-shore.  This breeze lasts for five or six hours and tops out at around between 8-10 knots.  Most (affordable) wind turbines need more than 10 knots (11.5 km) to generate substantial kilowatts/hour number.

Hydro power, on the other hand, is viable option if your property has a river on it with a significant drop in elevation.  According to Paul at Osa Water Works, these small-scale hydro systems can produce over 2kw/hour (that’s 48kw/day!).  Paul bases energy consumption at around 30 kw/day as an average.  Obviously, that average will be higher if you have a swimming pool on your sustainable farm, but something tells me that’s probably not high up on your list.

Rio River In Uvita Costa Rica

Rivers = hydroelectric potential in Costa Rica.

What is high up on the list is water.  Fresh water, usually in the form of natural springs and rivers, or a year-round creek at the very least, is a must.  If you are going to buy land and live “off the grid”, you would be smart to buy a property with a river running through it or along one of its borders.  This is one of the few continuous (as in 24 hours per day continuous) renewable power resources on the planet.

There are a couple of details specific to Costa Rica, namely obtaining a concession (i.e., legal right to extract water from a given source).  In the interest of providing legit information, I asked hydro-expert Paul Collar at Osa Water Works about concessions as they relate to hydro-systems,

“Technically, you are not mandated by law to have a concession for any water extraction.  However, you are expected to apply.”

I asked him if the river had to run through the property or simply run along one of the borders.

”You do not have to own the land adjacent to where the water is being extracted to secure a concession, BUT, you must bound the river at some point, preferably continuous to the property where the water is to be extracted.  As part of the concession application, you ARE REQUIRED to make the bounding property owner aware of your intentions and he must either sign off and agree to your request… or alternately you must sign (and have a witness sign) to the effect that the bounding property owner was made aware of your intentions but refused to sign the form in question… however, having an agreement between the parties is infinitely preferable as a hostile relationship poisons the well.

I found Paul’s comments (and pun) insightful, and many others seem to agree given his business activity has remained strong during the downturn.  Although not specific to “off the grid” clients, his final thoughts on Costa Rican governments move to allow small scale, alternative energy systems (solar, wind, hydro) tying into the grid.

“ICE is presently in negotiations with Setena and MINAE to ELIMINATE the requirement of a concession (for grid-tie systems).  At present, the wording is that a concession must be in hand for a completed grid-tie hydro authorization, but since concessions take up to two years and ICE is fully behind their grid-tie initiative, this agreement is expected to smooth the path to hydro permitting for most. 

For an overview of Water in Costa Rica, I wrote a two part article a couple of years ago.  Costa Rica is considered one of the more “green” or environmentally conscious countries in the world.  The government has repeatedly stated its intention to be carbon-neutral by 2021.  That’s only 9 years off, and it’s one of the reasons Costa Rica real estate is on the radar of many people who want to relocate and live a more independent and sustainable lifestyle.

For more information on Costa Rica real estate, browse our listings at: www.propertiesincostarica.com  or contact us on our contact page here.

For more information on alternative energy systems in Costa Rica, contact Paul Collar at Osa Power and Water 011-506-8704-0027 or visit his website:  www.osapower.com .

Nov 102011
 

Even though we call it Talk Show 15, this is indeed the 16th Episode of the Guys In The Zone Talk Show. This episode delves into the topic of construction in Costa Rica. Ben, the founder of Guys In The Zone, interviews Matt Callero of Mango Construction (mangoconstruction.com). Matt offers some answers to the popular questions– Is it difficult to build? How much is construction per square foot? And, what trends he foresees unfolding in the southern Pacific zone. Enjoy!

Jul 182011
 

This is our mid-year review of real estate in the Southern Pacific Zone of Costa Rica. With tourism numbers up 11% in Central America, Ben and Rod discuss how this trend points to a brighter future for The Zone.


Costa Rica Real Estate – Talk Show 13 by GuysInTheZone

Dec 132010
 

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

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

In Part One of this article,

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. Continue reading »

Nov 192010
 

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… Continue reading »

Oct 122010
 

The Costanera Highway, The Caldera-San Jose Highway, The Cortez Hospital, The International Airport and The Diquis Hydroelectric Dam… it is easy to see that Costa Rica is serious about improving its infrastructure and securing a bright future.

Over the past decade, the dramatic increase in tourism and investment has sparked a bit of a power-struggle between proponents of economic growth and socio-environmental protection groups. In this case, the “power” is the proposed billion dollar hydroelectric project called “El Diquis” near Palmar in the Osa Peninsula. This isn’t recent news, but I believe it is worth mentioning as it will affect life in various ways in the southern Pacific zone of Costa Rica.

Hydroelectric power is BIG in Costa Rica.

The Zone Is HOT

This large-scale project, facilitated by I.C.E. (Instituto Costarricense de Electricidad), is calling for the construction of a dam on the Térraba River in the greater Boruca Canyon. The dam will create a lake equaling approximately 25,000 surface hectares (over 6 million acres), the largest of its kind in Central America.  By comparison, Lake Arenal is roughly 8,500 hectares.

This station will generate up to 630 megawatt units capable of providing over one million families with electricity!  This project is about Power, both electric and economic.  According to a Continuum report commissioned by the Costa Rican government, Continue reading »

Oct 052010
 

While browsing the storefronts of Quepos the other day, I saw this Hurricane History Map in an office window.  What caught my attention was how Costa Rica was completely free of any direct hurricane/tropical storm trajectories.  People ask us if we get hit by hurricanes, and now it’s nice to have a chart showing just how ideally located Costa Rica is, especially on the Pacific side.  Clearly, the vast majority of tropical storms and hurricanes are born in the oceans to the west and especially the east of Costa Rica, and then almost always track north.  In recent years, only Hurricane Cesar and Hurricane Mitch (1996 and 1998, respectively) traveled all the way across the Central America landmass.


Even though Costa Rica is Hurricane-free Zone, it still feels the effects of heavy rainfall from time to time.

During the hurricane season, June 1st – Nov. 30th, Costa Rica will occasionally feel the effects of these major hydro-meteorological events.  Tropical storms are more common than hurricanes in Costa Rica, and it is important to note that heavy rain isn’t the same as heavy rain AND 100+ mph winds!

According to this NASA webpage, “Tropical cyclones are like giant engines that use warm, moist air as fuel. That is why they form only over warm ocean waters near the equator.” The small towns in our area (e.g., Dominical, Uvita and Ojochal) are located at approximately nine degrees north of the equator.  The benefit of being at this latitude, and on the Pacific side of Costa Rica, is the wind is significantly lighter than along the Caribbean storm corridor where hurricane winds can rip off your roof.  I suppose that’s why the famous Portuguese explorer Ferdinand Magellan called the Pacific Ocean, Tepre Pacificum or “Peaceful Sea”.

What Does This Mean For Pacific Zone Residents and Investors? Continue reading »

Interested in Costa Rica real estate as an investment. They primarily live somewhere else, but they own property in Costa Rica for the asset appreciation potential as well as possible rental income. Some just buy and hold (land-bank). For developed properties, the investor has a vacation home to visit as desired.

Migrators spend a regular amount of time in Costa Rica during each year.

Re-locators are those that are looking to move to Costa Rica from wherever they are. They will live full-time in Costa Rica.