For Retirement, Vacation Living or Investment: Finding a
Nice Community in Costa Rica
By Andrew Mastrandonas & Preston Gitlin
Costa Rica
is an alluring place for many people. With a terrific climate, stable and democratic government, proximity to
the United States, lower cost of living, and many outdoor and cultural
activities, it is no wonder this country only the size of West Virginia remains
one of the best in the world for a vacation, retirement and investment. Over one million people visit Costa Rica each
year generating about $1 billion in revenue for the country. Tourism surpassed coffee and bananas many
years ago as the country’s top industry.
Foreigners,
particularly North Americans, continue to visit Costa Rica in large numbers
with many of them coming to explore retirement and real estate options. A quick search of “Costa Rica real estate” on
Google reveals almost 2.8 million entries. Compare this to any other country on the Central American isthmus, and
it’s clear that Costa Rica is first in activity related to real estate geared
to foreigners. Since real estate sales
are not regulated in Costa Rica—anyone can be a real estate agent or land
developer—everyone seems to be involved in real estate in one way or another
here. And, with the advent of the
Internet, anyone can create a website and offer properties for sale. Usually Americans or Europeans, they seek
out Costa Ricans with land or homes and put them on their websites. There are, of course, well known, established
real estate companies like Century 21 and Coldwell Banker in Costa Rica as
well.
People are
finding these websites and doing much research through the Internet to explore
various regions, view land and homes for sale, and make contact with real
estate agents and others. After spending
weeks and months doing research and finding people they think they can trust,
they make the trip to Costa Rica, ready to purchase their dream property. When they finally arrive in Costa Rica, they
oftentimes realize it is a much different place than they expected—sometimes
for the better and sometimes for the worse. For example, they don’t realize from the stunning pictures they found on
the Internet that the home of their dreams is next to an automobile repair
shop. The stories go on and on.
We find that
if you do your homework first and then visit, you will likely be in better
shape than others. Contacting developers
by email, carefully reviewing their websites, talking with others who have
brought property from them, and asking a wide range of questions about their
properties will likely give you a good sense as to whether you should view a
particularly property. Even with all of
the research many people conduct, with a strong increase in real estate values
year after year in Costa Rica, many people feel they must “get in now” in order
to ensure they can afford it. With
appropriate research, asking the right questions, and carefully thinking about
what you want in terms of a living situation, you can find a property you will
like, even during a short stay in Costa Rica.
Yes, it is
true that property continues to appreciate in Costa Rica, and faster than in
many other countries. Before long, the
country will not likely offer many real estate bargains unless you want to live
in very small towns far away from shopping, restaurants or good medical care. So, how can you “get in now” and avoid the
mistakes many people make in purchasing real estate here?
Initially,
take the time to get to know the country. Get to know a wide variety of people. Understand real estate values in a particular area by talking to many
people including real estate agents, developers, foreigners living in the area,
and even locals. Stay in several
different towns and get to know each of them while being mindful of your needs
for shopping, medical care, entertainment, real estate, and other issues.
It wouldn’t
hurt to pick up some Spanish because learning directly from locals about new
properties or getting real information from them about an area could prove much
more valuable than hearing it from people who are in the business of trying to
sell you something. Even if you speak
just a little Spanish, “Ticos” will very much appreciate your efforts to
communicate with them and oftentimes will go out of their way to help you.
There are also
several “retirement tours” of Costa Rica that provide a multi-day trip through
various parts of the country, introducing foreigners to specific towns that may be suitable for
retirement or finding good quality and reasonably-priced properties. On many of these tours, you’ll meet others
who have already made the move to Costa Rica and purchased property. You will also meet a wider variety of real estate
agents and developers than you could probably do on your own. And, just by interacting with other tour
guests, you’ll learn about what other people are thinking as they consider
Costa Rica for retirement, partial-year living, or investment.
Some of these
tours will also introduce you to attorneys, architects, builders, and others
who can be helpful to you as you consider buying land and building a home or
purchasing an existing home. Take a look
at their websites and determine if what the tour offers and the types of
clients they serve seem to be geared to your lifestyle. Taking a tour is a convenient way to screen a
range of properties quickly, meet experienced developers and learn about areas
more quickly than you likely could do on your own. After you’ve taken a tour, definitely stay
for several extra days, going back to the areas you liked on the tour or follow
up with some of the people you met during the tour. Two of the more well-known tours in Costa
Rica are: “Boomers in Costa Rica,” at http://www.boomersincostarica.com
and “Live in Costa Rica,” at http://www.liveincostarica.com.
Whether
you’ve spent time on your own or took a tour you may have discovered an area or
property that may be right for you. What
do you do then? What factors should you
consider in determining if you should purchase a property? In other words, what makes a nice community
for you to enjoy for many years to come while ensuring you feel you got good
value through your purchase and can trust the seller of the property?
As in the
United States and other countries, there are many resale homes of all types,
sizes, ages, quality and prices so we won’t focus on homes, rather, we will
look at purchasing land and building in a community as this is more typical for
many foreigners who want to move to Costa Rica.
The
development of communities geared to foreigners is by no means new to this
country. It has been happening for well
over a decade, particularly on the Pacific Coast and in the suburbs of the
capital, San Jose. However, development
continues to occur, with no end in sight. And, because in many cases, an investment in land is still relatively
affordable to most developers and the profits can be significant, planned
communities, or simply subdividing raw land into smaller parcels and selling
them to foreigners, continues to occur frequently.
A quick look
at the various glossy real estate magazines, written in English, and oftentimes
produced by the Costa Rican arms of international real estate companies make it
apparent that the choices for a retirement home, condo, or land to build your
dream home are staggering. Do you want
the beach? There are many communities on
or near the beach. Do you like to play
golf? There are several golf options to
choose from. Perhaps a community in one of the
quaint mountain towns west and north of San Jose is for you? There are many communities that offer a range
of home and/or land options with stunning scenery. Your choices are virtually limitless.
If you are
considering a community for your retirement or vacation home, what factors
should you consider? Of course, what
will make you happy is a personal choice and no one should sway you as to what
you need. In
Costa Rica, for example, many realtors and developers often quote they have
“the best climate” or that their project is “convenient to_____” (fill in the
blank). The point is that no one can
tell you what you need, and you alone (or with your significant other) should
do your homework and decide what is best for you.
If you think
you want to live in a community, below are some considerations to keep in mind:
Do you prefer a planned, gated community where
you are close (or fairly close) to your neighbors or do you prefer a more
unstructured community, perhaps with a few less amenities and in a more natural
setting?
Would you prefer to live among people similar to
you or would you prefer to integrate into a community that is primarily composed
of Costa Ricans? Perhaps a combination
of foreigners and locals is best for you?
· Do you prefer to live in a home or a
condominium?
· How big of a property do you want and can you
afford to maintain it?
Are you more interested in a community that has
set home plans to choose from (or existing homes already built) or would you
rather hire an architect and design and build a home?
Once you
have narrowed down the type of community you might want to live in, below are
some factors to consider when comparing among several you have looked at:
·
·
|
Attributes
|
Property 1
|
Property 2
|
Property 3
|
|
Location
|
|
|
|
|
Buildable space
|
|
|
|
|
Privacy
|
|
|
|
|
Quality of infrastructure
|
|
|
|
|
Type of residents
|
|
|
|
|
Climate/weather
|
|
|
|
|
Natural setting
|
|
|
|
|
Community amenities
|
|
|
|
|
Distance to town/services
|
|
|
|
|
Price
|
|
|
|
|
Investment value
|
|
|
|
|
Overall Quality
|
|
|
|
1 = excellent
5 = poor
NA = Not applicable
While there
are other considerations as you look at possible places to live, the table
above is intended as a general guidepost you can take with you so you won’t
forget about the attributes you liked and disliked for specific developments,
particularly if you are looking at many of them.
Of
particular importance in your decision-making should be climate and weather. Costa Rica has many microclimates and this
will affect the weather where you might decide to live, particularly in
comparison to nearby areas. For
example, at a given hour it might be sunny in town but just 2-3 miles away it
could be raining. Because elevations
change quickly in Costa Rica, so does the weather. It is important to consider the amount of
rainfall; low, high and average temperatures; and wind throughout the day and
at different times during the year. Many
shady developers will try to show you their land at the right time of day or
year and claim the weather is always terrific. Ask people in the area—those who have lived in the area for years—to
give you the real scoop on the climate and weather.
Another
important consideration is the infrastructure provided by the developers of the
community, particularly, electricity, water, and telephone service. Obviously, if you are going to buy a lot and
intend to build a home you will need assurances in writing from the developer
that at a minimum electricity and water will be provide to your “lot line”
prior to closing on the property. Usually, it is the buyer’s responsibility to bring the electrical and
water lines from the edge of the lot to the home. Most architects or builders will help you get
this done as part of their services. However,
one of the key problems buyers are facing is lack of understanding as to where
their water comes from. Many developers
are building wells and then telling their clients not to worry because everyone
in the community will have access to water. But, who is going to ensure each member of the
community chips in for his or her portion when the pump breaks, or when so many
homes are built that the area needs a new pump? It is also possible that down the road, if your community’s water supply
does not come from the local municipality, any shortage will be your problem well before it’s the
public’s problem. When deciding on a developer to trust, demand information
about the proper water studies he or she should have completed and municipal
help he or she should have requested. While telephone service is standard in
most places it is possible that it will not be available immediately as the
government may not have the resources—or may be behind—in providing land lines
to new homes. In some areas, it may
take many months, and indeed years, for telephone service to be provided. However, this is usually not an issue for
most people as they simply purchase cellular service which is readily available
and inexpensive.
In the U.S.
and other developed countries, most of us have lived in communities where there
were paved streets. In Costa Rica, some planned communities don't offer
paved streets. Instead, many
communities use lastre, a combination of hard rock and sand, which handles the
affects of rain a lot better. Lastre roads are actually quite nice, easy
to maintain, and keep expenses low for both the developer and the residents of
a community.
However, lastre
roads can be troublesome if your developer is not experienced in creating
roadways. As many people know, Costa Rica has two seasons: the dry season
(from December to May) and the rainy season (from June to November). A good lastre road needs to be able to
survive the rainy season. Some developers put in lastre roads in
the dry season just to see them washed away in the rainy season, and
oftentimes, the residents of a community get stuck with the bill for new roads
or repairs. How do you know, then, if the road put in by a developer is a
good one? First, and foremost, keep in mind that the surface of the road
is only part of the story. A pretty road with nice rock and sand will
look good but if the developer hasn't considered what's around the road--or
what will "attack it," it may not last through the first rain of the
season.
Taking into
consideration rainfall and proper water drainage is critical. If the
developer hasn't put in suitable drainage, rain water may spill into the road
from various parts of the development and make a mess of it. So, when
looking at a lot you potentially want to buy, talk to the developer about the
roads and understand how they were constructed, how drainage is handled and
what happens if the road needs repairs. Second, find out to what extent
the developer has put drainage pipes under the road in areas that may require
them such as if there is a small stream or spring that drains near a
road. Third, ask about the type of culverts and drainage pipes that are
under the road—called “alcantarillas”—and how big they are. The alcantarillas need to be big enough to handle the anticipated water
drainage. Finally, before buying a lot it wouldn't hurt to go out to the
property during a heavy rainstorm and see for yourself.
There are many
examples of both terrific and poor communities in Costa Rica. In fact, most people will be able to tell
fairly quickly if they believe a development is well-planned, conveniently
located and well executed just by seeing the project, talking to people in the
area, and learning about the types of people who have already purchased property
in the community. However, it is
important to ask many questions of the developer or sales person before you
purchase. One of the most important
issues to address is how accurate the survey work is for the property you are
interested in. For example, in our own
experience we bought a large farm from a cost-conscious developer who had already hired his inexpensive surveyor to
segregate the farm into smaller parcels. We later found out that the surveyor didn’t properly survey the borders.
If we had not caught his mistake,
unknowing lot buyers would have bought land that they didn’t completely own! If you are not
happy with the answers you getting, move on, as there are many other choices
available.
Communities in
Costa Rica are not unlike those you would find in other places. For example, you can find communities with
high-rise condos and others offering low rise “garden style” homes—both with
limited land and easy maintenance. Other
people prefer larger tracts of land in former agricultural areas which
generally have 5000 square meters (1.25 acres) to 7000 square meters (1.73
acres) of land, depending on local zoning requirements. Building space in agricultural projects is
ample for single-family homes, guest houses, pools, and more. Finally, many developments, built primarily
for the local population, called “urbanizacion,” typically have smaller lots
and homes.
While there are
many developments in Costa Rica, below are a few examples known for both their
high quality and value for the price and/or investment purposes. These samples differ in price but they give
you a flavor for what is available.
DelPacifico – http://www.delpacifico.net (Pacific Coast)
Pacific Hills at Magallanes – http://www.crcommunities.com/PacificHills.html (Central
Valley)
La Joya de Esperanza - http://www.everybodylovescostarica.com/costa_rica_real_estate.php (Pacific Coast)
Plantation Estates - www.plantationestatescr.com (Central Valley)
It’s rarely said that looking for real estate in Costa
Rica is not an adventure—it can be. However,
it can also be much fun if you keep your eyes and ears open and go with your
most important emotion—your common sense.
Happy hunting!
Andrew Mastrandonas, a former airline industry executive
and management consultant in the United States, lives in Costa Rica where he
owns a relocation tour company designed to provide an introduction to Costa
Rica for retirees and others considering moving here. He also owns a bed
& breakfast and writes about travel, community issues, and culture for a
variety of publications, including the Tico Times. Andrew can be reached
directly at boomersincostarica@gmail.com. Preston
Gitlin, President of CR Communities, a real estate development company
offering ocean view properties in San Ramon, contributed to this article. Preston can be reached at pgitlin@crcommunities.com. More
information can be found here: www.crcommunities.com, www.boomersincostarica.com, and www.AngelValleyFarmBandB.com.
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