The History of the Real Estate Cycle in Ojochal, Costa Rica

May 11, 2023 in Selling Process, Buying Process, Tips for Buyers, Real Estate in Costa Rica, Life in Costa Rica

Prior to moving here, I used to visit my parents living in Ojochal, Costa Rica, and wonder about all of the real estate signs everywhere.  I have always enjoyed coming here and I was curious as to why anyone would ever want to leave if they have already found a way to stay?  Isn’t this the place where people came to live a different kind of lifestyle and to get away from the stresses of first world living?  Why are people wanting to get away from peaceful, healthy living; to go back to traffic, noise, and pollution?

It wasn’t long after moving here that I realized that there is a cycle to life everywhere in the world.  Taking time out from the “usual” to escape into nature and self is just one step in the human life cycle.  Expats started to move to this South Pacific region 30 years ago on the heels of the local agrarian community.  Despite ebbs and flows in the decades since, the Costa Ballena region of South Pacific Costa Rica has maintained a relatively stable population, thanks to the natural progression of human lives.

The psychology of expat investors

Many people come to Costa Rica in their youth and fall in love with the blanket of colorful, vibrant wildlife, and the friendly, laid back and welcoming nature of the people.  It’s warm and inspired, giving visitors more significant memories to remember it by than mere souvenirs.

According to psychologist Erik Erikson, the human life cycle has 8 stages.  At the sixth stage (from 18 to 35 years old), humans are generally dealing with the significant conflict of Intimacy vs. Isolation.  Young adults are searching to find ways to settle down and learn love.  They spend this chunk of their lives dreaming about their goals and working hard to find the means to make the annual vacation escape a more permanent reality.

These young adults come to Costa Rica periodically, maybe once a year or every two years, and start thinking about investing in their own piece of paradise.  They have already fallen in love with the land and the culture, and they start learning from others that its a fairly simple process to invest in real estate and business in Costa Rica as a foreigner.  Banking laws make the investment process comparatively transparent, with no hidden loopholes for keeping your money hostage, and no need to be a resident to have the same laws apply to the foreign investor.  And if an investor makes a purchase of Costa Rican assets totaling $200,000 or more, they have an automatic path to residency, giving them rights to the government funded Caja health system.

In the seventh stage (35 to 55 or 65) of the life cycle, humans face the conflict between Generativity vs. Stagnation. Some refer to this as 'the midlife crisis,' when adults assess their contributions to society, or they may become self-absorbed and stagnate in their development.

This is the age group where humans are capable of learning and exercising real care.  At this age, people who want to pursue continued "generativity" (a psychology term meaning "a concern for the future; a need to nurture and guide younger people and contribute to the next generation") tend to buy land in places like Costa Rica.  They are ready to pursue early retirement, or are in preparation for this transition to post-career status.  They may not be ready to stop working altogether, but they are wanting to invest their hard-earned years grinding away in the past to now pursue their works of passion.

Why expats choose Costa Rica

Many people, both nationals and internationals, come to the South Pacific region of Costa Rica seeking a healthier way of life.  They want some land to tend to and grow some of their own food.  It is popular to have more than a few fruit trees, small herb gardens, some lettuce varieties, root vegetables, and maybe even a few chickens for eggs.  There are people who do more than this and some who do less.  The beauty of this land is that it is fertile and ready to bear the fruits of even the smallest labor.  Sometimes, all it takes is throwing some seeds on your lawn for something that you never could have imagined to take root.

Early retirees who find themselves in Costa Rica may open a small business - some rental units on their property, a gourmet ethnic restaurant, or some kind of goods or services.  Our Costa Ballena communities are always growing, thanks to the skills and initiatives of expats from around the world bringing their craft with them.  These expats may not even come here intending to work, but word of their hobby of fixing motors gets around and pretty soon they are known as the village mechanic.  There are countless success stories of people who moved here and found their niche in a relaxed environment, able to continue working while loving their everyday lives, no longer dreading to wake up in the morning, to start the first world routine.

Why expats turn back

Life in Costa Rica can be viewed as both more expensive and less expensive.  Bags of Doritos are $5 USD (gasp!), but if you can learn to simplify from a first-world pace (meaning things like eating less packaged or pre-prepared foods, driving less, and self-subsisting more) you will find that living in Costa Rica is considerably less expensive.

For one, there are fall fewer varieties of places to shop.  Although we have beautiful boutiques scattered throughout our Costa Ballena region, they are far less in your face and tempting than the shopping malls in first-world cities.

If you are a resident, another big saver is that you have access to the Caja health care system, which covers nearly all medical expenses and significantly subsidizes prescription medication.  This is a great asset for expats who are early retirees, and likely not needing constant medical attention (for which people may find the periodic wait-times in the Caja system to be detrimental to their more immediate health needs).

According to Erikson’s theory, In the last stage of life (65 onwards), people face the conflict of Integrity vs. Despair: when individuals look back at their accomplishments in life.  They want to share these accomplishments with the young families of their children, and they want to share their accumulated wisdom with the whole of their community.  During this phase, many people return “home” to where they came from before Costa Rica, with a few going back even further and returning to their root heritage-land.

Those who can't bear to leave

Of course, there are the true blue adventurers who are continuously looking for the next challenge, and the set of lessons that will inevitably come with.  Expats to this region include a wide variety of ages, with a wider variety of reasons that brought them here.  Regardless of their origin, they come here with their ideals for what they want out of their Costa Rica experience.

Over a few years’ time living here, every expat learns new things about themselves and what they need and don’t need in their everyday lives.  Their definition of ideal shifts and changes.  For instance, the newly arrived may not have considered the amount of labor that is required to maintain a large, landscaped lot and they didn't intend to be doing 4 hours of garden work every day.  Their next investment may likely take that fact into account and they may buy a smaller home, or something in a gated community where the HOA takes care of the grounds.

In any instance, the lessons that expats learn in their time in Costa Rica will carry forth with them, wherever they go.  And for anyone who has spent any time learning from this land, we know that that’s a good thing.

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