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

Investors have always found real estate to be a safe bet.  Investing in housing markets in places like Canada, the US, and Western Europe have traditionally been one of the best ways to build a fortune.  But some of today’s investors are looking for something extra and those who are willing to take on a bit more risk can look to markets further afield that hold a promise of a greater return on investment.

As a team of agents who have helped hundreds of clients find and manage property in South Pacific Costa Rica, here are our top tips for those investors who are searching to go a bit further into the potentially lucrative world of foreign real estate investment.

Location

Consider a number of factors when deciding on the best location for your investment.  Think of proximity and ease of access if you are looking to flip your investment in the near future, or if you are wanting to rent it to vacationers.  You can always find renters who don’t mind being a bit further and more private, but they are a smaller market when it comes to short-term vacation rentals.

Costa Rica also has the added benefit of being somewhere that is an absolute pleasure to property owners to visit time and again.  This is not the same experience as having a timeshare in Palm Beach, Florida. Enjoy peace, natural beauty, and fresh rejuvenation every time you visit.

Inspection

Check on what needs to be maintained regularly, renovated (now or in the near future), as well as what the management and administrative tasks are.  Be sure to visit the property before buying. While some buyers actively seek out fixer-upper properties, most home buyers prefer a house that is move-in ready – and they are willing to pay a reasonable premium for that comfort.  A new roof, for example, generally recoups more than 80% of its value when the home is sold. According to the National Association of Realtors, upgraded kitchens and bathrooms are among the most important upgrades cited by homebuyers because they represent a major expense (and headache) if the buyer has to upgrade them.  Whatever your preference, make yourself aware of what the costs for maintenance and repair will be before you budget.

History

The trends of the long-term real estate market in South Pacific Costa Rica have been mainly tied to the economic climate in the United States.  Because the vastly largest group of investors into Costa Rica “luxury” real estate have traditionally been from the United States, when the US housing market went up, so did Costa Rica’s.  The most recent booms in real estate were from 2004 until about 2007, which ended with the US housing market bubble bursting, and then again in 2013, after the 2012 US election year.

2018 has been an exceptional year in real estate in South Pacific Costa Rica.  Many high-end US housing markets are weakening at the moment due to high property taxes, and American real estate investors are looking outside of the country for new real estate opportunities.  Additionally, investment is increasing out of strong housing markets in Canada (like Toronto and Vancouver), and from the bigger European markets, like Germany and Switzerland, and especially in the case of France and the UK, which have been the targets of a multi-million dollar government advertising campaign aimed at promoting Costa Rica tourism to markets that also include Canada and Mexico.

Costa Rica’s popularity as an investment destination is undoubtedly linked to its reputation as a peace-loving country that abolished its national army in 1948, having no major political disturbances in the country since then.  It is safe and open to foreign investment, with investors having the same rights to buying and selling property as Costa Rican nationals. Costa Rica is also leading the world in sustainable tourism initiatives, renewable energy production per capita, and lowering the carbon footprint of the nation.

Exchange Rates

Superior purchasing power is one of the most attractive elements in purchasing real estate abroad.  In the case of Costa Rica’s local currency, the colon is tied to the American dollar, which has been trading fairly consistently over the last few years.  Euro purchasing power continues to increase in Costa Rica, although the Canadian dollar has seen a decline recently. Whatever it is, always check before sending money or making any big purchases as a few days can make a difference when it comes to large sums.  If you are savvy, take some time to calculate upper and lower exchange rates and your budget will be flexible enough to cover all of your expenses.

Taxes

Although not a tax haven, Costa Rica has very low property taxes (0.25%) and no capital gains tax in Costa Rica for foreign investors who are non-residents.  There are no special taxes for foreigners and no laws banning investment from abroad.

Neighborhood Comparisons

Comparable properties, referred to as “comps” in the real estate world, are properties that have sold in the area, which impact a home’s market value.  Real estate agents look at recent sales of homes with similar features to use as a benchmark against a new listing’s potential price. Short sales often complicate things because they tend to sell at lower prices, decreasing the neighborhood’s overall average sales price.

Due to the nature of our emerging market, many current sellers are short selling their older homes as they are ready to return “home” after 5-10 years of living or owning abroad.  This cycle is coming to a close as these old homes are selling quickly at a reduced price, and soon we will only be left with new homes of modern construction for sale at a premium price.

Return on Investment

To make this a true to form investment, Rich Dad Robert Kiyosaki will tell you that you need to use other people's money!  OTP agent, Marcia Oro, also a seasoned international real estate investor, says that she helps her clients manage their money when it comes to a long-term investment plan into Costa Rica.

"Bring your low equity loan from your home country," says Marcia.  "Rent your Costa Rica home while you are waiting to move here and use the rental income to pay for your 3% loan back home and use your investment to pay for itself."  Marcia says that if you try to get a loan in Costa Rica, you will be paying anywhere between 10-15%, sometimes more.

There is also the rare but real opportunity to find a gem in the market place - a property that is priced well below market value and is waiting to be discovered by the right buyer.  These properties typically exist in the $500k+ price range, where the average buyer is not looking for 'fixer upper' opportunity, but a luxury turnkey home.  The savvy investor can find such an opportunity right now in our Hot Listing of the Week.

Get Help

Even though Costa Rica is a great place to invest, don’t be fooled into thinking that the process for purchasing real estate is the same as in your home country.  You will absolutely find a different set of rules, regulations and bureaucratic red tape, but navigating this system can be easy with the right set of professionals.  Our team’s experience in the local real estate market is extensive and we are here to help.

May 11, 2023 in Tips for Buyers, Discover Costa Rica, Life in Costa Rica, Real Estate in Costa Rica

In life, Apple CEO Steve Jobs told us to “think different” in the infamous campaign that shot MacIntosh computers to the forefront of the tech revolution in 1984.  And in his time spent writing three books about Steve Jobs, author Carmine Gallow shared the seven rules for success that he learned from following the mogul.  Here they are, reapplied for those considering making the move to start to “live different” in Costa Rica.

1. Follow your passions.

"Do what you love" is more than a line Steve Jobs delivered in his now famous Stanford commencement speech.  "People say you need to have a lot of passion for what you're doing and it's totally true," Jobs said. "The reason is because it's so hard that if you don't have it, any rational person would give up."

Out of those who have already visited Costa Rica, it is likely that many have experienced the passion evoked by the natural surroundings and pura vida lifestyle.  It is this passion that propels prospective buyers to navigate the foreign real estate market and all of the challenges that this presents. But if you can just make it to our office, we can help alleviate a lot of the stresses that people find about the home buying process in Costa Rica.

2. Find your noble cause.

When trying to woo a PepsiCo CEO to join Apple in 1983, Jobs asked "Do you want to sell sugar water for the rest of your life or do you want to come with me and change the world?" They took the job.

Once upon a time, people used to move to first world countries like the USA and Canada to seek out new opportunities.  Today, many people are turning to places like Costa Rica where living is less expensive, the climate is idyllic, the people are friendly, welcoming and non-judgmental, and the politics are geared towards sustainability and social equality.  Costa Rica is a destination for people who don't just look for business models; they look for noble causes and ways to give back to their local community.  It's easy to be inspired by those around you in a place as diverse in caring causes as the Costa Ballena.

3. Simplify everything.

"Simplicity is the ultimate sophistication," Jobs once said. He strived to build simplicity into everything, from design to strategy, focusing on only the “gem” products.

You have only so much energy and attention to give, and Costa Rica provides a back-to-nature-and-community platform from which to simplify everything and focus on the gems.  And the gems that are clear here are nature, family, friends, taking in the moment, clean food, clean energy, clean air, clean water, peace and tranquility.

4. Unleash your creativity.

Jobs once said the secret to creativity "comes down to trying to expose yourself to the best things that humans have done and then try to bring those things in to what you're doing."

Creativity happens when we expose ourselves to ideas outside of our field.  Those who come to Costa Rica learn quickly that this is not a country like the one they came from.  People here take their time. They are often late; they decide on if they will do something based on the weather that morning, or if they have nothing more important to do that day.  And rather than get frustrated, the expats who are successful in their Costa Rica endeavors learn from this culture that stress is unnecessary and often counter-productive; that family and safety take precedence over money or deadlines; and that “mañana” truly is another day.

5. Create "insanely great" customer experiences.

The key to the Apple Store success is its people. Apple hires for personality because they can teach anyone to sell an iPad; they can't teach friendliness.

The lesson here is to hire people who are passionate for the brand, and who have pleasant personalities and good culture.  So how does this apply to Costa Rica? Well, I’ll tell you that it applies in our office, and in a lot of what we see in our Costa Ballena communities.  Costa Rica wants only the best people here. We want our neighbors to be kind and caring and to look after their piece of Costa Rica with the same intentions as the rest of the nation, which are to conserve the environment and to welcome guests with warmth and respect.

6. Become the storyteller-in-chief.

Through the expert use of storytelling, Steve Jobs painted a picture of a villain, a struggle and a hero.

Costa Rica wants to tell you a story.  It is not a product to buy but a lifestyle to own by living it.  People come here to make their dreams of living a healthier, more physically connected life a reality.  From the moment you wake to the songs of the morning birds and howler monkeys, and the bright warm sun on your face as you step outside your door, your whole day will continue to be filled with powerful, emotional experiences from people and places that touch deep into your core.

7. Sell dreams, not products.

In a public presentation in 1997 to launch the iconic "Think Different" ad campaign, Jobs said, "Some people think they [Mac buyers] are crazy, but in that craziness we see genius."

Expat audiences don’t care about the place, the politics,  or the ideals of a destination as much as they care about themselves, their own hopes and their own dreams. The Costa Rica expat’s genius is that they can tell that this is going to be a place that inspires them, that feeds their creativity, and that helps put them in the right place - body, mind and spirit - to bring their dreams to life.

May 11, 2023 in Tips for Buyers, Tips for Sellers, Real Estate in Costa Rica

2018 was the first year that Costa Rica took the top spot in the International Living Global Retirement Index, topping the categories of healthy lifestyle and healthcare while scoring well in the fitting in, governance, entertainment and amenities, and climate categories.  People come from all over to get away from the daily drama of other parts of the world.  And as one of the most prosperous and politically stable nations in Latin America, Costa Rica is increasingly becoming known as a beacon of dependability, or “a country that has its act together,” according to International Living Magazine.

Recent history indicates a stable and steady economy, currently focused on growing their tech and service industries, and with a popularly elected government bent on promoting green industry and growing ecotourism.  For those who have studied the history of Costa Rica, it is easy to reach the conclusion that the country perceives itself as an island, ‘a country without problems, that must stay isolated from the insanity of the world’.  It has certainly stood out from its neighbors’ troubled history, priding itself on being one of the continent’s most stable democracies. This distinction has earned Costa Rica the nickname of ‘The Switzerland of Central America.’

Expats in Costa Rica often remark that this is a nation of gentle and welcoming people; the politics are low-key, and people are generally left alone to go about their business.  And it is for reasons like this that an increasing number of expats of all ages are coming to Costa Rica every year.   Sometimes it takes years of ruminating on the idea of expatriation, and prospective buyers want to see that Costa Rica’s reputation for being a safe, friendly, and clean country is only growing—year after year.  

It surely is not a perfect system and neither locals nor expats would claim that it is.  Some might even call it expensive when compared to neighboring nations; but compared to living in Canada, the US, or Europe, the monthly cost to live in Costa Rica is far less.  A retired couple could live very comfortably on $2,500 a month, or even less—all included.  For those who want to escape northern winters to a slower-paced lifestyle that includes good healthcare, a tropical climate that feels great on the skin and is good for the body, and a place where you can exercise outdoors every day, Costa Rica is a dream come true.  Here, people can and do live with a sense of adventure and are able to stretch their dollars in a climate that is warm, safe, and welcoming.

Tens of thousands of U.S., Canadian, and increasingly European expats already live in Costa Rica full- or part-time. And millions have traveled here over the years for beach-resort vacations, surfing, fishing, rainforest treks, and more. With many Costa Ricans speaking English, it's pretty easy for visitors to navigate while learning more Spanish from helpful people in every day scenarios.

The Local Economy

Costa Rica is known for its cutting-edge character and for being a pioneer in the construction of sustainable development, as suggested by the Secretary General of the United Nations, Antonio Guterres. Costa Rica’s new president si, 38-year-old former journalist Carlos Alvarado, recently announced a plan to make his country the first carbon-neutral nation in the world by 2021, the 200th anniversary of its independence.  The tiny Central American country is signaling it wants to beat larger, wealthier countries to environmental glory by using incentives for decarbonization.

Costa Rica is also continuing to forge partnerships with larger economies around the world.  In the first semester of 2018, sales of goods abroad totaled US$5.718 billion, registering an increase of 6% with respect to the same period in 2017.  The UAE is one such market that is increasingly looking to work together with Costa Rica on mutual interests such as increasing tourism and renewable energy.  Costa Rica is already a large importer of UAE aluminium, dates and dried fruits, while the Emirates imports furniture, electronic cables, medical devices and pineapples. Its bananas and coffee will soon be introduced to the UAE market.  Costa Rica recently opened its first UAE embassy and since then trade between the two countries has increased by 15 per cent. Costa Rica hopes to attract more medical tourists, especially for cheaper plastic surgery, dental care, eye surgery and rehabilitation in a place where nature sets recovering patients in a healing mental mindset.

Multinational companies like Align Technology are committed to investment in Costa Rica because of the combination of highly specialized local talent, location, and business conditions that enable companies to expand local operations.  They view Costa Rica as an economy with optimal conditions for leading companies to invest, add value to their productive processes and strengthen their competitive position in international markets, according to Costa Rica Foreign Trade Minister, Dyalá Jiménez.

Growth in Real Estate

The last 10 months have shown an increase in private construction and growth in the economy.  The Central Bank of Costa Rica (BCCR) has recently reported that construction activity had a variation of 13.3% in May, compared to the same month of 2017. 

Coincidentally, our office is registering far more new buyers in 2018 than in recent years past.  After the 2016 election cycle in the US, Costa Rica was anticipating a huge rise in expats in 2017.  We have since learned that no matter the motivation, it takes our clients many months and often years to process the idea and plan for a big investment and bigger move to another country.  But we are increasingly convinced that the federal marketing plan of Costa Rica abroad, and our own office's consistently exceptional service standards and reputation, are bringing more clients to our neck of the woods and into our office in the Southern Zone of Costa Rica, in one of the most biologically intensive wildlife corridors in the world, and with one of the most relaxed, friendly and fun international communities in the country.

New listings that are priced to our recommendation and that show well (are clean, well-maintained, and available to show on short notice) are quick to sell, generally staying on the market for an average of 3 months and selling within 5% of the asking price (sometimes more, sometimes less).

With the continued growth of the economy, political stability, and national passion for sustainability of all that makes Costa Rica so popular, we are convinced that heading into the high season towards the end of the year, the real estate market in South Pacific Costa Rica will continue to grow over recent years.

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

 A second home in a tropical country is about leisure time.  It needs to have the amenities that the buyer wants, and be an oasis where they can have peace and get away from everything.

Forbes Magazine has been recently touting Southern U.S. destinations as good investments, particularly in Texas and Florida.  But thanks to the increase in tourism to Costa Rica, largely due to a government-run campaign to advertise Costa Rica to North America, Europe and Mexico, potential U.S. investors are finding their way further down south and falling in love with the change of pace in the land of pura vida.

Why do people choose to visit the Southern Zone?

According to InternationalLiving.com's 2018 Global Retirement Index, Costa Rica has taken the top spot for the first time in the index's history, topping the categories of healthy lifestyle and healthcare while scoring well in the fitting in, governance, entertainment and amenities, and climate categories, all of which are abundantly praised by the expat communities in our region.

The Southern Zone of Costa Rica is located on the South Pacific coast and has a diverse range of climates and amenities.  Many of those who move to the Costa Ballena - where the mountains meet the sea - are looking for a quiet area with a warm but breezy climate.

Younger buyers are drawn to this region for the many different options for schools in English and Spanish. And yet another priority that brings people to this region is the ability to buy land big enough to have privacy, room to garden, and to keep animals, both domestic and for farming, on rich, fertile land.  All of this can be found for a much lower price than in other more touristically developed regions of the country, as well as other comparable tropical destinations.

More than a few new buyers to this region operate their own foreign businesses, such as IT consulting in the U.S., meaning that they are able to work from anywhere and are choosing Costa Rica to raise their families in a simpler, more natural environment.  The internet service in the Southern Zone is fast catching up to world-wide standards, and you can get 6 mbps even in rural areas.

Our region is big enough to find pretty much whatever you need but small enough that you don’t feel overwhelmed by your daily routines. Many people who move to Costa Rica say that they mostly enjoy the human element of living in this here. It's pretty much all small shops and when you go in, they really treat you like they are happy to have you there.

There's state-of-the-art healthcare at about one third the cost of the U.S. and the cost of living reflects that reduction in expenses, too. Costa Rica is laidback and slower-paced and there's none of the drama that's coming out of the United States right now.

The increase in tourism is affecting the local real estate market

US buyers are driving up property demand in Costa Rica, with an increasing number of buyers from Canada, France, Germany, and Belgium according to Rodolfo Herrera, a real estate lawyer based in San Isidro, San Jose.  “They come here to vacation, fall in love and want to buy,” he says.

Higher median prices in the U.S. markets are now driving buyer interest in higher priced and luxury real estate properties, particularly for ocean view, beachfront, and near beach properties.  Buyers from hot markets in the U.S. like California and Florida see Costa Rica as offering great value in comparison to similar beach real estate in the United States. We still have luxury condos for under $200 per square foot, pricing that is rare in the USA.

Aside from its scenic beauty and lower cost of living, many Costa Ricans, foreign investors and High Net Worth Individuals (HNWIs) are increasingly attracted to this country mainly because foreigners are entitled to the same ownership rights as Costa Rican citizens, and there are low property taxes and no residency restrictions.

The principles of supply and demand dictate that when there are more options available, people can be choosier and know that even if they lose out on what seems like the perfect property, something else will likely come along that ticks off all the boxes. In our market, looking back to more than two years ago, buyers were more emotional then than they are now, and were a bit more selective.  These days, we are seeing more tourists (and potential buyers) reaching our slightly more distant destination (than others within Costa Rica) and buying up the inventory in the under $400k ocean view homes.

Guanacaste, which was once the most sought after destination in Costa Rica, has seen the biggest decline in residential property prices since 2017, with prices of both houses and condominium units in the province plunging by about 30% y-o-y in November 2017, according to the online marketplace Encuentra24.

Today, the most expensive and fastest-selling properties in Costa Rica are in the Central Valley, the greater metropolitan area where most businesses are, and in the North Pacific coast. The least expensive properties can be found in new developments in the Costa Rica’s southern region, such as the Osa Peninsula.

• In Ojochal (Southern Zone), a similar property might cost around US$265,000.
• In Tamarindo (North Pacific), 3-bedroom houses are priced at US$375,ooo.

Tourism has a huge impact on the real estate and rental market

The first half of 2018 shows a growth of 6% in tourists from this country to Costa Rica, according to the National Tourism Board (ICT).  This increase is also present in visitors from other regions such as Europe (14.2% increase on 2017) and South America with an 11.4% growth.  At the start of this year, ICT had already confirmed an additional 95 thousand plane seats, thanks to the arrival of new airlines and the increase in flight frequencies.

Costa Rica is the most visited country in Central America, capturing more than a quarter market share. Americans account for about 40% of all visitor arrivals in the country every year. It is estimated that about 100,000 American citizens live in Costa Rica and more than 1 million visit the country every year.

As a direct result of this increase in tourism, Costa Rica’s economy is expected to expand by 3.8% this year, according to the International Monetary Fund.  Gross rental yields on residential property in Costa Rica remain generally healthy, at around 5.6% to 8.6% at end-2016, based on the most recent Global Property Guide research.  These are quite good returns, even when costs such as taxes and other costs are subtracted from the gross figures.

May 11, 2023 in Selling Process, Real Estate in Costa Rica

It may come as a surprise, but there is no multiple listing service (MLS) for real estate in Costa Rica.  Many have tried to duplicate the systems found in North America and Europe, but in a country so small yet divided by vast spaces, it is difficult to gather data and people are not always willing to share openly.  As a result, each broker in Costa Rica real estate pays to host their own “MLS” of sorts - a website with a hand-selected list of properties in the region that their office services.  In addition to listings held by their own office, most brokers go beyond and list properties listed by other local brokers, so that their sites offer the best of what is currently available on the market - essentially MLS.

Our team of agents at Osa Tropical Properties meets weekly to review all properties listed in our region.  We share information about any new listings that we’ve taken and we discuss new listings brought to our market by other brokers.

Our office serves the sparsely populated region between Dominical and Palmar (locally known as the Costa Ballena), which has a population of approximately 20,000 and around 5,000 homes.  These are fairly rough estimates, since official statistics don’t exist for this region, and this estimate includes expat and Tico homes.

Some brokers and individual agents choose to quote their clients a high valuation on their property in order to secure them as exclusive clients.  Our team refuses to take this route to get listings. Instead, we focus on constantly advising our clients on the activity in the market and making recommendations like adjusting price, changing unpopular characteristics about a home, or clearing a lot in order to sell properties for our clients within a designated time frame.  We are not always successful, but the majority of the time that our clients take our advice, we sell within the desired amount of time.

We understand that our recommendations may be unpopular with some, especially when compared to another agent who says that they will list a property for many thousands of dollars than we will.  We prefer to focus our energy on selling the homes that we know are fairly and competitively priced, that, as compared to all other inventory available on the market. We preview homes weekly with agents from all over our region and we know the comparables for any property that you want to buy or sell in the Costa Ballena.

Homes over $500,000 are still experiencing a buyer’s marketplace in real estate, largely due to the high-turnover of clients going from buyers to sellers in our region, by the very nature of being a region popular with expats.  There are a number of reasons why expats come and why they go, and the latter often has to do with the dynamics of the family changing: new grandkids, new relationships, and many other changes that are very personal in nature and have little to do with the joy that they have experienced in living here.  Savvy buyers know that there are good property options regularly coming available that are priced well and ready to sell, and they are far more likely to make an offer on one of these.

Market trends for 2018

In this first half of 2018, we have seen an increase in the number of buyers coming through our office over the same period in 2017 - our biggest year since our region’s last real estate boom in 2011.  Below, you will find a few basic statistic and explanations from our team as to how we have come to understand this year’s trends for real estate in Costa Rica.

The table below shows average and total prices for sold listings in our region in 2018.  Because there is no regional MLS network, these statistics are based on our reciprocal relationships with other agencies and our commitment to informing one another about the status of our listings.  Each office does not operate in such equanimity, but we have enough data to get a good idea about regional statistics related to real estate sales within the expat community.

Osa Tropical Properties collected statistics for 2018 (Based on OTP MLS and information from other agencies).

House prices are slightly down on last year’s average of ~$455,000, although the total value of solds for our region is already nearly double on last year, as recorded by our office to be around $35,000,000 in 2017 - and we’re only half way through the year!  As a real estate agency in operation in the Costa Ballena since 2005, our office has noticed a significant drop in sales every four years due to the uncertainties surrounding a US election year because Americans make up the vast majority of expats in Costa Rica.

If you are curious about what a property is worth in today’s marketplace, there are a number of characteristics that determine the valuation of a home based on the current home buyers in our region of Costa Rica. Click on the link below to send us an email with a description of your property and we will follow up with you to ask additional questions about your home to give you the best estimate based on our expert understanding of today’s South Pacific Costa Rica real estate market.

May 11, 2023 in Tips for Buyers, Real Estate in Costa Rica

Costa Rica has been awarded once again, this time by tourism specialist Conde Nast Traveler Spain magazine naming Costa Rica the international tourist destination of 2018.  Voted by readers and followers of the site from among 25 destinations, Costa Rica was recognized for being a destination that is rich in biodiversity and tourist attractions, in addition to its solid reputation for sustainable tourism and constant innovation.

This award is being received as a validation of strategies employed by Costa Rica’s tourism ministry’s work of successfully promoting the nation to the European market, including a growth in direct flights from a variety of European ports.

Our office has seen a share of this growth from Europeans wanting to go beyond travel and make their stay in Costa Rica more permanent.  And because Europeans tend to be adventurous travelers, many of them find themselves in our more rugged and naturally abundant region of Costa Ballena in the Southern Zone of Costa Rica.

But how much will it cost me?

There is much heated debate to be found online about the cost of living in Costa Rica, since this is widely known to be one of the most expensive nations to live in Latin America.  But when you consider what it is you are paying a slightly higher price for: a peaceful and stable political system, far lower rates of poverty and crime, successive progressive governments working towards aspirational environmental goals, and excellent universal medical care.

Most people know that medical and dental services are less expensive in private clinics in Costa Rica than in most first world countries, with leading technologies and specialists available all over this developing nation.  Real estate is also less expensive than most other comparable locations in North America or Europe, and Costa Rican property investors enjoy very low property taxes (0.25% of your property's valuation annually) and no capital gains taxes.

On the other hand, commodities such as clothes, cars and electronics face a considerable markup and red-light specials on isle 4 are not a common occurrence in Costa Rica.  This means that pre-packaged foods - less purchased by local consumers - tend to be much more expensive than in America, where you can buy 3-4 bags of Doritos on special for the same price as one bag in Costa Rica.  Your own, personal lifestyle will have the biggest influence in how much you spend on a monthly basis, which can range from $1000 on the lower end to $3000 on the higher end for all expenses, including rent.

Luckily, for those who can’t really live without, Amazon recently announced that it will allow clients in Costa Rica to receive their packages directly, rather than first receiving them at a U.S. shipping address and forwarding them to Costa Rica.  Products are also available for purchase through Amazon using the Costa Rican currency, the colon.  Various other shipping services exist, including DHL, FedEx and various small, local providers, and the speed and efficiency of Costa Rica's postal service is growing every year.

Price comparisons

According to the online aggregate database Numeo, the cost of living in Costa Rica is 23.08% less than in the United States on average, not including rent, which is $55.24 lower on average than in the United States.  Using the example of the most expensive city in the US, you would need about $7500 USD to live the same lifestyle that you can for $1000 USD in San Jose, assuming you rent in both cities.

Since 2010, Costa Rica has enjoyed strong and stable economic growth, seeing a 4.3% rise in 2016 alone.  It has also attracted one of the highest levels of foreign direct investment per capita in Latin America.  According to Forbes magazine, foreign investors remain attracted by the country’s political stability and relatively high education levels, and incentives offered in the free-trade zones.  And so, even while goods are generally more expensive in Costa Rica, there are many places around the country in which appliances, imported foods, and alcohol (among other things) can be purchased duty-free, thanks to government incentives.

The Costa Rican economy

Still relying heavily on the export of bananas, coffee, sugar and beef, the Costa Rican economy is moving past commodities and adding the export of high value-added goods like medical devices.  And more impressively, the government-mandated push towards ecological protection and sustainable practices have made Costa Rica a key destination for ecotourism from around the world.

The Great Place to Work Institute of Central America and the Caribbean has found that 40 of the 154 best businesses to work in their region of analysis are in Costa Rica.  Two Costa Rican businesses have also been recognized in TripAdvisor’s second annual Traveler’s Choice awards for Rentals in the luxury category.

According to a recent TripAdvisor survey of their customers, 64% of Americans traveling in 2018 plan to stay in a vacation rental.  Savvy investors into Costa Rica are already looking at how to make their local property investments work for them while they are away, renting them through popular sites like VRBO and AirBnB.  Owning a vacation rental on your Costa Rica property is another great way of funding your stay, too, since it is legal to own a business as a foreigner in Costa Rica, with the same rights as nationals.

Use the contact us form below to get in touch with an agent from our team.  We will help you answer all of your questions about investing in Costa Rica and if it is a viable plan for you economically.  Our agents have expert knowledge, having helped hundreds of successful buyers who have remained friends and clients over the years.  Our goal is to help you succeed in this great country, and not to make a quick dollar by tricking people into buying. It’s easy to fall in love with Costa Rica’s beauty and ethics, but it’s important that it’s right for you - for the good of our community, too.

May 11, 2023 in Discover Costa Ballena, Tips for Buyers, Real Estate in Costa Rica, Life in Costa Rica

Staying at hotels is not for everyone and in South Pacific Costa Rica, visitors tend to be of the variety who prefer a more unique and embedded experience. The number of big hotels in this region is reflective of that preference (there are zero branded hotels in the Costa Ballena). 

Visitors come to the Costa Ballena wanting something with less structure and more integration with nature; something a bit more personal. They are seeking a homey environment from which to enjoy the peace and tranquility of life on Costa Rica's Pacific Coast.

The idea of moving to Costa Rica has traditionally appealed to retired investors, although more part-time residents of all ages are arriving every year.  These are people who visit for 3-6 months at a time, seeking a simpler lifestyle for part of the year.  They are drawn to the reputation of this country being one of the longest and most stable democratic governments in Latin America, where foreign investment is easy, both large and small, for private and commercial interests.

Creative expats can combine their desire to move to a land full of natural beauty with the opportunity for starting a new business.  Moving to Costa Rica before retirement age can simply be a matter of opening a small business on your property as a rental destination - an easy and fun way to make your real estate investment work for you.

Long term rental properties can generate an annual yield of 5-7% of the purchase price.  Short term vacation rentals yield a slightly higher annual return of 8-12%.

How to make the dream work before retirement

Some people spend half the year in their home country like Canada, the US, or in Europe, running an accommodation in the summer months in those countries, and the other half operating in Costa Rica’s high season (December-April). 

This is not a country for ‘Type A’ personalities, but if you go slowly, in the pace of the place, you can go far.  Many deals can be found on properties for sale by absentee owners, who want or need to use the income they’ve tied up in Costa Rica real estate elsewhere, so keep an ear to the ground and an open mind. 

There are key elements that make the difference between a successful rental, and a property that will only provide headaches.  Buying in a popular vacation destination with the right balance of a constant flow of people and the nature and seclusion that makes Costa Rica special will make all the difference - to you and your guests.  Consider your own enjoyment of the property first and then market to the people like yourself who will enjoy the great escape in Costa Rica that you have cultivated.

Choosing your target market

If you are interested in high-turnover rentals, you want your facilities to be of a certain standard, close to amenities, and close to attractions (nature, beaches, adventure). 

Small vacation rentals allow for families to have a more intimate time, with the ability to bring pets and have your kids/grandkids run and splash about in the pool.  Couples who want more privacy prefer to rent a small home and property to ditch the encumbrance of clothing.  Whatever the reason, vacation rentals are a convenient alternative for travelers and a mode of expression of taste and hospitality for the international array of proprietors.

Many tourists opt for the vacation rental for the savings.  Rentals generally provide guests with more space for less money.  Especially for those who are staying for an extended holiday, hotels can get pricey very quickly, whereas rental homes will often give a better rate for those staying for a longer time.  These visitors also have the benefit of a full kitchen and a laundry room, giving them more freedom to live at their own pace.

Living in a vacation home gives a renter the opportunity to see what life feels like for a local while they thinking about if they want to make their stay more permanent and buy their own home.  And in our experience as real estate agents in Costa Ballena, we know that the majority of our buyers are long-time visitors to this region who have fallen in love with the lifestyle and are ready to make a more permanent stay.

If you are currently operating a vacation rental in the Costa Ballena, we’d love to hear from you.  We offer a great referral program to business owners who refer buyers to our office.  Send us an email or give us a call to discuss how your business can work even more effectively for you.

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.

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

Thanks to the growing popularity of our region of expertise in Costa Rica real estate called the Costa Ballena (which includes the townships of Dominical, Uvita, Ojochal, and Tres Rios), buyers have been flooding the market this high season.  Our team at Osa Tropical Properties have nearly sold out of ocean view listings in the <$400,000 price range.

There are a growing number of buyers coming into our region, ready to spend more than $400k on a great property, however this gap in the lower price bracket of ocean view homes has created a vacuum that can be easily filled by gathering new listings of off-market properties whose owners have been thinking about selling; or by savvy investors willing to purchase some of the great ocean view lots available in our region, and building a home to be sold upon completion. 

Our team thoroughly understands the local real estate market, thanks to weekly in-depth analyses of market trends, new listings, and sales records in our region of operation.  We are more than happy to share our analyses on a per-client basis, offering investment advice based on years of experience.  We know what to buy or build and where to do so for your best return on investment.

We see that our real estate market is trending upwards, thanks to recent campaigns by the Costa Rican government (ICT) in partnership with CNN, as well as the growing reputation of Costa Rica as an ideal location for investment by foreigners - especially those who value a greener lifestyle.  Costa Rica is home to almost 5% of the world’s biodiversity, 2.5% of which exists in the Osa Peninsula alone.  The Costa Ballena is known as ‘The Gateway to the Osa Peninsula’ and it is the region of Costa Rica that has the most nature and adventure activities, existing alongside flourishing expat communities that are well integrated with the local Costa Rican population.

About Osa Tropical Properties

It has recently come to our attention that there are many newcomers to our region who do not know about our company origins, or even what our name means.  This region of Costa Rica is in the Osa Canton, which is the fifth canton in the province of Puntarenas.  This region has a population of nearly 30,000 inhabitants and extends from the Río Barú near Dominical in a thin stretch along the coast to Palmar, Sierpe and the top of the Osa Peninsula.  As its name suggests, this is the region where humpback whales and dolphins migrate to calve, mate and rest for 8 months out of the year.

Osa Tropical Properties is a family-run business that began in 2005, a few years after current owner Kevin Champagne’s father, Remy Champagne, moved to the Osa region and found a niche in the burgeoning real estate market.  This was a time when a small but growing number of foreign investors began finding this region, looking for virgin tropical land for development.  Remy began brokering deals on behalf of local landowners out of his ceviche shop at the entrance to Piñuelas Beach.  

Kevin purchased the company from his father in 2011, and the team has been growing steadily since.  Osa Tropical Properties has one of the leading team of realtors in our region, which is populated by branded real estate companies.  Even still, our small team is dedicated to our client success, evidenced by our incredible reputation thanks to our client testimonials.  We lead this region annually in the number of happy, successful clients, and it is our pleasure to continue to offer great services to the real estate needs of the Osa region.

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

Foreign investment in Costa Rica is increasing for four main economic reasons:

No capital gains tax - any income you make on your Costa Rica investment is not taxed when you sell and move your money over the border

Low property taxes - annual taxes are only 0.25% of your property’s current valuation

No selling stipulations - as easily as foreigners can buy in Costa Rica, they can sell under the same terms as a Costa Rican national

Low property value fluctuations - Costa Rica is a stable economy, and property prices have remained consistent in the last decade

Savvy advice for investing in Costa Rica

For our American clients, you can use your IRA

An Individual Retirement Account can be used for offshore investments with limitations on how you can and cannot use the investment.  You many need to transfer to a self-directed IRA that allows for real estate investments.

The same restrictions apply in Costa Rica as in the US, meaning that the property must be used for investment purposes only - as a rental unit or for speculative purposes.  You may take over the property when you retire.

Investing wisely

If you are choosing a property to purchase for your eventual retirement, it is advised that you consider a home in an area already showing a good ROI in case you decide to sell for any reason.  An area or development with good property management services are also recommended.

Rentals

Those with a keen business sense will use their property for their personal enjoyment during the rainy season, which is slower with rentals.  They will rent their property during the high season or peak rental time, thus receiving great ROI in two ways: income and personal enjoyment.

Buying in a popular vacation area is important if you are going to be dependent on rental income.  Costa Rica is a great choice overall, however properties in a secluded beach or mountain area will limit your rental options.  Choosing an area within reasonably close proximity to tourist activities will increase your chances at for a high yield ROI.  The Southern Zone has something for every kind of tourist, making it easy to cater your investment to the enjoyment of others.

Think comfort, security, location, convenience and price.  Owning within a residential community will have these advantages, with less need to be dependent on a concierge service.  

Common costs associated with rental properties

• Property management fees  
• Annual maintenance costs
• Home insurance
• Property tax
• Corporation tax
• Luxury home tax
• Home Owner’s Association fees (for condominiums and gated communities)

Speculations

The current economic climate in Costa Rica has created favorable conditions for homes to be built for the purpose of sale.  Raw land prices are lower than average and at near recession levels, yet the primary demand is for finished homes.  Adding together these two factors amounts to a good investment strategy.  

The best way to capitalize on this equation is to design your spec home project for the market.  Your objective should be to build something irresistible.  Three of the most promising trends for the region are:

1. 3-bedroom family homes
2. Vacation rentals
3. Eco-homes

Final thoughts on your investment

Before falling in love with an idea on paper, ask yourself these obvious but nonetheless important questions:

• Does the ocean view contribute to the quality of life on the property?  A great view is not enough of a redeeming quality if the living space is lacking.
• Is the access four-wheel drive?  If you are primarily renting your property, easy access and proximity to the highway is valued.
• Are the water features on your property year round?  Buying a place with a waterfall on the property or nearby is great only if this feature is present during the height of the dry season.
• How is the air motion on the property?  Taking advantage of breezes is crucial to mitigating high temperatures.
• What is the distance to the nearest neighbor?  Privacy is valued in the Southern Zone, which is characteristic of pristine nature and ability to spot wildlife

By Alex Swift

May 11, 2023 in Selling Process, Tips for Sellers, Real Estate in Costa Rica

If you’ve been sitting on your Costa Rica investment, waiting for the perfect time to list it – wait no longer.  The low inventory in the housing market in south pacific Costa Rica is making sales more competitive now.  Match that with the coming of the high season and we have ourselves a tide of hungry buyers, each ready to stake their Costa Rica claim.

The high-season in southern Costa Rica stretches from December to April, coinciding with the driest months of the year.  It’s called the high season because it is the most popular time for tourists and snowbirds to make their way to the land of pura vida.  And before this perfect storm hits is the best time to get in touch with an agent to position your listing at the top of the heap for incoming buyers. 

Dry season means optimal weather to get on top of those renovations or new additions that your agent will suggest based on their knowledge of the market, and it’s the usual time that we stage our outdoor areas for the most comfortable enjoyment of the surrounding nature and incredible views. And with the influx of tourists and potential buyers that come in these high-season months, agents are hot to show them the places ready for immediate enjoyment by our excited Costa Rica hopefuls. 

Because the high-season is so competitive for sellers and brokers alike, when we list your home before the high-season, we give it an extra marketing push for the purpose of reaching potential buyers overseas; to capture their imaginations before they even arrive, especially if they are still deciding on which locations in Costa Rica they want to visit. And if they’ve been here before, they have likely already fallen in love with our Costa Ballena communities and we want to remind them of what they are missing as the season heats up.

Around the world, it is true that most people shop for homes when the weather is nice.  And although the weather is wonderful year round in the Costa Ballena, the majority of buyers still tend to classify as snowbirds, who will be arriving in the coming months.  They are not overly concerned with what the weather is like in the greener, wetter months, but they do want to get in early before the holiday season begins and the influx of tourists begin to arrive, thus increasing their chances of entering into a competitive buyers’ market.

For the buyers who live here full-time, renting or owning; who are ready to make a change, this is the time of year that they are often pushed to make a decision after weeks or even months of frustrated searching throughout the wetter months, when there tends to be less available on the market.

 When we list your home early in the high-season, or right before it begins, your listing is fresh in time to impress the majority of buyers.  Early listing gives us, your agents, time to find the right buyers before the new 2017/18 homes are finished construction and put on the market.  Because the driest months of the year are on the horizon, so are the majority of new housing contracts that cannot proceed when most days are even partially wet.  Local statistics show that new homes sell faster in this region, and in larger quantity, mainly due to the fact that many come to Costa Rica as tourists and fall in love with this land and culture, wanting to take home more than mere souvenirs, and the easiest purchase is one that is straight-out-of-the-box new.

When it comes to the dedicated investor who has come to Costa Rica with the desire to buy, we know that they are serious when they’ve contacted an agent or broker in this region and are ready with cash in hand.  That time is fast approaching, with increasing evidence that is has already begun, and we want to show your home to these buyers before they spend their money on holiday travel and tourism, thus prolonging the buyer’s enjoyment of Costa Rica, and also satisfying our sellers’ need to make a change.

 By Alex Swift

May 11, 2023 in Real Estate in Costa Rica

July 2017 South Pacific Real Estate Report

This is a broad question to answer for all of Costa Rica but for those who want to understand when, where and how to invest their money it’s as good a place as any.

Generally speaking, the economic climate in Costa Rica is positive for investment.  There are a growing number of corporations moving into the country each year, reflecting a faith in the stability of the Costa Rican Colon, which has been seeing a steady positive trade against the dollar in recent years making this economy ripe for American and Euro investment.

The nation as a whole has a steady economy based in tourism and agriculture, reporting annual growth in visitors and investors.  The democratically-elected governments aim to maintain low inflation and interest rates, as well as low sales taxes and property taxes to entice foreign investment.

The paths to residency are easy for investors, and the nation is often being voted at or near the top of expat satisfaction indices.  And a little known fact with growing significance is that Costa Rica is one of few nations in the world with a ‘zero terrorism’ rating, showing low levels of internal conflict and strong political stability, with no military and very few weapons coming in or out of the country.

This is one of the safest and most beautiful countries in the whole world.  But how does all of this reflect on the housing market for international buyers?

Both buyers and sellers contact our offices with questions about the market.  They want to know if it is in fact saturated with sellers and if real estate prices are dropping.  They want an unbiased opinion but don’t know where to turn outside of realtors, who are well-informed but inevitably invested in the answers they provide.  Fortunately for us, we are the real estate experts in our market and we know what is for sale, what it is worth, and what terms will help make the sale, and we gladly answer these questions for our clients daily.

So, for those looking for the answer to the question of the market, when it comes to our office’s region of Costa Rica, the south pacific’s Costa Ballena, our team’s educated opinion is that it is a good time to invest in 2017

Costa Rica on the world investment map

Everyone wants to live in Costa Rica these days.  They may only have it as a dream in the back of their minds, but more and more every day, we get questions from broader groups of people about if and how they can make the move. Whether for a different chapter in their lives, early retirement, or safe investment and an occasional getaway, we field more questions each month from people who have heard about our regions many wonders and want to know more.

The conditions in the Costa Ballena are good for investment and better for life, and the more that people learn about this growing region, the more we get coming through our office and putting ‘sold’ signs on their new yard.  This includes members of our own team, who are also currently investing more into this region because we believe what we are telling our clients: that this is the best kept secret in all of Costa Rican real estate.

A home for visionaries

On the whole, the reputation of Costa Rica is growing on the world scene thanks to the country’s revolutionary eco-policies and safe political and social environments for visiting and investing.  With it, the Costa Ballena is growing in exposure as one of the last bastions of expat investment.

The housing market in the Costa Ballena tri-town region of Ojochal, Uvita and Dominical has historically always been running at a surplus, mainly because this region has been in the development phase.  However, these days ocean view lots are scarcer to find under the $100k price point and houses with beautiful ocean views under $400k are virtually off the market.

In saying that, people have all kinds of reasons for selling and many of them are not for lack of love in where they are at the moment.  Family needs arise, as do those of career or simply a longing to go on the next great adventure.  In any case, in our expat-rich Costa Ballena communities, we have always seen a cycle of people coming in and going out and we are here to support them in making the transition back and helping create an easy environment for buyers to quickly take over their property.  We do this through expert contract negotiations, caring about the details on both ends of the spectrum.

These types of sellers are typically offering the best deals and conditions for sale but they are only a small percentage of the sellers in the region.

For the most coveted properties with the most sought-after features, owners will often list with opportunity in mind, hoping to see what kind of offer may arrive at their doorstep.  These are the sellers who will accept cash offers, often using the proceeds from the sale to reinvest in the area.  Offers to these clients are always good and there are deals to be had for those who can bend to fit the seller’s terms.

When servicing our beloved Costa Ballena region, we take our clients from sold to settled and back again, helping every step of the way with genuine care and consideration.  Call in to our offices to speak to our knowledgeable agents who will find you the right property to suit your investment needs.  There is still something special here for almost everyone and it is our pleasure to be our your introduction into our vibrant expat communities.

 By Alex Swift

May 11, 2023 in Tips for Sellers, Tips for Buyers, Real Estate in Costa Rica

Most expats who come to Costa Rica choose to use corporations to protect their assets from liability.  These expats set up something called ‘inactive corporations,’ meaning that they do not generate any revenue or pay income or sales taxes, but they do hold assets like vehicles and properties to keep them as legally separate entities in case of legal action against the owner.  This is not mandatory in Costa Rica, but it is advised as a precautionary measure.

On the 22nd of March of this year, Corporate Tax Law #9428 was approved, requiring all active and inactive corporations to pay annual taxes.  It is a successor to Corporate Tax Law #9028 of 2011, which was declared unconstitutional in January of 2015.

The new tax is set to be implemented on the 1st of September for 2017 and will be prorated for this year. Banco de Cost Rica will begin collections in July.

The tax is calculated to be between 15-30% of the current base salary of a government employee, which at present is said to be 426,200 colones.  Annual payments will therefore start at $115 USD at the bottom of the scale (see below for chart with tax brackets).  Inactive corporations (the majority of corporations held by expats for assets such as properties and vehicles) are likely to pay just the minimum sum.

Business owners in Costa Rica will have something called ‘active corporations’, meaning that they file tax returns on generated income.  Their corporate tax is slated to be slightly higher, although still one of the lowest in the region, including the US and Canada.

Corporation holders can find out if their company is active or not by checking the Ministry of the Treasury website here.

Payments for 2017 will have to be paid in full by the close of 2017 to avoid interest charges.  The 2018 full payment will be due by January 30th and new corporations will be required to pay the tax within 30 days of registry.

Those who want to continue to use their corporation must have up-to-date payments for the three consecutive years of 2012-2015.  If not, their corporations are set to be deactivated by the government.

The new Corporation Tax Law will have the following grace periods:

1.     Corporations owing back taxes are allowed 3 months from the date the law comes into effect for payment, meaning back taxes are owed by December 1st, 2017 to avoid paying late fees or interest.  Past due corporate taxes in Costa Rica constitute a legal preferred mortgage situation in which the government can dissolve the corporation and put a lien on a corporations assets  based on Article 6 of Law 9024.  This is also a provision in the new law 9428, Article 7.
Note: Having a corporation dissolved by the government does not mean absolution to debt for unpaid back taxes.

2.     Corporations that choose to move their assets into another corporation or into a personal name will be exempt of property transfer taxes in year 1.  This can be done without the need to clear the title of debts and/or liens, so long as there is no provision in the contract that states that a transfer cannot occur without the consent of the creditor.  Although the transfer tax will be waived, legal fees for the transfer still apply.

3.     Board members of the corporation can resign with the National Registry and have two years to file their resignation without penalty.  Whereas the old law holds representatives and officers of the corporation personally responsible for the payment of past-due taxes, the new law adds that shareholders are now also liable.

Money from the new Corporate Tax Law will be designated for use in public security (90%), the prison system (5%), and an organized crime task force (5%).

2017 Corporation Taxes Chart

*Calculated based on 550 colones to $1USD exchange rate

 By Alex Swift

*Chart from Pacific Coast Law Costa Rica

May 11, 2023 in Tips for Buyers, Real Estate in Costa Rica

Steady sale rates of luxury homes throughout Costa Rica are indicating that foreign and local buyers are seeking a secure investment and discreet lifestyle in our age of globalization and population boom.  Foreign property buyers want to know that their investment is secure and that it can be used in the interim between retirement for their enjoyment or steady income, and Costa Rica is answering ‘yes.’ 

Adventure in Costa Rica is endless, with deep bush nature trails, white-water rafting, kayaking, zip lines, hand gliding, parasailing, deep sea fishing, and mountain climbing.  These reasons and many more are why Costa Rica is growing every year as a popular destination for vacationers from around the world.

For years, Costa Rica has been the leading tourism destination in Central America and continues to grow exponentially each year.  Consumer confidence is strengthening in recent years, as indicated by the increase in tourist dollars spent on the local, ecologically-driven economy.  Tourism booms mean that investment properties are more likely to rent out in the higher demand and investors can feel safe in the knowledge that the trends are tracking upwards steadily.

Costa Rica has been alluring adventure seekers and eco-travelers since the 1980s when the constitutional government began enacting legal measures to protect the wildlife and the water in this small but impactful nation.  Visitors to the growing South Pacific region of Costa Ballena come to appreciate the natural wonders of untouched wilderness, opting to avoid the heavy footprint of larger populations in the more commercial North Pacific.  Despite the smaller number of visitors, this region of the country has some of the strongest communities for both expats and locals, making life in the South both friendly and functional.

Accolades abound

Forbes’ Travel Guide has recently recognized Costa Rica’s luxury hotels and resorts in its publications and the evolution of Costa Rica as a top destination for luxury travel is only just beginning.  Costa Rica tops many destination lists, like the InterNations Happiness Index, as the most spectacular for one reason or another.  As a result, the steady income generated from tourism and the increasing number of expats has contributed to the expansion and sophistication of the real estate sector throughout the country.

There are three international airports, allowing visitors easy access and expats to remain well-connected to home.  A well-maintained highway connects the Pacific coast with the Central Valley and Costa Ballena is a beautiful 3-hour scenic drive from the capital.  The Costa Rican government has pledged to keep these services in good condition for the benefit of tourism and commerce.

Costa Rica is a politically and economically stable nation.  There are no anti-government rallies, political uprisings or riots and successive governments are democratically elected and supported by the majority of the popular vote.  One of the oldest democracies in the Americas, this is a nation proud of its tradition of negotiation rather than confrontation, as well as social development and tolerance over military spending and hostility.  It is a nation with one of the highest literacy and life expectancy rates, and a people whose happiness is embodied in the national epithet ‘pura vida.’

Tourism is king

The impressive scenic beauty and welcoming spirit are not lost on the more than 2.5 million tourists who visit annually, nor the nearly 9% of its population that are expats.  Due to the country’s small size, the diverse array of natural wonders are within easy access offering visitors the opportunity to see 12 different life zones, 20 national parks (which cover nearly 25% of the country), nearly 5% of the world’s biodiversity, two long coasts on the Pacific Ocean and Caribbean Sea and the birthplace of ecotourism.  This is a land that is often called the model for conservation in balance with community development and economic growth.

For all of these reasons, Costa Rica’s main source of income is tourism, from which it receives almost $2 billion U.S. dollars per year, with 80% of visitors arriving to partake in ecotourism-related activities.  Since 1999, tourism has earned more foreign exchange than bananas, pineapples and coffee exports combined.

If you are not yet convinced of what many insiders have known for years, Costa Rica’s green initiatives and welcoming nature are on the rise in the world’s periphery.  If you are looking for a vacation home for you to personally enjoy or to rent out, Costa Rica is the generative environment that will keep giving for years to come.

 By Alex Swift

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May 11, 2023 in Discover Costa Rica, Life in Costa Rica, Real Estate in Costa Rica, Tips for Buyers

The term refuge is defined as “a place offering shelter and safety from pursuit, danger or trouble.”  In an era dominated by the environmental catastrophes of industrialization or a global health pandemic, Costa Rica is a refuge from the noise of politics, pollution and pandemonium found in much of the rest of the world.

But Costa Rica is more than that.  It is an experience.  It is a lifestyle.  It is an ethic.  There are myriad majestic landscapes awaiting visitors in this nation where land and water are kept in pristine conditions in many regions.  This is a land where you will find secluded waterfalls, peaceful rivers, breathtaking views, warm ocean waters, calm, quiet beaches, and sublimely fresh air, food and water.  This is a land to spend quality moments with your loved ones.  This is your personal getaway.

Many expats who have found their way to Costa Rica opt for extended vacations to escape from the cold winters of their homeland.  This is a country where you can purchase a property in the weather of your choice.  The average year-round temperature in the South Pacific region called the Costa Ballena is 80-94 degrees (28-34 degrees Celsius).There is no summer or winter, only warmth year-round, and you won't find tornadoes or hurricanes in this tropical region, with only the tail end of these extreme weather conditions even coming close to this region.

Top of the line amenities

This area of Costa Rica has everything that cash buyers are seeking from a tropical lifestyle, including premium views, elaborate exteriors, and deluxe terraces, pools, and outdoor showers.  Life happens outdoors in Costa Rica and all of your entertaining will be done outside.  

More recently, as access to high-end imports becomes more available, homeowners have been spending more on smart technology such as temperature controls, security and home theatre systems. 

As land value increases, older homes are being demolished rather than remodeled because construction has dramatically improved in recent years, allowing for more and better connection to nature.  As such, there is a large opportunity in land development, with new construction technology becoming more prevalent.  Wildlife refuges are a popular investment and infrastructure is being installed in environmentally considerate ways, like power lines below the ground tor the protection of migrating monkey troops.

The locations for many homes and businesses in Costa Ballena feel incredibly private and remote, despite being a short drive from towns, beaches and attractions.

Building in Costa Rica is a relatively straightforward process.  Permitting procedures are simple and the construction industry has developed significantly over the decades of expats commissioning structures, creating a higher demand for high-end construction materials.  These paths to paradise are well-traveled and investors find themselves in good company in Costa Ballena.

The type of people attracted to this region include those interested in vibrant natural wonders, surfing, yoga, wellness, as well as the ultimate in relaxation, all of which are abundantly prevalent and enjoyed in exquisite locations.  Home owners in Costa Rica find themselves with an up-close view of the region’s wildlife and scenic vistas.

Luxury is on the rise in Costa Rica

Lavish hotels showcasing a union between luxury and nature are drawing international visitors who want access to both adventure and relaxation.  With over 70% of the country preserved in protected lands and national forests, there is no shortage of natural wonders for visitors to enjoy, and increasingly wealthy travelers are bringing with them the expectation of luxury amenities.

Building a luxury home in the middle of the jungle with an eco-ethic will likely include lots of glass, allowing for the sensation of being the in jungle without the jungle being in your home.  Modern mansions are fast becoming the norm with high-end investors who tend to like to include infinity-edge pools, outdoor kitchens and floor to ceiling glass walls in their build for maximizing ocean views.  

Local architects have learnt to work with low-maintenance materials, solar-power systems and wells for drinking water, while featuring modern construction methods and materials in their designs for a sustainable and contemporary finished product.

For those who need a splash of the big city life, the capital of Costa Rica, San Jose, is home to theaters, museums, and the giant luxury shopping complex Multiplaza Escazu.  Here you can also find the country’s best private medical facility, Hospital Cima, a top of the line facility that caters to expats.

Investors into Costa Rica find themselves in good company with celebrities and business moguls who are buying large tracts of waterfront land for private estates, corporate retreats or family compounds.

The Costa Ballena region is especially popular with the elite crowd due to the exclusivity of luxurious amenities available and the ease of access to three international airports and two mega-yacht marinas.  They come to enjoy the relative safety and anonymity that this naturally secluded region of the world provides and notable residents purchase here for privacy and to savor the wild surroundings, not to broadcast their presence.

If you want to find yourself in the company of the best and brightest in a land where the wonders of nature inspire awe every day, Costa Rica’s Costa Ballena is the right place to invest.  Close enough to everything you need and far away enough from everything you don’t, this is truly the lap of luxury.

 By Alex Swift

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May 11, 2023 in Real Estate in Costa Rica, Tips for Buyers

The real estate market in Costa Rica is thriving in 2017. Agents at Luxury Property Costa Rica, a subsidiary of long time real estate servicer for the Costa Ballena Region, Osa Tropical Properties in Ojochal, Costa Rica are advising their buyers that now is a good time to invest in this sector.  Current market trends are on the rise and Marcia Oro, a real estate expert and investor in the Costa Ballena region of Costa Rica since 2010 is convinced that dividends will increase.

The Great Recession of 2008 presented the local market with a lingering lull, but the property market is heating up and will only get hotter, especially in the high-end bracket.  Foreign buyers continue to arrive with the hopes of acquiring a slice of paradise at the bottom of the market, but as popularity grows, so will the prices. 

“If you want a vacation home in Costa Rica, 2017 is likely to be your best chance to catch a deal,” suggests Oro.

Properties are still rebounding since the recession hit and the Canadian dollar is still low, making Canadian sellers (a large proportion in the Costa Ballena) highly motivated to make the strong U.S. dollar exchange.

The Costa Rican market lags a few years behind North America.  It began heating up in 2013 in the Costa Ballena region of Costa Rica, according to local sales records and prices are anticipated to rise in late 2017 and into 2018.  The housing market in Costa Rica nearly stalled after the 2008 global financial crisis but prices in early 2017 are still affordable compared to before 2008.

“Our region is seeing more buyers and many deals,” says Kevin Champagne of Osa Tropical Properties.  “Land is being developed again and new condos are being built due to the increased confidence in the market.  Real estate and construction starts are stronger than they were during the boom of 2004-2007 and we are excited for what’s to come.”

Retiring in paradise

Many more U.S. homeowners are interested in buying property abroad, according to the most recent International Home Buying Survey from the National Association of Realtors.  This increase is largely attributed to baby boomers approaching retirement age and becoming interested in securing a retreat destination.  Latin America holds the most interest for U.S. buyers, with price, proximity and weather being the major factors for drawing investors.  The weakness of the Colon (Costa Rican currency) makes living in Costa Rica desirable in relation to stronger currencies.

Costa Rica has open investment and trade policies and is known as the most politically stable country in Latin America, making property investment highly attractive to international buyers and affluent Costa Ricans.  Americans dominate the second-home market in Costa Rica and furnish the local economy with the largest number of tourists coming into the country.  There are numerous direct flights from major cities in the U.S., making this an easy destination to visit. 

Strong interest is growing from European buyers who are being increasingly opened up to this region with direct flights coming into Costa Rica from six major European ports, including London, Paris and Zurich.

Buyers often first come as vacationers, falling in love and finding themselves wanting to buy.

The first world economies of the world are becoming increasingly expensive, and hostile political climates are on the rise, making many consider expatriating.  Recent changes to the world establishment and currency shifts may represent uncertainty for many investors, but for some of the more savvy, these circumstances represent a buying opportunity.  The U.S. rate rise in early 2017 has resulted in a stronger U.S. dollar., further devaluing the Colon and making purchase in Costa Rica that much more desirable.

There is a strong diversity of property options for investors and many are opting to buy their vacation home in Costa Rica, where investors are free to use their property in any way they choose.  There is no need for residency status to buy real estate, which can be purchased under an anonymous corporation.

Beach properties are more affordable in Costa Rica than comparable properties in the U.S., positioning the nation second behind Mexico for top interest from U.S. foreign home buyers. Sales volume has increased by around 60% in the Costa Ballena, according to the team at Osa Tropical Properties.  Newly constructed homes can be less than half the price of similar properties in the warmer, coastal areas of the U.S.  Exceptional value can still be found on high-end properties along the Pacific Coast, especially in the region of Costa Ballena.

If you are considering investing in foreign real estate, Costa Rica is a world-class option, with mountains, jungle, surf and climate all testing as some of the most preferred by travelers and investors alike.  Follow your dreams to this luxury destination that you will love for years to come.

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