May 222012
 
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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 .

May 162012
 

Has the Costa Rica real estate market hit the bottom? As realtors in Costa Rica we frequently get asked this question, so we decided to share our thoughts on why there are signs pointing toward a positive answer. Regardless of what we think, more and more people are retiring, relocating, and investing in Costa Rica real estate. Thanks for watching and if you have a minute, please comment in the section below and “Like” this video on YouTube. The “Like” helps us reach more people interested in buying and selling Costa Rica real estate.

www.hotcostaricarealestate.com

Apr 282012
 


 

The Guys In The Zone discuss the state of the Costa Rica real estate market in Uvita. What does an abundance of property options–lots, large parcels, houses, and commercial–mean for buyers? Why are so many families and retirees relocating to Costa Rica? Drawing on nearly 15 years of experience, Ben and Rod answer these questions and more.

Apr 242012
 

We had an inquiry recently that concluded in a remarkable way. This gentleman said, “I will accept defective land due to lack of funds. (I was ripped off 5 times!).” I had to ask myself, how does one experience being “ripped off 5 times” in a country where the process of buying land it quite simple?

Sky's the limit... but buy smart.

The answer I came up with is… he didn’t have a good realtor.  I understand that there is this idea that you don’t need a realtor in Costa Rica.  It’s not a regulated industry.  The CCBR certification, which both Ben and I obtained in 2009, only means the agent is a resident and sat through four 8-hour days of Costa Rica real estate 101.  I understand the allure to buying direct– from a Tico, or from Craig’s List, or direct from a developer—as a way to save money.   In some cases that strategy works.  In other cases, like the original example above, it ends up costing you much more than the 6-8% a realtor earns in commission.

Your Purpose For Buying

You’d be surprised how many people don’t have a clear idea why they are investing in Costa Rica real estate.

The prospective buyer says, “We’re looking for a house.”

Ben and Rod ask, “Great.  Are you going to use it as a vacation rental?”

The prospective buyer responds, “Oh…. we didn’t consider that.”

The same clarity is required when looking for a raw land, be it residential or commercial.  I’m not going to talk specifically about commercial in this article, as most buyers are looking for a home or a lot to build a home. If you’re going to build a house, you should really have an idea of when you are going to build, and what the area and neighborhood will look like in 5-10 years.  And once again, are you planning on retiring in this new house or probably going to use it as a second home/vacation rental?  Are you going to have a caretaker/gardener/security guard?  Where is that valuable employee going to live?

Usually, these questions are asked and answered before our prospective buyer arrives in Costa Rica. Once they are here, we take them out to view property. I’m going to make a long story short and simply say, when buyers stand on the right property… it resonates with them.  Most of the time, they feel it even before they get out of the car.  This phenomenon is the product of clarity prior to driving around.

The Zone is small, and by that I mean it has a small town feel. News travels fast.  Like a few realtors in this area, we have accumulated a vast database of fact and fiction over our 20 years, collectively.  This is one of the biggest benefits to using an experienced realtor.  We know the history of X or Y development or property, and we disclose it. In fact, there are some developments that we simply do not represent and for good reasons. Also, we don’t over-hype things like the International Airport to get you to buy.

Contracts and Lawyers?

Ok, so you find your dream property. The next step is to write up an Offer to Purchase or a Letter of Intent.  These documents signify the buyer’s desire to purchase the property and outlines the price, deposit, due diligence period, escrow, and contingencies.  A contingency is the fulfillment of specific condition (e.g.- clear title, legal access to water, stable soil determined by a soil test, etc.). If a contingency cannot be satisfied or resolved, the buyer can get their deposit back.  The seller reviews the Offer Letter and often makes a Counter Offer.  Eventually you agree on a price, and we present the Offer Letter to your lawyer. Only problem is… you don’t have a lawyer yet.

This is one of the ways your realtor can save you money.  We recommend experienced, bilingual lawyers that actually return your email and/or phone call in a timely many. I sleep well at night knowing my clients are taken care of by one of these local legal professionals, because I have years of positive experience supporting this recommendation.

The lawyer then turns the Offer into a Purchase and Sale Agreement.  It is usually written in English, and then translated to Spanish to be submitted into the National Registry. All of the details are included in the document and it is reviewed by Ben and I, the seller’s lawyer, and seller.  Once the contract is signed, an escrow account is established.  I will be writing a separate article on escrow in the near future, but this is now required for all property transactions especially for those transferring monies from outside of Costa Rica.

Finally, the lawyer starts on the “due diligence” or discovery phase of the process.  If there is a problem with the title or an easement registered against the property, this is the point in which the lawyer will uncover it. Most of the time these discoveries are either acceptable or can be resolved by the seller.  (In the event that the problem is a deal-breaker, the buyer receives their deposit back.) Once everyone is clear and desirous to move forward, the final deposit (usually a wire transfer to the escrow account) is made. It usually takes 3-5 business days for monies to arrive in the escrow account.

A final closing statement is generated by the closing lawyer.  For more information on closing costs, click here.

Corporations

There is one intermediary step involved in the Costa Rica real estate process that is missing in a U.S.-Canadian-European real estate transaction– setting up a corporation. Virtually everyone owns their property (and automobile) in a corporation in Costa Rica. It’s a legal entity, recognized by the government, that stands on its own. There are two main types of corporations used for real estate in Costa Rica— the Sociedad Anonima (S.A.) and the Sociedad de Responsibilidad Limitada (SRL).  They are similar in function, but here are the main differences–

The S.A. has multiple uses and is a bit more flexible. It must have a Treasurer, Secretary, and President, who are separate people. It must have three registered directors and a controller, who is often the attorney who set the S.A. up and manages the associated protocol books.

The structure of a SRL is similar to the S.A except the shares cannot be transferred to a third party without the consent of the other shareholders who can have first right to buy those shares. An SRL can only have one manager administrator which is very appealing if you don’t want your name to appear in the registry, as it will on the S.A. This is the popular choice for investors who do not have more than 3 partners.

Our favorite part... the closing!

Closing

The last step in the process is my favorite part; the closing.  You, the buyer, fly down to Costa Rica and arrive at the lawyer’s office and sign the final deed and protocol book that gets logged into the National Registry.

Congratulations!  With your solid team of professionals supporting your clear desire, you are the proud owner of property in Costa Rica.

We have great deals in every property category, so please feel free to browse our listings.  The Guys… are here to help.

Apr 162012
 

What’s in a name? In the case of our company, I’ve heard comments about the name “Guys in the Zone” that range from: “not professional” to “that’s cool”. It all came about quite innocently. Spend any time at all in The Zone, and you’ll hear the term “The Zone” somewhere. We are a string of small towns and neighborhoods all along the southern pacific coastline of Costa Rica. From just north of Dominical, let’s say from Portalon south to Palmar Norte.

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The Zone: Where the mountains meet the Pacific Ocean.

The area around Dominical (named after a type of short banana called a dominico) caters to a large degree to tourism.  Dominical beach is world famous for its consistent break and is a challenge for the best of surfers.  So in Dominical you’ll find lots of surf shops, surf camps, surf schools and surfers from all over the world.  There are a few restaurants and gift shops as well.

There is a rather large-ish flat area around Dominical that is currently undefined.  I suspect that in time it will house various services and shops for the tourism industry: restaurants, hotels, shops, tours etc… But the area really isn’t that large. And, the area is finite.  It has the Baru river on one side, and it has the coastal mountain range running at an angle that pinches the usable flat area down to a configuration of a slice of pizza. There is room for growth there in Dominical, but not much.

The room for growth is in Uvita (meaning- little grape). The coastal mountain range that snugs up against the beach at Dominical, runs parallel to the ocean along the zone between Dominical and Uvita. At Uvita, the coastal mountain range angles inland and then comes back toward the ocean. This results in a triangular rim of mountains creating a bowl-like configuration around the flats that are Uvita. But that’s not all.

Right at about that point, where the ridge runs inland forming a triangle, there is a complimentary triangle of land jutting out into the ocean that is then adorned by Uvita’s famous Whale’s Tail. These two triangles of land, laying as they are, side by side, form a diamond, well – loosely speaking. But the point is (no pun intended) that the area around Uvita is vast in comparison to the flat usable area around Dominical, which leads us to the point (eh…) that Uvita gives all indicators of being the area where commercial, social and cultural happenings will be centered in the future.

This is important to the topic of real estate and investment concerns.  Early recognition of a trend can help to position oneself well for future payoffs.

Current News

Uvita is an interesting study in the melding of several cultures. European, Canadian and United States-ian cultures converge here with the existing Costa Rican culture.  I can’t say the existing “indigenous” culture since even the Ticos (Costa Rican’s) are European transplants, much like North Americans.

The Ticos seem to have an amazing tolerance for noise. Our Guys in the Zone office is located right in the heart of Uvita, on the coastal highway. The coastal highway is the main artery through Costa Rica now, connecting Nicaragua to the north, with Panama to the south. Consequently there are lots of trucks using this highway. Some trucks use the Panamericana Highway (which runs through the middle of the country), but most use the coastal highway through the main center of Uvita.  The trucks themselves are not the problem. What causes the problem is the fact that the drivers like to use their jake breaks as they pass through town, often at a higher than desired speed.

Now, to any civilized member of the human family, this borders on the ridiculous. These guys know that they are passing through an area of business, families going about their day and life in general going on – all of which is interrupted as we wait for them to pass through town with their truck blazing out the most obnoxious of noises.  This is what it sounds like:

GaaaghKaughhKhaaaKggggKKkkgggggggaghaghaha-KneeeeeeegheeeeeeeeeAhhhghaghggggggggg.

There’s even a “No Jake Brakes” sign hanging across the highway in Dominical, but truck drivers either can’t read it or don’t care.

Now, I’ll grant you that some of the more professional minded Ticos, such as the restaurant owners, will roll their eyes in frustration at the racket, but for every one of them that responds this way, there is someone whooping and waving to the truck drivers in greeting.

From where Rod & I sit in our front row office, Uvita could be one of the most beautiful little coastal hamlets in the world.  Everything grows here, especially the truly exotic varieties of flora that the Earth has to offer. Why the town resembles more of a strip mall than an exotic tropical oasis is a bit difficult to understand.  So, we weren’t surprised today when we received the request to post this announcement in our window:

“United We Can Achieve” – The Development Association of Uvita invites you to the Community Center of Uvita Costa Rica.  Important issues on the agenda:

  • Local control of ocean park entrances
  • The Boulevard – control truck speed & beautify the Costanera in Uvita

“The Boulevard” idea for the Coastal Highway is something that has got me a bit excited.  There is enough room to run a center area down the highway that can be planted with Almendra trees, that produce a type of almond. These are the type of trees that make lots of shade and are the main, if not the only, food for Scarlet McCaws.

    One of the strengths of The Zone is there are many people from different parts of the world.  We talk to most of them on a regularly basis, and to an individual, they want to create an active, beautiful life here.  Whatever growth Uvita experiences, moving forward, it’s nice to know that industrialization will be met with a vibrant and educated counter force.  That’s just some of the latest news for Uvita, Costa Rica.  If you want to know about all of the latest gossip and goings on, you have to take the plunge and make Uvita your home.

Mar 232012
 

I have received numerous inquiries over the last few days, from sellers of property here, asking how the season is going for Costa Rica real estate. Here is my answer.

Things having to do with real estate here in Costa Rica’s southern pacific zone are not getting better. I make this point because I understand that there is some talk about optimism in the U. S. economy. The stock market is high right now. Here? Well, they say it is the darkest hour just before it gets light – maybe that’s what’s going on. In my view, we are in a double dip.

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Dip #1

The world economy fell apart in 2008.  We experienced months of not selling. We continued to work, but we were not selling.  At that time I wrote 2 articles that discussed what it was like.

Article #1: There Is No Market Here – In that article I related a conversation I had with a former Wall Street analyst.  It was written in dialogue format:
Man: “You’re probably showing property, but not selling.  The people who are looking are not determined to buy, they would just like to see what there is and open themselves to the possibility of finding the piece that they can’t live without.  If they are going to buy, it would have to be a steal. But barring those events, there is no sale”.
Vaughn: Thinking to himself “I’d say that pretty well sums up our market place over the past year.”

Article #2: Kicking Tires in Paradise – “ They are intent on buying some land, they came here to buy land, they found land that will more than 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.”

Now, don’t get me wrong.  We have a number of clients who purchased land during that time, and they are happy with their purchases. We find that, despite the economy, the only “regret” statements we hear are “I wish I had bought.” 

Dip #2

In a recent conversation I had with one of my competitors here, he indicated to me that his company has had 9 strong deals going since January. Of those 9, 8 had fallen out, meaning they didn’t happen for one reason or another.

Here at Guys In The Zone we have had a similar track record. Deals falling out for the strangest of reasons.  One buyer due to health problems. Another fall-out was due to a seller not disclosing a legal problem he had with a property that he had listed with us. This in spite of having motivated buyers.

There is activity, but clearly buyers are content to wait for a more opportune moment that may or may not come. That is how I would characterize the current market. Between the first dip and the second, there was a period of near normal business around The Zone.

How to Explain

What is it that causes this sort of down trend?  As I mentioned, there isn’t a lack of action. There seems to be plenty of people around looking for land.  And the reasons for buying land in Costa Rica are on the increase. (It seems that people will always find Costa Rica real estate desirable.)

Many people are wanting to escape from the unpleasant situations “back home” (e.g., political, economic, insurance, stressful to name a few).  Some are wanting to get back to nature, live off the grid.  The Internet allows many people to live where they want to in the world and Costa Rica now offers pretty good Internet access, even deep in the jungle.  Early retirees are here looking to buy, especially now while the prices are so low.

Certainly it isn’t the quality of the product.  Costa Rica has, and will likely always have, the kind of quality that causes the majority of its visitors to wonder if they could make changes to their life such that they could make Costa Rica home.

I enjoyed a comment that I heard from a fellow real estate professional the other day: “I don’t like working with the $100,000 ocean view lots.  There are just too many of them.  You can take a person out and show them these beautiful properties. They fall in love with one of them, but they will not buy because they will feel like they haven’t seen them all, and that maybe there is a better one out there.”

Interesting point of view.  He focuses more on the higher end homes because the inventory isn’t so saturated, and a serious buyer will recognize that he needs to decide now on a property that he/she has seen and loved.

Sunset view over the Pacific Ocean.

I think that right now is about the best time I’ve ever seen to buy a property in Costa Rica.  But this would require a Warren Buffet perspective on the world. To buy when no one else is buying requires a toughness that only a few seem to possess.

It is an interesting time to be in real estate here in Uvita Costa Rica. I still feel that this is a good place to be, down market and all.  The trick now is to be content with a diet of rice and beans, and some of the most glorious displays that mother nature can dish up. It is a bit tough to earn a buck, but Costa Rica is a great place to live.

Mar 012012
 

We often get asked, “What is “The Zone?” Loosely defined, The Zone is an area in the southern Pacific zone of Costa Rica. The geography, the wildlife, the ecotourism, and the real estate opportunities in The Zone are unique to Costa Rica. We tell you why and hope this video inspires you to visit us real soon.

Feb 192012
 

Ben Vaughn, co-owner of Guys In The Zone Real Estate, explains the three listing options available to Costa Rican property owners. There is no Multiple Listing Service in the southern Pacific zone of Costa Rica, which expands the listing possibilities– the Open Listing, the Exclusive Listing, and the (new) Modified Exclusive Listing. Please visit Ben and Rod at www.guysinthezone.com and explore our current properties listings, our Talk Show, and general information about the greater Dominical area. Thanks for watching!

Feb 042012
 

In this episode, we start with a Q&A session and share a few tips for those retiring to the southern Pacific zone of Costa Rica. We also share specific ideas about property features that may not be on a buyer’s radar. Whether you are ready to relocate and retire or, like many of our Canadian clients, simply want a warm and sunny place to escape to when the weather turns cold, this Talk Show provides basic information and (hopefully) stimulates your desire to visit. Pura vida.

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.