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The Costa Rica Real Estate Market – Past, Present, & Future

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The Costa Rica Real Estate Market

The Costa Rica real estate market has witnessed significant changes over the years, driven by foreign investments and evolving market dynamics. In this post, we will explore the historical background, current state, and future prospects of the Costa Rica real estate market.

The Past

One word I would use to describe the Costa Rica real estate market of the past is “inefficient.” Inefficiency in any market is a double-edged sword, giving rise to both risks, as well as opportunities.

While the current Costa Rica real estate market can hardly be described as wholly efficient, in terms of readily available information to help guide your investment decisions. It’s not the “wild west” that it used to be.

Long gone are the days when gringos could take advantage of “poor” Costa Rican farmers who were more in need of cash than dirt. Buying properties at pennies on the dollar might still be possible in today’s market, but those opportunities are rare to find. These days the really cheap stuff is usually that way for legitimate reasons.

The Costa Rica government has in large part wised up to the shady shenanigans of unscrupulous foreign real estate investors and developers. These days the laws related to property ownership and development are for the most part enforced in areas where foreign real estate investment is rampant.

That’s not to say that attempts to cut corners and build or develop in ways that don’t fully comply with the rules isn’t still going on. But it’s not common practice like it once was. And foreign buyers these days are expecting you to have followed those rules when they consider your property for investment. Skirting the rules and not dotting your i’s and crossing your t’s can come back to haunt you upon resale.

A lot of folks who bought in the past have seen substantial appreciation, with values doubling, tripling, quadrupling, and so on. Do those opportunities simply not exist anymore? Probably not. As the market becomes more efficient, highly speculative opportunities generally tend to dwindle.

The Present

The word I’d use to describe the present Costa Rica real estate market is “semi-efficient.” As the market has matured over the years, better information has become available. I wouldn’t say it is now “readily” available in the sense of a highly efficient market like in the U.S. However, there is information out there, often hidden from plain view. That’s where experienced professionals can really help. 

I believe that my job as a real estate agent in Costa Rica will not be taken over by AI anytime soon. I can’t say the same about my fellow realtors in countries where the market is much more efficient in terms of easily accessible online information. In Costa Rica human interaction with a live real estate agent is a valuable asset for any would-be investor navigating the lingering market inefficiencies that still exist.

Around June of 2020 the short-lived COVID-19 real estate downturn (largely due to the country closing its borders to the outside world) turned on a dime. What had been a buyer’s market since the crazy days before the 2007 world-wide crash, suddenly became a seller’s one. That phenomenon has lingered basically up to the date of this blog post. However, there are signs that it is starting to turn back. 

The COVID inspired buying craze is somewhat subsiding as market pressures are making it harder to find the cash to buy in Costa Rica, which is largely an all-cash market for foreign investors. Listing inventories are on the rise and demand is not keeping up. I predict that while the market will remain a vibrant one, since many of the reasons that drove the COVID craze still exist, a better equilibrium between supply and demand will take hold as we move into the future.

The Future

The future is where things get more interesting. The Costa Rica real estate market will become increasingly efficient as time moves on. The licensing of real estate brokers and agents will likely be mandated, ensuring a higher level of professionalism. The national registry may become more accessible to foreigners, potentially available in multiple languages. The ability to demand that realtors provide a reliable “CMA” (comparative market analysis) will likely become a reality for both sellers and buyers. 

Costa Rica will likely have an actual nation-wide multiple listing service, accessible to foreigners and their out of country agents. This has actually already been developed, but the bugs are still being worked out. It will be a few years before this new MLS achieves the widespread use necessary to make it an essential tool for the Costa Rica real estate investor.

There’s also the question mark of the U.S. dollar retaining its position as the world’s reserve currency. The strength of the dollar against the Costa Rican colon has been another driver of the incredibly strong market we’ve been experiencing. However, this year has seen a downward slide by the dollar. Some smart investors are warning that slide may continue and even gain momentum as large holders of the mountainous U.S. debt seek safer havens. While the U.S. dollar is not likely to collapse anytime soon, a continued slide would make buying with cash in Costa Rica an even more challenging proposition than it already is.

Costa Rica has always been an all-cash market for foreign investors. There just aren’t any legitimate opportunities to obtain conventional-type mortgage financing in the country and U.S. banks won’t lend on foreign properties. Could this change in the future? Probably, as Costa Rican banks seek to exploit the opportunities stemming from ongoing strong foreign investment interest. There’ve already been a couple banks launching expat lending programs, but not in any aggressive sense that makes them viable for most investors.

Conclusion

The Costa Rica real estate market has experienced a significant transformation from its early days of exploitative practices. As the market becomes more efficient and information becomes readily available, investors will be drawn to the safety and transparency it offers. Costa Rica continues to provide affordable options compared to other countries with similar amenities. Moreover, the appealing factors that attract visitors and residents to Costa Rica are likely to remain unchanged in the foreseeable future.

Want Your Costa Rica Deal To Go Smoothly?

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Want Your Costa Rica Deal To Go Smooth?

Generally you’ll find a fairly ordered deal process in areas of the country where there is vibrant activity in the expat real estate market.

However, it still ain’t Kansas!

There are marked differences in the way things operate down here versus the States.

Over my years of orchestrating real estate deals in Costa Rica, I have observed a few commonly repeated mistakes.

If you want your Costa Rica deal to go smoothly, you’d do well to follow the advice below…

Don’t Get Lawyers Involved at the Offer Stage

Offers, called letters of intent (LOIs) in Costa Rica, are informal documents. Your agent should certainly be capable of preparing one. If not, get another agent. There is no good reason to have an attorney get involved at this stage. Once there is an accepted offer in place, then an attorney, usually the buyer’s, will prepare a contract. We call that an SPA, which stands for “Sales and Purchase Agreement.” Once that’s in place, the LOI becomes irrelevant, for the most part.

Understand and Comply with Local Deal Customs

In every area there are certain deal customs that your real estate agent should inform you of. For instance, in my area it is customary for the buyer to make a 10% (of the full purchase price) deposit. This deposit has to be made a certain time after the SPA is last signed, usually within 14 days of signing.

Also, in my area it is customary for the “pure” closing costs, which consists of the transfer tax, stamps and notary fee (usually a bit more than 4% of the total deal price) to be split 50/50 between buyer and seller.

Now, you can always negotiate something different. But don’t be surprised that your seller is expecting that local customs be followed. To try and negotiate something contrary will be going against the grain and could produce a failed negotiation.

Also, as an aside, I think I should state the obvious that you shouldn’t try to change the basic terms of the deal that you agreed to with the LOI in the SPA. That smacks of bad faith negotiation and could crater your deal. The SPA should tack what was agreed to in the LOI.

Use an Escrow Company to Handle the Money

Costa Rica’s banking laws make it downright impossible for an expat whose legal status in Costa Rica is via a “tourist visa” to bring into the country the amount of money necessary to close a real estate deal. To do that, you will generally need to use an escrow company. There are numerous licensed companies doing business in Costa Rica.

Not only do they help you legally manage the process of bringing substantial sums of money into the country, but they also participate as a third-party who will be solely responsible for handling the money and making payments appropriately at closing. I’ve never seen a deal go smoothly when the parties have tried to avoid using escrow. And, many times, they end up having to utilize one after their attempt at not doing so has failed.

If Needed, Have Your POA in Place Early

Many expats will close their deals while absent from the country. This is indeed possible with the use of a power of attorney. This can get a bit complicated, but suffice it to say that if you’re going to be closing with the use of a POA, make sure it is ready to go well ahead of the closing date. In other words, don’t wait to the last minute on this one!

Make Sure Deal Timelines Are Being Followed

The SPA will set forth timelines for the completion of various milestones on the road to closing. Chiefly, there’s a timeline for completing due diligence, typically 30 or 45 days. There’s a timeline for opening escrow and making your deposit, typically 10 or 14 days. And there’s a timeline for closing the deal once positive due diligence is acknowledged, also typically 10 to 14 days. In other words, once the 30 or 45 day due diligence period is over and you as the buyer have stated your desire to proceed to closing, you will have x number of days to prepare and close.

It’s a good idea to be cognizant of these timelines and make sure that parties are following them. If they need to be extended, an amendment to the SPA will generally be required. Also, it’s a good idea for the SPA to state the timelines in terms of either working days or calendar days.

Don’t Wait for Your Major Due Diligence Inspections to be Scheduled

There are various inspections a buyer might choose to undertake for due diligence. However, the two most common are the home inspection and survey. In our area, there are good home inspectors and surveyors to choose from. However, the good ones are all super busy, especially these days. Therefore, it’s a good idea to get these services contracted for and scheduled immediately after the SPA is signed.

Don’t Blindly Rely on Your Agent or Attorney to Get Things Done

It’s always a good idea to know who’s responsible for getting things done on the way to closing and when they’re supposed to be done. And then it’s an even better idea to follow up and make sure those things are indeed done as expected.

If You’re Using a Corp, Have it Created Well Ahead of Closing

Some expats get a little too eager about setting up a corporation even before they’ve identified a property to purchase. That’s neither necessary nor a good idea.

A corporation can be set up relatively quickly and your attorney can do so in your absence. While there are good reasons to use them to take title in your purchase, these days there are annual red-tape requirements that have to be complied with. You don’t want to be stuck with having to spend money to legally maintain a Costa Rica corporation, even when you don’t really need to.

In my opinion, I would wait until later in the due diligence stage, when it looks like your deal will indeed close, before you form the corporation. However, keep in mind that having a corporation in place is one way to close via a POA while not being present in Costa Rica. So, while I’m advising you to wait to form one, don’t wait too long!

Have Your Money Ready to Go Well Ahead of Closing

I don’t know how many deals I’ve seen get delayed because the money is not in escrow, fully credited by the Costa Rica bank, and ready to be used for the closing. Costa Rica banks are incredibly bureaucratic. It’s one of the facts about Costa Rica life that will drive you nuts as a newly minted expat. Make sure you have jumped through all the hoops to have your money ready to go on the closing date. That’s the main reason for that 10 to 14 day period from the end of due diligence to closing. Use that time wisely!

Be Available on Closing Day!

Even if you don’t plan to attend the closing, by all means be available by both phone and internet at the appointed time. Even if you have given someone a POA to sign for you, you will still need to sign documents at closing. Chief among them are the Funds Release and the Closing Statement. Those two documents show how the money gets distributed by escrow and the escrow company will want your signature on these, not the POA’s. If they can’t get ahold of you, your deal won’t close.

Also, things can and often do go awry at closing that require your attention. So, don’t be out on a boat in the middle of some lake with no phone or internet service! I use that example because it just happened during a closing. Everyone was sitting around the table waiting for the seller to sign the aforementioned documents by DocuSign from the States. However, the seller was nowhere to be found!

I’m sure I could come up with a few more tips, but those I listed above are ones I see often getting in the way of a smooth deal.

Has the Costa Rica Real Estate Market Already Seen Its Best Days?

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Has the Costa Rica Real Estate Market Already Seen Its Best Days?

Earlier this year I wrote a post that attempted to forecast the Costa Rica real estate market for 2022 and beyond. In large part what I wrote has been consistent with experience.

Nevertheless, this very fluid situation continues to evolve. There have been changes in the financial and political landscapes that could indeed spell trouble (or, perhaps, opportunity) in the year(s) to come…

The Financial Landscape

While I correctly predicted the possibility of inflation rearing its ugly head in 2022, I had no idea it would do so to the extent that it has.

At the moment inflation in the U.S. is the highest it’s been since the 1980’s. As a result the Federal Reserve has taken strong action to apply the brakes on an overheated economy, which has been driven by historically exorbitant government spending and post-pandemic pent-up demand.

And I believe one or two more rate hikes could come later in the year.

As a direct result interest rates on mortgages have doubled from that of recent years, soaring from 3% to 6%!

Of course, I purchased my first home back when even higher 30-year fixed rate mortgages were the norm.

Despite the recent hike in rates, the real estate market in the U.S. remains relatively strong, but with signs of weakness beginning to show.

What does that have to do with Costa Rica real estate sales in the short term?

Well, I have Costa Rica deals currently contingent on sales happening in the U.S. And those rising mortgage rates only add to the anxiety!

In addition to “potential” U.S. real estate market woes, the stock market has now entered into “bear” territory. And the crypto market has all but collapsed.

What does all this mean for Costa Rica real estate in the coming months and years?

Well, at first blush you’d think it would mean bad stuff.

However…

One thing I predicted in my previous article that has not come true, yet, is weakness in the U.S. dollar. The dollar has now reached the record level of 700 colones. Efforts by the Costa Rica government to strengthen the colon against the dollar have been to no avail. The colon continues to sink. That, of course, makes earning dollars and then buying colones-priced goods a lot more attractive…

Will a strong dollar offset other negative aspects of a broader U.S. economic slowdown?

Will dollar strength against the colon (and other currencies) continue, despite high inflation in the U.S.?

Those are difficult predictions to make.

In my opinion, the Costa Rica real estate market, a least that part of it currently dominated by foreign investment, will stay strong, basically as long as buyers have the money to buy.

For foreigners, Costa Rica is a cash market, for the most part. So, it stands to reason, that the market will stay strong as long as those foreigners have the money to buy with cash in Costa Rica. That is, if other, politically inspired, reasons for moving here either remain the same, or increase (see below).

The wildcard in all that is just how low can the economy in the U.S. go without dampening the will to sell everything and move to a foreign country? Can the government orchestrate a “soft landing” and tame the inflation beast?

Only time will tell.

The Political Landscape

There have been some nuclear level bombshells that have rocked the U.S. politically…

Most notably, the revelations of the January 6 commission as have been displayed before our very eyes and ears during the ongoing public hearings.

And, perhaps even more or equally notable, the historic overturning of the Roe v. Wade decision by the U.S. Supreme Court. A decision that has seen the court engage in the almost unheard of action of taking away an individual right that had been enshrined and enjoyed by women for over 50 years.

Now, I’m not going to shed any personal political views on these two events, but only offer my opinion on how they might affect the Costa Rica real estate market.

As was stated in the previous article, the political goings on to our north have been a major driver of the wave of immigration Costa Rica has seen in the last two years from both the U.S. and Canada.

The U.S. remains a deeply divided country. Those on each side of that divide are not happy with the direction of the country. In Canada, a very similar scene is occurring, with opponents of the Trudeau administration representing the vast majority of Canadian expats in Costa Rica.

Therefore, I can only see these deepening political divides playing an even stronger role in the decision to leave the U.S. (or Canada) for greener pastures. And Costa Rica appears to be one of those preferred greener pastures.

There is also the looming specter of the 2020 mid-term elections and the Kraken that could be released in 2024, if Donald Trump is able to gain the Republican nomination. If he is able to pull off another of his “Teflon Don” miracles and escape the criminal ramifications of what the Jan 6 commission is revealing, he may very well become Number 47!

What would that mean for Costa Rica real estate, as well as the stability of the world at large?

I shudder to predict.

Let’s not get that far ahead of ourselves. After all, there’s plenty to think and worry about long before we ever get to 2024.

The bottom line of all of the above is that it seems to me that the Costa Rica real estate market will remain strong in 2022 and probably remain strong in 2023. Although by next year, economic weakness in the U.S., especially in the housing sector, could spell slower sales than we’ve been experiencing since late 2020, when the Costa Rica market took off like a rocket!

In the short to mid-term, I believe the COVID-inspired desire and ability to work remotely, the strong desire to escape political strife, and swollen bank accounts filled by insanely hot financial markets in 2020 and 2021, should keep driving the current “expat invasion,” at least a good while longer.

Costa Rica Real Estate Market Forecast 2022

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On April 11, 2020, less than a month after Costa Rica closed its borders on March 16, I posted that there could be a “silver-lining” with regard to the effects of the pandemic on the Costa Rica real estate market.

Did my prediction come true?

You betcha it did!

Granted, it wasn’t until the latter part of 2020 that the market started turning around. Then in 2021 all hell broke loose as Costa Rica experienced one of the strongest bull real estate markets ever!!

How about 2022?

Will the bull continue to buck strong in the Costa Rica real estate market??

Before getting right to the prediction, let’s address a few questions that could lead to problems in the coming year (or years)…

What Will Happen to the U.S. Dollar (and Economy)?

One of the phenomena noted in that 2020 post was that although the COVID crisis had and would take a dire toll on the U.S. economy, the stock and real estate markets there had stayed relatively strong…

Why?

Mainly because the U.S. Government and its Federal Reserve Bank made sure it was so. How? By printing money and lots of it!

Now 2022 has come along and we are beginning to see inflationary effects rising for the first time in decades as a result of all that stimulus. Could that weaken the U.S. dollar going forward? Well, so far it hasn’t, but it certainly might.

If history shows us anything it’s that even though a country like the U.S. (with the world’s reserve currency) can get away with printing money to solve its economic woes better than other countries that don’t enjoy the luxury of a reserve currency, sooner or later the rooster has to come home to roost.

In order to tame the beast unleashed by washing away its problems with newly-minted greenbacks, the government will ultimately have to put on the brakes to avoid run-away inflation. That could in-turn put downward pressure on the portfolios of my would-be Costa Rica buyers and cause them to rethink their expat plans.

What Will be the Ongoing Effect of U.S. Internal Political Strife?

I just finished Ray Dalio’s new book, Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail. Dalio, who is widely regarded as one of the word’s greatest investors, says that the U.S. is at Stage 5 of the 6 stages a country passes through before it succumbs to outright civil war. Dalio says this is so due to the unprecedented internal political strife that currently exists and only seems to be worsening.

There are some things in 2022 that could happen to accelerate this worrisome trend…

First, there’s the 2022 mid-terms. With Joe Biden’s popularity steadily sinking, mainly due to the never-ending pandemic, together with rising inflation, there is a good chance that the Republicans will take control of Congress in 2022. And if they don’t, you can bet your bottom dollar cries of “election-stealing” will be blamed for the debacle.

If the Republicans do take control it might calm those claims and fears, but it will also hamper Joe Biden’s ability to do anything about the economy and only insure 2 more years of absolute grid-lock in Washington.

The other question looming in 2022 is the specter of Donald Trump actually getting locked up due to the revelations of the Jan 6 commission, or any of the other scandals he is enmeshed in.

While I am not going to make predictions with regard to either of the above, I will say that all this makes the prospect for continued (and growing) internal political strife even more of a threat to America’s societal well-being, as well as its place as a bastion of democracy.

In my previous post I noted that the political strife was one reason so many people were wanting to move to Costa Rica. And if the U.S. inches closer towards an actual “shooting” civil war, I would think that would continue to be the case.

Will COVID-19 Finally Dissipate as a World-Wide Threat?

The advent of the Omicron variant might signal that the virus is mutating itself into nothing more than a routine common cold. And with the vaccines and other meds that have been introduced to help with the more vulnerable elements of the population, it might be that the world is finally poised to escape from this ugly situation, or at least there’s light at the end of the tunnel.

However, since COVID seemed to be such a factor in stimulating demand in the Costa Rica real estate market in 2020 and 2021, could an end to the pandemic have the opposite effect?

That’s a damn good rhetorical question that I really don’t have an answer to. However, I can say that the pandemic unleashed some genies that will probably be hard to put back into the bottle, like the increased desire to work from home, even in a home located in a foreign country!

Will Costa Rica Be OK?

Costa Rica continues to struggle with an ongoing fiscal deficit problem. The pandemic has certainly made things worse and in 2020 it basically decimated the very important tourism sector…

However, it seems that “things” are being managed. COVID-19 has hit Costa Rica hard, but vaccination rates are high and hospitalization rates appear to be under control. People are now visiting again, both for tourism and to explore the idea of actually moving to Costa Rica. So, the tourism industry seems to be on the verge of a comeback. And all those dollars of foreign investment in 2021 couldn’t have hurt. The government also appears willing to make legal changes that will encourage even more wanna-be expats to make Costa Rica home.

Yes, I think Costa Rica is going to be OK – gracias a dios – barring that the rest of the world (especially that part to our north) doesn’t completely go to hell!

Having said all of the above, I predict that the market will again be strong in 2022…

What will happen beyond that is much harder to predict due to the noted “dark clouds” that continue to loom on the horizon.

10 Things Newbie Costa Rica Expats Worry Too Much About

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Newbie Costa Rica Expats Worry

Moving your life to a foreign country can be a harrowing endeavor. And that’s especially the case for acute worry-warts!

Here’s a post on 10 things newbie Costa Rica expats worry about designed to help those who tend to get too anxious about all the “little” things that could go wrong…

1. Theft

Yes, there’s theft in Costa Rica. It’s even more common in locations where tourism is the main economic driver. However, is it something to “worry” about? In short, no. Now one should take precautions. Most thefts in Costa Rica are crimes of opportunity. So, give them less of it, duh! How? Well, use your common sense and I’m sure you can come up with something.

2. Septic Tanks

I wish I had a dollar for every time a gringo asked me a load of questions about the damn septic tank. Yes, virtually all homes in Costa Rica have them. I’m not going to go into the details. After all, I’m no expert when it comes to shit disposal. However, I do know that those of us who’ve lived here a while spend about zero amount of time worrying about our septic tanks!

3. Weather

This is something you should pay attention to when making your initial decision about where to settle in Costa Rica. However, once you’ve made that decision, it’s time to stop worrying about it! And if you find that the weather where you are doesn’t suit you, well then, move. Many end up doing just that, at least once.

4. Language

The official language of Costa Rica is Spanish. Your best approach is to try learning a little of it. No, you don’t need to be “fluent” and probably never will be. But at least you can be mildly conversational. Your life will go easier and be more enjoyable if you can carry on a conversation with a tico, especially one you need to do some business with. Having said that, many expats never learn more than a few words. Even so, they get along just fine. So, don’t worry about it!

5. Cost of Living

This is perhaps the hottest topic on most Costa Rica expat related Facebook groups. There you will find a billion opinions on the subject. I myself have written about it. Bottom line, the cost of living in Costa Rica is NOT as high or higher than the U.S., or Canada, or Europe. However, the cost of certain items is higher! The two concepts should not be conflated, as they often are. Just because an Iphone, or a jar of Hellman’s Mayonnaise, costs more in Costa Rica doesn’t automatically mean the overall cost of living is higher. Like I’ve said before, if you can’t get by in Costa Rica for less money than it costs to live in the U.S., you’re doing something wrong.

6. Boredom

I hate the very word, always have. It boggles my mind that anyone could be bored in a country so filled with diversity…of people, plants, animals and landscapes, as well as things to do amongst them. If you begin to feel a little bored, just open your eyes, or get them off of yourself, and look around you! No one should ever be “bored” in Costa Rica, by god.

7. Banking

Costa Rican national banks suck, for the most part. But no reason to worry about it. It’s just one of those flows of life you have to go with. Here’s a little tip: the best bank for expats is BCT, hands down!

8. Medical Issues

Costa Rica has great medical care, but not necessarily everywhere. If you are someone moving here with medical issues, you should take that into account. You can’t expect to live in some remote jungle area and expect to find a hospital of the quality of CIMA close by. Also, Costa Rica has “socialized” medical care. For those of you who tend to swing to the right politically, that might be offensive to you. That is, until you need a trip to the nearest emergency room!

9. Cultural Issues

One could write a book about the cultural differences between Costa Rica and the U.S. of A. Suffice it to say that life down here moves at a much slower pace. For some that might be disconcerting. For others, quite pleasurable. But it’s just the way it is and no amount of worrying will ever change it. In fact, the more you worry about those cultural differences, the more they will provide legitimate reasons to actually worry! It’s a paradox here that the successful expats learn to live with and respect.

10. Was It a Bad Decision?

All of the above topics of constant gringo worry can give rise to that nagging question that lingers in your subconscious…did I make the biggest mistake of my life by moving here?

Yes, you very well might have. However, worrying about it incessantly could end up becoming a self-fulfilled prophecy.

10.5 Politics Back Home

More and more expats are moving to get away from political strife back home. And then all they want to do once here is…take a wild guess…bitch and moan about politics back home. That threatens to turn the place they moved to into the one they moved from. So, please don’t do that! There’s nothing wrong with being concerned and paying attention, but constantly worrying about it is not necessary nor conducive to the “pura vida” life you and others similarly situated are seeking.

Honorable Mention: Critters

Costa Rica has them in abundance. Some are best avoided. However, the degree of diversity, in flora AND fauna (which probably includes some creepy crawlers you wish it didn’t), is something to be marveled at, not worried over!

As for me, my decision to move to Costa Rica, made some 20 years ago, has probably been the best one I’ve ever made. It has certainly changed the course of my life. Over those years I have admittedly spent an undue amount of time worrying about many of the things on the above list…

And I’ve learned, the hard way, that none of it is worth worrying about…

That might be the lesson that has allowed me to make it through two decades, “relatively” unscathed…

Pura Vida!

Costa Rica Cost of Living – The Real Skinny

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Costa Rica Cost of Living

I read so much yada yada on the Costa Rica cost of living that I thought I outta chime in…

For a bit of background: I’ve lived here for over two decades. I was a permanent resident for the majority of that time and as of last year, a naturalized citizen. I was born in the U.S. and lived the first two-thirds of my life in the Carolinas, where I practiced law, among other things.

I operated a tourism business in Costa Rica for many years, before joining the Coldwell Banker real estate team in Dominical about 10 years ago. While I’ve made a decent income, by Costa Rica’s standards, during my many years here, I’ve never lived high on the hog. For reasons that I won’t go into, I’ve always chosen to live a relatively meager middle class tico style of life.

I lived my first decade in the Central Valley, in various locations. For the last ten, I’ve lived in Perez Zeledon. I’ve always preferred to live in places that are not dominated by tourism. I’ve been married to a tica (Colombian-borne and Costa Rica naturalized) for the last 14 years. I guess I’ve chosen my lifestyle for two reasons: first, because it’s the one I’ve best been able to afford and second, because it’s the one my wife and I have been most comfortable with.

Now, with all that said, what’s my opinion on the Costa Rica cost of living…

Well, I can only compare it to what I’ve experienced in the past in the U.S., as well as that of Colombia, since my wife and I spend a lot of time in the latter country…

There is no way the Costa Rica cost of living “needs to be” anywhere near as high as in the U.S. Now I know there are many who will read that and vehemently object. The first thing I would ask these detractors is WHERE and HOW do they live? Because I’d venture a bet it’s in a tourist dominated economy. Expats tend to gravitate towards those for a number of reasons…

For one, it’s probably all they know about Costa Rica, having visited here as a tourist initially and then liked the experience enough to try calling the place home. They also like the variety of entertainment options in tourist environments, which usually features an ocean! Lastly, they like being around others like them, who have made that similar choice…

And all that makes perfectly good sense…

However, those tourist environs are not what I would consider real world Costa Rica…

For example, I live in Perez Zeledon. Specifically, I live about 45 minutes from the beach in Dominical, which is definitely one of those touristy places. I chose this area because it offers a comfortable and high quality tico style of life, while being close enough to the beach that I can go when I want. And the cost of living up here versus down at the beach is dramatically different.

Yes, you can spend as much living in Costa Rica that you would in the U.S. But you have to try pretty hard to do so and really not pay much attention to your buying and consuming habits.

I know many expats who live in areas like Perez Zeledon who get by somewhere in the range of $1,000 to $2,000 per month. I myself, with a pretty healthy car payment, spend about $3,500 per month. And I consider my standard of living to be, well, quite comfortable!

Try getting by in the U.S. on that kind of money!

Now, compared to Colombia and probably other Latin American countries, Costa Rica is quite expensive. I know that in Colombia I could probably get by with the same standard of living perhaps closer to 1/2 of what I spend in Costa Rica…

So, why do I stay in Costa Rica, you ask?

Well, my reasons for being in Costa Rica extend well beyond the economic. However, economically speaking, I don’t know how I would make anywhere near the amount of money in Colombia as I do in Costa Rica, unless, possibly, if I resorted to illegal activities!

Bottom line, the Costa Rica cost of living can be quite high, at least compared to other Latin American living options. However, it doesn’t have to be that much higher. It just depends on where you choose to live and how you choose to consume and spend.

And there are so many reasons to choose Costa Rica that extend beyond the economic. In fact, if you choose to live like and amongst the ticos, you will enjoy the double benefit of rubbing elbows with some of the most gentle and humble (not to mention the downright nicest) people on the planet AND your Costa Rica cost of living will probably be a lot less!

At any rate, if you’re down here complaining about how the Costa Rica cost of living is as high, or higher, than in the U.S., then you just ain’t doing it right!

There seems to be a wave of “reverse immigration” these days, with expats flooding to Costa Rica to try the pura vida style of life. Like I mentioned above, most of them are settling in the tourist dominated locales, like Tamarindo, Jaco, Manuel Antonio, Dominical, Uvita, Ojochal, etc., etc. The already high prices will probably rise even more in those places and for this reason I will continue to read complaints about how Costa Rica is unaffordable…

For those folks, I guess it just might be…

What’s Behind the Costa Rica Real Estate Boom?

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Costa Rica Real Estate Boom

The real estate market in Costa Rica, pretty much everywhere you look, is booming!

This is no joke. If you’re thinking of jumping in, it will not pay to wait…

The market in many areas, especially those beachy and touristy ones, has already flipped from a buyer’s to a seller’s market. Demand is beginning to outstrip supply…

And economics 101 teaches us that when that happens, prices will go up…

and they are!

They’re certainly NOT going down.

However, I’m really not writing this post to convince doubters of the current Costa Rica real estate boom, but, rather, to convince myself as to the reasons why…

Because, I really don’t know. I can, however, take a few guesses. So here goes…

Reason #1: COVID-19 (indirectly)

When the pandemic first broke out back in March of 2020, none of us realtors knew what to expect. Costa Rica quickly closed its borders, by air, sea and land. The logical reaction to that move was, oh shit, 2008 all over again, probably worse…

And things were slow for a while. Then around June or July, it began to pick up and gain steam and by the turn of the year, the Costa Rica real estate boom was in full force!

Why would there be Costa Rica real estate boom in the midst of a worldwide pandemic?

Well, I don’t think you can pin the Costa Rica real estate boom directly on the virus, since that little bugger doesn’t really care one way or another. But it did put in motion, or serve as the catalyst, or spark, for a number of societal changes that have made people more willing to move. And for some of them that means to move all the way out of one’s country of birth to new and potentially more exciting environs.

And of course there’s also the phenomenon of folks moving from big cities to more rural areas, which has ignited a boom in U.S. and Canadian real estate markets. And for some of those more adventurous types, the tropical jungles, beaches and verdant mountains of Costa Rica represent a very enticing “rural” area to move to!

This COVID-19 inspired real estate boom in the U.S. and Canada is providing buyers with the cash to make their expat move to Costa Rica!

Reason #2: Career Mobility

Perhaps the most salient of these societal changes, for purposes of explaining the Costa Rica real estate boom, is that of folks being able and willing to work remotely.

The virus has all but put an end to that time-worn daily commute to some steel, concrete and glass bunker that housed a workforce, who would slave away every day elbow to elbow, or cubicle to cubicle.

Nope, these days working from home, with the help of an internet connection, is more the norm.

And as folks discovered this new way of working, a light bulb appeared over many noggins, which harbored the thought, hey, do I really have to stay in this tired old boring place? Perhaps I could move and work in another, more exciting and exotic, locale, like, say, Costa Rica, even!

We have historically seen most of the expats moving to Costa Rica be in or around retirement age. Those folks didn’t really need to earn an income in Costa Rica…

And we still have those types coming. In fact, for reasons that follow, they are coming in increasing numbers, as well…

But now there’s added to the mix, a younger crowd who are coming here to live and work, albeit remotely, often for some enterprise back home.

And, since Costa Rica only taxes income earned within its borders, there really is no “tax impediment” to making this career move!

That has expanded the demographic scope of our market and is helping to ignite the Costa Rica real estate boom.

Reason 3: Political Turmoil

The 2020 U.S. presidential election was definitely one that will live in infamy. And the fact that it took place during the peak of a global pandemic just made it all the more, well, infamous.

Well, now it’s over, despite the fact that the loser and many of his followers remain convinced that it’s not. The aftermath of that political storm, which culminated in the January 6 U.S. capitol insurrection, remains as tumultuous as ever.

Even though the left can claim ultimate victory, there are still many of the liberal-leaning who have just had enough of it. And some of those are headed to Costa Rica, where they believe life might be a little less imbued with constant political conflict.

And of course many on the right are also moving to Costa Rica in order to escape the dawning of socialism in “America.”

So, no matter which end of the political spectrum a person might lie, that person has probably considered becoming an expat…

And Costa Rica seems definitely to be one of the top choices for making one’s escape from the coming apocalypse.

Reason #4: Other Areas of Social and Cultural Unrest

It seems these days you can’t turn on the television or scroll through your newsfeed without becoming alarmed at the shape our world is in. There’s a whole lot of bad crap going on out there, no doubt about it…

Is Costa Rica any better?

Well, it ain’t perfect, but actually yea, I would say that it probably is better in many ways.

We don’t have much in the way of political conflict down here. Oh for sure there’s an occasional eruption, like what happened last year in response to the fiscal reforms flowing from a sizable IMF loan that the Alvarado administration was seeking. Usually political unrest in Costa Rica takes the form of road blockages, normally non-violent. Those will go on for a few days, or maybe a week, and then they peter out…

At least that’s been my experience over the last 20 years.

We also don’t have gun violence like that which plagues my birth country. I have never heard of a mass shooting in Costa Rica. Again, at least not over the 20 years that I’ve lived here.

We don’t really have a racial problem here. Now, I’m not saying that prejudice doesn’t exist in Costa Rica. It certainly does.

But by and large people keep those views private. And you really don’t see such a glaring public disparity in the way folks of various races are treated down here.

Likewise, you don’t see such a cultural uproar about things like homosexual rights, gender neutrality, and other hot buttons that seem to have folks at each other’s throats in the U.S. and even Canada, to a lesser extent.

Here we like to say “Pura Vida“, which means many things, but one of those is a willingness to live and let live. We just don’t make a habit of getting into other people’s business down here.

This is all probably a gross oversimplification of what is going on…

But it seems to me that the above represents a pretty cogent summation of what’s driving so many “Northerners” to consider Costa Rica as their new home.

Let’s just hope that the influx doesn’t cause Costa Rica to begin exhibiting many of the traits those folks are fleeing!

P.S. Of course it’s also possible that COVID-19 did nothing more than accelerate trends that were already in motion before the world ever caught wind of the bug. Nevertheless, it is sort of fun speculating…

What Does it Mean to be a Costa Rica Expat?

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What Does it Mean to be a Costa Rica Expat?

I’ve been an expat in Costa Rica for a long time now, 20 years almost!

From a purely physical perspective being an expat means absence from one’s home country and long-term presence in some foreign country.

However, to be an expat has more than just physical connotations…

What does it mean to be a Costa Rica expat?

Well, let’s first discuss what it doesn’t mean…

To be an expat does not mean one is unpatriotic in any way. Some may feel that it does, but they’d be dead wrong. Of course, some folks may become expats out of a sense of betrayal by their home countries and therefore develop a desire to escape…

In short, there’s a myriad of motives for becoming an expat!

Personally, I feel that I’ve grown more patriotic as a result of living out of my birth country for so many years now. I believe that in large part stems from my being an observer, or someone on the outside looking in. I’ve been able to observe with a heightened sense of objectivity certain things about my country of birth that concern me deeply…

For example, I’ve been able to observe how U.S. interventionist or imperialistic polices have affected people negatively, especially latinos. I’ve been able to discern that if that has been the case in Latin America, perhaps our interventions in other areas of the world, such as the Middle East, have also been less than laudable.

I’ve been able to observe with a heightened sense of objectivity how the form of capitalism run amok that prevails in my country of birth has widened the inequality gap. It has also led to a reckless disregard for how the pursuit of money and material has taken a heavy toll on the well-being of people and planet. Sometimes those effects aren’t as readily apparent to those on the inside of a wealthy nation like the U.S. as they are to those in the so-called 3rd world, even expats like me, on the outside looking in.

These observations have not caused me to have contempt for my country, but rather to long for it to be the world leader for positive change that it historically has been.

The U.S. has in large part lost its way in that regard. And the entire world is suffering for it. The world needs the U.S. to lead in a positive direction, away from soaring income and wealth inequality, and away from dependence on fossil fuels. But at least for the last four years, the U.S. has steadfastly refused to lead at a time when the world has desperately needed its leadership.

To be an expat means to have one’s eyes opened to these realities…

To have the privilege to really see things from the perspective of others who are very different…

It provides ample opportunities to exercise the empathy muscle and to improve one’s capacity for altruism and impact…

I call that expat mindfulness.

To be an expat does not have to mean permanent physical removal from presence in one’s country of birth. The ability to go back is always an option and many do. Of course, one can be a part-time expat.

I believe time in a foreign country can truly heighten one’s ability to make an impact in one’s country of birth, even in the world at large. It sensitizes you to things you might otherwise be desensitized to. It heightens your sense of awareness…

In short, it can lead to a more open mind, which is an important tool for making an impact.

You might become a more well-rounded human being.

All those are very positive traits one can develop from undergoing the expat experience and increasing expat mindfulness.

I’ve written much in the past in my blogs and books about how being an expat in Costa Rica has changed me. It has made me a more humble and compassionate person. Granted, many of my former friends and family members back in the U.S. will say that it’s turned me into a left-wing loon!

Well, it has made me more progressive!

It has made me more inclusive.

It has allowed me to see the error of capitalism run amok in ways that I probably would’ve never detected without having had a very intense expat experience.

It has made me care more about my impact than about my economic self-interest.

It has allowed me to see things more from the perspective of the Big US than the small one.

It has removed many of the impact blinders that I came to Costa Rica wearing.

It has been responsible for implanting impact mindfulness as my current mindset and worldview.

In that sense, I guess it has turned me into what I like to call, a Revolutionary Misfit. However, I don’t view that transformation in any negative light.

If you’re thinking of taking the plunge and moving to a foreign country, perhaps motivated by recent political events, remember this…no matter where you go, you’ll still be an “American” by birth!

If you love your country it can actually make you love it more, albeit for different reasons. It will make you long for change and might even provide the motivation to be a catalyst for that change yourself.

To really immerse as an expat and thereby increase one’s expat mindfulness can actually be an intensely patriotic endeavor.

Where is the Best Place to Invest in Costa Rica?

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Best Place to Invest in Costa Rica

I’ll admit from the outset, that title is pure clickbait…

since there is no correct answer!

This is a continuation of posts I’ve been writing lately, largely motivated by questions and comments I see posted in various Costa Rica expat-oriented Facebook groups…

Other articles in the series (so far) are:

10 Tips for a Successful Costa Rica Exploratory Trip

Costa Rica Online Advice – Is Any of it Good?

Serious Advice on How to Move to Costa Rica

We North Americans always demand the “best”, right? We don’t settle for second, or third…we want to know, where is the BEST place to invest in Costa Rica…

nothing more, nothing less.

Well, I’m sad to tell you (again) that there is no right answer to the question, unfortunately.

That’s because what’s “best” is highly subjective. That is, what’s best for you, may not be what’s best for me.

One way to break it down is along the lines of investment motive…

Are you actually an investor, who’s looking more for return (income and/or appreciation) than chasing a lifestyle dream?

Well then, you’d better look to invest in a place and property that maximizes that possibility. If you lack patience, and want to make a quick cash return, well then, you’d better look to invest in a place and property that is in high demand, i.e., where there is more demand than supply.

However, if you do have patience and can wait, perhaps forever, to make your big hit, well then, you could and should look for a place where growth potential is good, but prices are still somewhat low, i.e., a place where supply perhaps outstrips demand, at least for the short to medium term.

That is all just basic economics, which you probably know more about than me.

How about the lifestyle “investor”, the wannabe expat who’s looking for his or her personal paradise, with return being inconsequential, or, at least, not of primary importance?

Then things get a bit murkier and certainly even more subjective.

I wrote an article long ago, entitled The 4 C’s of Costa Rica Expat Living to perhaps provide a helpful framework for Costa Rica lifestyle investment decision-making…

In this post I wanted to go a step beyond and really try to broadly categorize lifestyle choices for the aspiring expat, in an attempt at making them more easy to get your mind around.

On the first level, I would break the country down into rural versus urban. Rural comes first because the vast bulk of the country is indeed, very rural. If you want urban you’re pretty much relegated to the central valley and its GAM, or gran area metropolitana, where half the population of the country resides. That is the only truly “urban” area of the country that offers anything near what city life back home offers.

True there are other secondary cities like Liberia, or San Isidro de El General, where I live. Nevertheless, these “cities” are really just small towns and people who live in them still find it necessary to make that trip to San Jose occasionally for big city stuff.

When I first came to Costa Rica I’d started a tourism company and felt the need to be in San Jose to be near the international airport there.

If you’re business-minded, like I was, there are probably going to be more opportunities in San Jose, since that’s were the bulk of the country’s population is most concentrated.

Of course, all that “concentration” is what a lot of folks are coming to Costa Rica to get away from!

In that case, you’d better cross off San Jose and the GAM as a potential place to be and look to the rest of the country…the rural part…

Of which I can break down for you into two very basic parts…mountains and beaches.

I could go another level of breakdown into touristic and local, but truth is most touristic locations are indeed beach ones, with a few exceptions (La Fortuna and Monteverde come to mind).

If you are a beach person then you’re probably going to be focused on one or more of Costa Rica’s tourism hot spots, like Tamarindo, Manuel Antonio, Dominical, or, over on the Caribbean side, Puerto Viejo. There are many others.

I grew up in Myrtle Beach in a highly touristic environment. I don’t want to live in one of those anymore, ever again. That’s why I live in Perez Zeledon…that’s mountains and fairly rural (even though we do have a nice “secondary” city in San Isidro).

Touristic beach locales are hot, crowded for some parts of the year, and more expensive. And then there’s the phenomenon of people behaving differently (in a negative way) while on vacation. Of course, there are some expats who move to one of the touristic locales in order to be on “permanent vacation.” Those are the ones who often go home after a few years, since there are no cushy rehab centers in Costa Rica.

Of course, you could be a surfer dude and in that case, yea, I can see how the beach would work best for you. I used to be one of those, but at 60, I don’t feel the need or desire to hit the waves as often as I once did.

Costa Rica has tons of great mountain locations. I live in one, Perez Zeledon. There’s also quite a few within an hour or so from San Jose. These places have small towns, wide open spaces, fresh clean mountain air and locals who tend to abide by a higher moral code, generally (yes, there are always exceptions).

If you are budget minded, then you might want to opt for mountain and rural, since city and/or beach (touristic) are going to be the places with a higher cost of living.

All of the above is a long way of saying there is no right answer to the question, where is the best place to invest in Costa Rica?

The answer is going to depend on your unique idiosyncrasies and proclivities. The Facebook group you’ve been perusing will of course offer a whole slew of anecdotal opinions as to why X, Y or Z is indeed the best…

Just remember, that whether or not a specific place is best for YOU, is a decision only YOU can make…

And you might have to suffer being wrong a few times before truly finding the answer that works!

Costa Rica Online Advice – Is Any of it Good?

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Costa Rica Online Advice

I recently saw a Facebook post that was a rant concerning the many “neophyte” expats out there offering Costa Rica online advice via social network blogging and vlogging. The post was written by Chris Howard, a guy who’s been running group relocation tours since the beginning of time…

When it comes to Costa Rica relocation, Chris definitely knows what he’s talking about. But is he right about the neophytes?

Well, the way I see it is that most of those bloggers and vloggers are simply offering opinions based on their own anecdotal experiences. Things can get off track when they try to pass those opinions to you as “general rules” about how things really work down here. Even worse, they might be pushing something and coloring their experiences in a way that helps them sell you. Of course, they could be offering complete bullshit as well…hard to really tell?

Nevertheless, the more Costa Rica online advice that’s out there the better, I guess? And some of it, even though it might not be all that informative, is at least entertaining! However, some of it can also be mis-informative, which I guess is what Chris is so irate about.

Granted, I myself am one of those bloggers (not nearly cute enough to be a vlogger) offering you Costa Rica online advice. I do generally try to let my readers know that I’m coming at this from the standpoint of a realtor in the Southern Pacific. Of course, I’d like to see you head my direction and use my services! So, when you read my stuff, keep that in mind. It is true that the Southern Pacific of Costa Rica might not float every boat. That’s a bit hard for me to believe, actually, but I guess it’s true.

So, what’s a poor wannabe expat to do with all the information and potential disinformation out there?

Well, take it all in, but with that proverbial grain of salt. Then get your ass down here and check things out for yourself. Don’t rely on the experiences of anyone else to completely inform you about what might be best for you.

Also, in your research, make sure to mix up your consumption of opinion with that of fact. And that goes for Costa Rica online advice, as well as just about everything else you might want to know more about…

In other words, don’t simply watch your favorite vlogger, simply because you think he or she is “cute” and thereby convince yourself that you’ve found the holy grail of information about all things Costa Rica…

Also go to solid sources of factual “news” reporting…

Yes, Scarlett, even in this day and age, there are such things as “facts.”

In that light I have always relied on the Tico Times for Costa Rica news in the English language. That particular source is the oldest of its kind in the country and for all intents and purposes, pretty damn reliable.

You can also practice your Spanish by trying to read the newspaper of major circulation in the country, La Nación (Costa Rica). They have a pretty good online edition that costs about 25 cents per month. I added the parenthetical because there are many major papers in various Latin American countries also known as “la nación.”

Again, if you speak Spanish, or at least know how to be handy with Google Translate, you can usually verify things people opine about by going to the source. For instance, if someone says something about the immigration process that you think could be true, but you’re just not sure, you could always actually go to the Costa Rican immigration website and see what you can find out there. Their site actually sort of sucks, but nevertheless I believe you can catch my drift here.

FYI, another good (perhaps better) source of information about immigration issues is the Outlier Legal site and blog.

I would be particularly careful about Costa Rica online advice on things like culture, which is very open to subjective interpretation…

If someone is trying to tell you about how ticos behave, then I would agree with Chris Howard that whoever is giving that advice better have spent quite a few years learning and actually experiencing firsthand how ticos behave. Sometimes ticos behave differently towards folks that assume negative things about them! And we have a lot of expats moving down here these days who might be bringing certain assumptions about latinos that could color their interpretation of Costa Rican culture in a negative light.

For sure there are many things cultural that are vastly different here than what you’re accustomed to back home. The only way to discover all that is to live here a good while. Those differences might send you packing after a few years. That’s just a risk you’re going to have to take to discover if Costa Rica is indeed right for you. I can tell you that trying to make that decision based on someone’s blog or vlog, ain’t going to work out for you that well.

Certainly you should do research and take advantage of all the Costa Rica online advice that’s out there. If Chris Howard’s post was trying to dissuade folks from doing that, then I disagree. However, the best way to research is to experience the place on the ground, getting up close and personal with it!

So, do your research, perhaps even get advice from people you feel confident know what they’re talking about, then buy the ticket, take the ride!

Come here and get down and dirty with us learning first hand what Costa Rica really is all about!

And always keep in mind that anyone out there offering you their opinion is likewise going to be offering you the biases that are built into that opinion…

I know I do. There I admitted it. Nevertheless, I do think from time to time that I might offer something here that could be useful to anyone who might honor me with their time and attention…

I would say the same probably goes with a lot of the bloggers and vloggers out there.

Speaking of opinions, my little eBook is full of them (as well as a few facts thrown in here and there)…

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