Archives for August 2019

Why Attend the Costa Rica Southern Zone Expat Forum?

August 30, 2019 by Costa Rica Guy 3 Comments

10 Reasons to Attend the Costa Rica Southern Zone Expat Forum…

As you might have heard, Coldwell Banker is hosting a Costa Rica Southern Zone Expat Forum in October (see more details below). The forum will be all about opening the minds of the participants to the high quality of expat life offered in Perez Zeledon.

To help fully convince you of your need to attend, here are 10 solid reasons why YOU should be at the Costa Rica Southern Zone Expat Forum…

Because you will learn that Perez Zeledon is the up and coming retirement mecca of Central America. You might have heard about Boquete in Panama from International Living as being the new retirement haven? Well, Perez Zeledon offers much more, including a vibrant and growing city, the most breathtakingly beautiful mountains of Costa Rica, and the ability to live in a cool elevated mountain micro-climate and still be less than an hour from the gorgeous Costa Ballena coastline.
You will learn about the amazing things happening in San Isidro de El General, the key city of Perez Zeledon, and the gateway to Costa Rica’s still pristine southern zone. You’ll learn about the new international hub airport that’s being planned for the city. You’ll learn that a Four Seasons resort, one of the nicest in all of Central American, is located 30 minutes from downtown. Okay, I’m not giving any more away. You’ll just have to show up and learn about a lot of stuff you just didn’t know about this place.
You might notice it on the drive into town, but Perez Zeledon offers some of the most scenic mountain vistas of all of Costa Rica. After all, the city of San Isidro is flanked on one side by the towering Talamancas, the highest mountains of Cost Rica, and on the other by the coastal range we call the Fila Costeña. I’ve lived in Costa Rica for going on two decades and I know the entire country pretty darn well. I know of no more beautiful a place than Perez Zeldeon.
Some expats want to be surrounded by other English speaking folks that look and talk like them. Those are the ones that often opt for touristy locales like Tamarindo, Jaco, Manuel Antonio, or even Dominical. Others want the full cultural immersion experience. Well, the latter is what you get in Perez Zeledon. The city of San Isidro has a population of around 50,000 and the entire canton of Perez Zeledon, over 150,000. This is middle class tico existence at its best folks, and we gringos aren’t going to change that anytime soon.
You’ll learn that San Isidro de El General is home to great health care, perhaps as good as it comes outside of the gran metropolitan area of San Jose. We have a regional hospital, many private clinics, resident specialists of all kinds, and great dental care to boot.
If you’re on a fixed income, Perez Zeledon is a great place to live and not break the bank. If you’ve been living in Costa Rica already for a while, especially in one of those touristy locales, again, like Tamarindo, Jaco, Manuel Antonio, or even Dominical, you’ve noticed that there ain’t nothing cheap about it! In fact, prices can be as high or higher than back in the States. Well, Perez Zeledon is different. This is not a tourist locale and you can find values of all kinds, like at the weekly farmer’s market that’s the largest in the region.
You’ll find out that there’s simply nowhere in Costa Rica that offers the ability to live in rugged mountains in the shade of the highest peak in the county, Cerro Chirripo, and still be only an hour or less from the Costa Ballena coastline. And, oh, what a gorgeous coastline that is. I call it the “Big Sur” of Costa Rica!
You’ll find out that downtown San Isidro de El General is like one big shopping mall. You can find anything you need or want and great deals to boot. The second-hand clothing stores around town are amazing. It’s probably because San Isidro de El General is close enough to the Panama border to almost be considered a “border town,” but without all the ugliness that’s usually associated with those types of towns.
You’ll find out that Perez Zeledon does indeed have a touristic draw, especially with Chirripo trekkers. But you’ll learn about many other naturalist areas of interest due to its innumerable rivers, waterfalls and nature reserves.
You’ll find out that surprisingly, as rugged as those verdant mountains are, those charming little mountain pueblos that dot the hills and populate the canton actually have great infrastructure, with good roads, the best quality of air and water you’ll find anywhere and all the services that make mountain living in Perez Zeledon so darn cool and comfortable.

Ok enough with the spoilers, just come and see for yourselves. And, since I am in charge of the whole affair, I’ll make sure you have fun!

We’re contemplating adding a morning bus tour, sort of a mountain loop that I often take my expat tour customers on, for day two. It would terminate at the weekly Thursday Farmer’s Market, that always tends to blow the minds of my expat tour customers, as it is an under roof football field-sized offering of everything locally grown.

What do you think about that idea?

The Costa Rica Southern Zone Expat Forum will be a one-day event for fellow expats living in other areas, or folks who just happen to be visiting on the event’s date, who want to know more about the high quality of expat life offered in Perez Zeledon. We’ll have some influential guest speakers and a whole lot of fun. The forum will be held at the Simple Market, which is one of the new hip eateries providing a cosmopolitan flair to San Isidro city life…

Don’t dicker though, space is limited!

Click on the image below to learn more, or just call me (Scott) at 8559-2686.

Costa Rica Buy and Build versus Buy Built Dilemma

August 24, 2019 by Costa Rica Guy Leave a Comment

Many of my customers aren’t sure whether they want to buy land and build, or just buy a finished house, turn-key and ready to move in, with suitcases in hand. Others are completely and adamantly clear on the issue.

This post is written for the former types…

So, what is the better choice?

Unfortunately, there’s no clear answer to this question. It depends entirely on your objectives and capabilities.

So, you ask, why would anyone want to undergo the hassle of buying land and building in a foreign country, instead of just finding a quality home, already built, that passes inspection?

Well, there are many reasons…

Here are a few that come to mind…

There’s the reason of pure investment return. It is true that you can, or it is possible, to buy a lot and build and end up with something worth more, considerably more, than you put into it. For instance, you could buy an acre of land at the beach, with an ocean view, for say, $125,000. You could build a 2 bedroom, 1,500 square foot, home on it, for say 120 per square foot, or $180,000. Add a pool for another $20,000 and be “all-in” at $325,000 and at the end of the day have something you could potentially sell for $350,000.

“On paper” you just increased your net worth by $25,000 and have an unrealized 8% return on your investment.

Notice, I said that it’s possible to accomplish the above. It’s also possible to screw up in a myriad of ways and end up paying more to build than the home will be worth once built. The key to success in this regard? Well, not overpaying for the land, of course. Also hiring a builder that keeps costs at budget, or below. And, perhaps most importantly, building something that will have a high re-sell value.

So, again it’s possible, but there are a lot of variables (or risk factors) involved. And the above calculations do not put a cost on the time, effort and humiliation you will probably undergo in the process!

Some people have an idea of what they want and just can’t find it already built. So, they have to hire an architect, draw up the plans, and build to their own specifications. If you are in that category of “picky” buyer, then by all means take the plunge and build. However, if you want to also have success with regard to point #1 above, just make sure that your idea is something other people would also find attractive, if you know what I mean.

Then you have that person who finds the “perfect” piece of land and just has to build on it. I find it a bit difficult that the “perfect” piece of land actually exists, but I have had buyers who just fell in love with a lot, usually because of the view. There’s an awful lot of land out there for sell, listed and unlisted, so be careful about regarding any particular piece you might stumble upon as being “perfect.”

Also, make sure you can actually get a construction permit to build on your “perfect” piece!

Oh, buy the way, don’t be one of those gringos who tries to do everything the short-cut way, for instance, building a house without a permit. Yes it can be done and is still done (although less often than in the good ole days), but that doesn’t mean YOU should do it!

Some buyers just relish the challenge of building in Costa Rica. Now, those are rare birds, but if you are an experienced builder back home and believe you can handle the heat of building in a foreign country, then by all means have at it.

Of course, you can also have a buyer who’s a combination of some, or all, of the above. If that’s you then I would say you are the best possible candidate to build successfully in Costa Rica.

I’m not going to go into the ins and outs of building, although here’s an article by Ivo Henfling that does that to some extent. You will probably need to hire a general contractor type, who speaks English, to handle things for you. That is, unless you can communicate well enough with Costa Rica contractors who don’t speak English AND you will be present in Costa Rica a good deal of the time during which the building will take place. It can take anywhere from 8 months to a year to build. It’s usually better to try to accomplish a good chunk of that, especially before being under roof, during the dry, or summer, season (December through April). Otherwise, workdays will be limited and the timeline can get drawn-out.

Building a home in a foreign country can be an exciting and rewarding undertaking. It can also be a nightmare that you’ll spend your first years in Costa Rica recovering from, if you ever do fully recover! In my opinion, it’s smart to weigh your objectives against the potential risks very carefully and proceed intelligently.

That’s not to say that building here is some monumentally difficult task. Geez, countless “gringos” have done it quite successfully.

And you can too!

Before you decide regarding the Costa Rica buy and build versus buy built dilemma, please make damn sure you know exactly what you’re getting yourself into.

The Number One Costa Rica Investing Mistake

August 20, 2019 by Costa Rica Guy 6 Comments

I was having lunch with some clients the other day and the question came up, “what’s the number one Costa Rica investing mistake?”

I’ll have to admit the question threw me back for a moment or two. After all there are so many of them, like…

paying too much…
not doing your due diligence…
getting ripped off, or lied to, by lawyers, sellers, realtors (yes, those guys), builders, etc., etc…
not having adequate or legal water…
buying or building something that you’ll never be able to resell in 100 years (now that’s a big one)…
I could go on…

However, I really don’t believe any of the above would constitute the Number One Costa Rica investing mistake.

So, I guess you want to know what it is…

wait a minute…drum roll….

Buying in the wrong damn location!

Yep, in my humble opinion that’s the one. And if you couple that one with any of the above, especially the poor re-sell value one, boy you’ve got a real potential disaster on your hands.

How do you avoid this number one Costa Rica investing mistake?

Well, some attempt to avoid it by renting for a time. However, there are some issues with that idea (and I’ll probably soon do a post on that topic alone). For starters, where will you rent and how do you know that THAT place is truly where you want to buy? Also, which direction is the market moving in? If the answer is up, you might end up paying a lot more by waiting around. Finally, how much time? I’ve seen a lot of folks get mired in “paralysis of analysis” by adopting the rent first, buy later stance.

I think the better option is to make one, or maybe two (or even several), reconnaissance trips and scout out various areas that tend to tick your boxes. Stay in each area a week or so, as opposed to renting there for 3 to 6 months (which is really a bit of overkill). You can get a good sense of whether an area is for you, or not, in a week or two, I think. That is, if you really take the time to get out an explore that area and immerse yourself with its culture a bit.

I might be tooting my own horn, but I really think a good framework to run each potential location through is my 4 C’s of Costa Rica expat living one. You know, the framework with the 4 criteria of Climate, Convenience, Culture, and Context. The first three are easy enough to get a handle on, but it’s that last one that throws folks and that’s probably the most important one. It’s also the one that really requires more time in the area to come to grips with.

The bottom line, or the context of the Context, is this…does this place really reflect the type of life that I want to live in Costa Rica…for the long-term?

If you’re an old fogie expat like me, you probably don’t want (or have time for) too many more mistakes in this regard.

If you end up buying somewhere that seems nice enough to begin with, but ends up being a den of complete misery after a year or more, well, then you’ve kind of f’ed up, haven’t you? Oh I can just sell and move on, you might be thinking. Think again, the average time on the market in our area is about 2 years! And for some properties, it’s forever!!

You might be able to “sell and move on” only after taking a serious investment bath, under a faultily-wired suicide shower, if you know what I mean.

I believe the location decision is indeed a crucial one when you’re considering moving your entire life to a foreign country. Costa Rica is very diverse, geographically, demographically and in many other ways. You sort of have a whole smorgasbord of potential at your behest.

You can can be a beach bum, living in a sultry hot and humid touristy locale. You can be a cosmopolitan city dweller, sipping lates while writing your magnum opus. You can be a highlander, living in some verdant towering cordillera and perfecting your yodel. You can be Indian Jones, complete with a floppy fedora, machete and severe case of jungle rot.

Catch my drift?

So, the moral of this story is take your time when it comes to the location issue. Don’t rush into anything regardless of what your “friend” who’s been to Costa Rica one or two times might tell you. In fact, be careful even listening too much to the local expats in particular areas you want to check out. I mean, yes do talk with them, but take what they tell you with a grain of salt. Some of them might just be trying to rationalize their having committed the number one Costa Rica investing mistake themselves!

Granted, the above advice is for folks intent on buying. Others are just fine with renting for years before making a decision to buy, or perhaps never buying at all. There’s certainly something to be said for that mindset of remaining footloose and fancy free. Owning a property in a particular locale does tend to tie you down there. And even when you’re able to break away, you’ll be constantly worrying about that little piece of paradise with your name on the title.

Bottom line is to weigh these decisions carefully before you actually sign…on the bottom line…

Perez Zeledon – Costa Rica Retirement Mecca?

August 12, 2019 by Costa Rica Guy 6 Comments

On my morning walk today, through my little “hood” of Quebradas, Perez Zeledon, acknowledging a gorgeous good mountain morning to other expat walkers living in the area, something dawned upon me…

Everybody around here, at least the expats, are sort of old fogies…myself included!

Hey, I’ll be hitting 60 in a couple years. Granted, 60 is the new 40, but I have to tell you, my get up and go seems to have got up and went on many mornings these days.

I got to thinking about the concentration of older folks here in Quebradas and you know what, it makes perfectly good sense. This place really is (or is becoming) a Costa Rica retirement mecca.

By this place I mean the whole of Perez Zeledon, of which Quebradas is only one small part of, albeit a very popular part!

Now, granted, Perez Zeledon is not quite as “on the radar screen” as other more touristic locations that have attracted the lion’s share of expats to Costa Rica. And of course there’s San Jose and the entire Central Valley, which surely has the highest concentrations of them.

Nevertheless, the point of this post is that there’s no reason that Perez shouldn’t be a (or perhaps the) Costa Rica retirement mecca in the near future. And by the looks of things here in Quebradas, it is in fact slowly becoming just that.

Now why is that?

Well, there are many reasons. I’ll express them below in terms of my usual 4 C’s of Costa Rica expat living (climate, convenience, culture and context)…

First, there’s the climate. While the Valle General, where the city of San Isidro de El General is located, can get pretty hot during the day (however, not as hot as the beach, mind you), all you have to do to beat the heat is drive up into the towering and verdant Talamancas for a few minutes. There you’ll arrive at one of the many mountain pueblos, like Quebradas, that have high enough elevations to experience near perfect weather via one of Costa Rica’s famous “micro-climates.”

You see in Costa Rica the weather is fairly consistent, at least temperature-wise, all year long. However, temperature can vary greatly by altitude, if not by season, and here in Perez we’ve got plenty of altitude. The entire valley is overlooked by Costa Rica’s highest mountain, Chirripo, that stands at some 12,536 feet.

Next there’s the convenience factor. San Isidro de El General is the second largest city outside of the Gran Area Metropolitana of the Central Valley. It is also perhaps Costa Rica’s fastest growing one these days. The medical care in San Isidro is varied and quite good. You have the canton’s regional public hospital located here, as well as numerous private clinics and specialists of all types. You’ll also find a surprising number of dental-care options.

We have shopping galore, new eateries opening up all the time, a mall with a cinema, and, wouldn’t you know it, a gargantuan Walmart currently under construction.

We also have an airport that’s slated to undergo a major expansion and become a domestic hub for Costa Rica flights, as well as possibly offering limited international service.

The culture of Perez is also one of the draws that makes it a potential Costa Rica retirement mecca. Unlike the beach destinations, where tourism is rampant, as well as all the good and bad stuff that goes along with that, the mountain culture of Perez is more authentically tico.

Perez is a solid middle class tico canton. Many of the ticos here are farmers, landowners, or business owners. They are really salt of the earth people. Their’s is the predominant culture and I don’t think the steady influx of old fogie gringos, like me, will be changing that any time soon.

On the contrary, the high tourist traffic beach destinations tend to overtake the local culture and become what I often call a “bubble culture” that’s just not what I choose to want to live within. Hey, I grew up in Myrtle Beach, South Carolina, if you know what I mean!

Granted, if you see the context of your Costa Rica expat existence as a beach bum, or surfer dude, then by all means opt for the playas, where you can grab your board and take off for the waves and then party the night away. For us old fogie’s, however, the tranquil mountain culture seems to be more our style.

And we can visit the beach any time we want. In Perez, it’s less than an hour away!

Oh yea, I almost forgot that’s another thing that makes this place so great. You can have your cake and eat it too in Perez, meaning mountains AND beaches!

If you want to learn more about this new Costa Rica retirement mecca, I’m hosting a Costa Rica Southern Zone Expat Seminar in October.

In short, it will be a one-day seminar for fellow expats living in other areas, or folks who just happen to be visiting on the seminar date, who want to know more about the high quality of expat life offered in Perez Zeledon. We’ll have some influential guest speakers and a whole lot of fun. The seminar will be held at the Simple Market, which is one of the new hip eateries providing a cosmopolitan flair to San Isidro city life…

Don’t dicker though, space is limited!

Click on the image below to learn more, or just call me (Scott) at 8559-2686.

New! – Conventional Mortgages for Costa Rica Expats

August 9, 2019 by Costa Rica Guy 3 Comments

The usual answer for the question, “can I get bank financing in Costa Rica?,” has been a resounding no.

However, that might be changing!

We had the good folks from ScotiaBank Costa Rica come and give our agency a presentation recently on the topic of their new program for granting mortgages for Costa Rica expats (non-residents).

The ability to actually get a 20 or 30 year conventional mortgage as a non-resident would be a welcome change. The Costa Rican real estate market has been a predominantly cash market, with the only real opportunity for financing coming from the sellers of properties themselves. Usually such seller-financing is available, if at all, only for a short term of 3 to 5 years, at simple interest rates of from 5 to 8%. The terms are completely up to the negotiation between buyer and seller.

From what I was hearing there are a few “catches” with regard to ScotiaBank’s new mortgages for Costa Rica expats program…

These loans are only available to non-residents that meet certain criteria. Probably of most importance is that a non-resident with less than 6 months in Costa Rica can only apply for a mortgage for a vacation home and not a principle residence.

The initial interest rate would be fixed for three years at 8.5%. Afterwards, it would be a floating rate pegged to the New York prime, plus 2.5%. With fixed rate mortgages currently under 5% in the U.S., this dollar rate of 8.5% is quite high and not a fixed rate. Could it go lower than 8.5% in the future? The answer I got was yes, but of course it could also go higher, much higher. In fact, there is no ceiling as to how far it could go!

The terms for these mortgages range from 20 to 30 years, depending on factors like time in (and ties with) country and credit worthiness. You would have to submit a U.S. credit report if no credit had ever been established in Costa Rica. And for practically all non-residents, that would be the case.

The loans can be prepaid without penalty, but only after two years of amortization. Prepaying a loan in the first two years would incur a 5% penalty.

There is an income requirement of at least $5,000 per month. It also matters what percentage of monthly income is for payment of any currently existing mortgages or debts, but I was not completely clear on those percentages. You would have to prove income with tax returns, social security receipts, and the like.

Loan-to-value ratios range from 60 to 80%, depending on a number of factors. The properties will have to be professionally appraised and the “value” in the LTV ratio will be the appraised value. I can see this being a problem in many deals, as often the purchase price and the appraised value will probably not coincide.

Also, the bank will not lend for certain types of constructions, for example stick-built homes. Most homes in Costa Rica are concrete block, or concrete pre-fab, but these days newer and lighter methods of construction are being used and homes are being built in our area with Chilean pine, which is apparently completely insect resistant. However, a Chilean pine-built home would apparently not qualify for a loan. That sucks because the pine homes I have seen have all been spectacular.

Loans would be extended for construction, as well as already built homes.

I asked the question of whether any mortgages for Costa Rica expats had been extended so far, to which I received the quick retort, “of course they have.” However, none of us Coldwell agents have had any experience with this so far. I will be interested in seeing how accommodating this bank will be to our customers. I have found Costa Rica banks to be overwhelmingly bureaucratic and I would imagine the process of getting a non-resident mortgage will be challenging, to say the least.

The advent of conventional mortgages for Costa Rica expats could have a dramatic impact on the Costa Rican real estate market. I am sure if one bank has success with this others will quickly follow suit. One of the “brakes” on this market has long been the fact that such mortgages weren’t available. It is only a small percentage of wannabe expats that have the kind of cash laying around to buy a property in Costa Rica for $300 to $500K, or even more!

I am of course excited about this new development, but will be reporting in the future as to the actual practice of granting these loans and whether or not it indeed is practical enough to make a difference for the investing appetite of the average North American.

Archives for August 2019

10 Reasons to Attend the Costa Rica Southern Zone Expat Forum…

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