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What Really Makes Costa Rica Different?

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What Really Makes Costa Rica Different

Expats aren’t flocking to Costa Rica just for more of the same. Obviously, it’s the lure of something different and more exciting that attracts them…

And I’m not talking about the typical differences that come to mind, like weather, cost of living, food, language and general pace of life. All those differences, while appealing, are a bit routine and sort of, well, meh…

So, what is at the heart of this quest for the quixotic?

What really makes Costa Rica different?

I’ll kick off the search for an answer with a personal anecdote…

You know, in my 22 years of living in Costa Rica, I’ve never looked up into my rearview mirror only to be surprised by the site of flashing blue lights…

Well, one time my son and I were driving down some lonesome Costa Rica highway when Zack noticed a police car approaching from the rear with lights flashing. He looked at me and said, “dad, you better pull over!” I just ignored him. As the police car drew closer he became more adamant and I continued to ignore him until the police car went around us and on his merry way…

You see Costa Rica doesn’t have highway patrol cars that will dart out from behind some hiding place and chase down an unsuspecting driver, sometimes out of the mere suspicion that they “might be” doing something illegal…

That just doesn’t happen here.

So, what does all that have to do with the answer to the question posed?

In my opinion, there are two aspects of life in Cost Rica that really stand out to me as different:

First, there is a refreshing lack of what I would call “big brotherism.” 

Second, there is a sometimes startling difference in the way “risk” is perceived and handled, which sort of dovetails with the first point.

In the U.S.A., where I came from, there is this oppressive cloud that hangs over your daily life that I would ascribe to the watchful eye of big brother, or as we say down in South Carolina, the gubment.

Now, make no bones about it, Costa Rica has its own problems with the gubment. But those problems are different. One can to a large extent avoid interaction with the government down here. When those interactions do take place, they admittedly can be painful, as anything to do with government in Costa Rica will end in frustration from the mind-boggling degree of bureaucratic ineptitude.

But you don’t feel like your every move is under its watchful eye. In the U.S. you generally do, mostly because you generally are.

And why is that, or why does that have to be the case?

Well, that brings me to the second related point…

In the U.S., we try our best to eliminate all forms of risk in everyday life. And as soon as something bad happens that we weren’t expecting, well the good old government rushes in with new laws and regulations to eliminate the risk of that too ever happening again.

After all, once a risk is known to exist, there are multitudes of lawyers salivating at the chance of being able to sue if anyone disregards the risk to the detriment of any potential plaintiff.

Things just don’t operate like that down here in Costa Rica.

It is sometimes amazing to see the level of lack of risk aversion that the ticos exhibit in their daily lives. Do bad things happen to them as a result? Oh, for sure they do. 

And what is the government’s response? Well, mainly just clean up the mess and move on. Tico culture is not one that generally rushes to group activism in order to stimulate new laws that eliminate the possibility of similar accidents ever recurring.

And there is no personal injury bar in Costa Rica, whatsoever.

People take risks and sometimes get hurt. They mend up and go on, often doing the same things that got them hurt to begin with.

I guess the bottom line is that this attitude towards risk aversion leads to less government oversight of our daily lives down here – less big brotherism.

And, at least for me, I really sort of like that. And I would venture a guess that most expats who’ve been here for a while do as well.

Now, granted, these days we’re undergoing a migratory invasion of newly minted expats who probably haven’t caught on to these more subtle differences yet and certainly haven’t learned to appreciate them. They’re still stuck trying to get used to the more in your face food, language and pace of life variety of obvious differences.

And many of the new ones are bringing American style risk aversion with them as they gather in gringo enclaves that try to replicate a more American style of life.

I really like being able to have a couple beers in a bar, get behind the wheel of my car (with my senses completely intact) and drive my own ass home without worrying about my life being completely upended by some cop trying to meet his monthly DUI quota.

I’m sure there are some who might read that and be aghast at my irresponsibility! Hopefully, those readers end up deciding against the move to Costa Rica.

We old timer expats relish in our ability to stay off the radar screen of big brother and just live our lives in quiet passionate obscurity.

Not that I want this post to be painted political, but there is one area that flies in the face of what I’m stating in terms of risk aversion and big brotherism. And that is the attitude towards gun ownership. That is one case where things are a bit bassackwards, with the U.S. exhibiting more of stunning lack of risk aversion. 

Costa Rica is not a gun culture and I thank the lord for that difference as well. That’s one risk we don’t generally run down here, i.e., the risk of getting shot up at a shopping mall.

You’re more likely to meet your end from the the sharp point of a terciopelo fang that the long end of an assault rifle.

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 – Where to Invest? – 7 Province Rundown

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Costa Rica Real Estate - Where to Invest?

With the Costa Rica real estate market continuing to boom in 2022, more and more wannabe expats are faced with that most important question of where to invest…

Here’s a broad overview of Costa Rica’s 7 provinces that might help…

San Jose

The province of San Jose is smack-dab in the center of the country, in the so-called “central valley.” It is where the capital is located, as well as Costa Rica’s oldest and largest international airport.

It is the seat of big business in Costa Rica. However, as a tourist attraction, it is lacking in many respects. Most tourists tend to want to spend as little time as possible in the big city.

It is actually the central part of the Gran Area Metropolitana (or GAM) where half the population of the entire country resides.

Even though tourists tend to want to skip San Jose, to the extent possible, many expats do call it home. After all, San Jose does have the largest and most cosmopolitan selection in terms of shopping, medical care, restaurants, nightlife, and services.

So, if you really want to be where the big city action is, San Jose could be the place for you.

However, the big city is not the whole story of San Jose, since it also encompasses a broad swath of the towering Talamanca mountain range (highest in the country) and the canton nearest and dearest to my heart of Perez Zeledon.

Perez Zeledon is home to Costa Rica’s highest peak, Chirripo, and the largest city outside of the GAM, San Isidro de El General. It’s a place where one can have his or her cake and eat it too, by living in high altitude coolness, while being an hour or less from the gorgeous Costa Ballena coastline. That’s why I moved here around 12 years ago.

Heredia

Heredia is the province immediately to San Jose’s north. Its principle city of the same name makes up part of the GAM.

Reasons to live there are similar to what was said above with respect to San Jose. However, there are some urban, yet more rural, communities like San Rafael and Santo Domingo that are quite nice and a bit away from the hustle and bustle, yet close enough for you to be able to engage in it on a moment’s notice.

Alajuela

This is the province that makes up the northwest quadrant of the GAM and it’s where the Juan Santamaria International airport is located.

However, it also includes areas to the north like the canton of San Carlos, with the popular tourist town of La Fortuna and the ever-looming Arenal Volcano.

The La Fortuna/Arenal area is also one that is popular with expats. It is covered in lush green tropical rain forest and it is where the country’s largest lake, Lake Arenal, is located. Lake Arenal is a man-made lake and damn that supplies hydro-electric power to a large portion of the country.

Since tourism is always a primary factor in the real estate market and Arenal is one of Costa Rica’s biggest tourism draws, the La Fortuna/Arenal area of Alajuela has seen some real estate action, albeit not to the extent of many of the beach areas.

Cartago

Cartago is the eastern quadrant of the GAM and includes the highlands of its principle city, also named Cartago, as well as Caribbean slope zones, like the beautiful area of Turrialba.

I’ve always thought that Cartago was a beautiful province and even considered moving there before I fled the big city and moved to Perez Zeledon.

Cartago is home to Costa Rica’s tallest (and active) volcanos, Irazu and Turrialba, the latter of which has in recent years been Costa Rica’s “most active” volcano.

The area I used to always enjoy visiting when I lived in the San Jose area for my first 10 years, is the Orosi Valley. This is a gorgeously green high altitude region where quite a few expats call home.

Puntarenas

This is the province that encompasses a large portion of the Pacific coastline, from the southern tip of the Nicoya Peninsula all the way down to Panama.

There are so many areas of Puntarenas that we could talk about in terms of both tourism and real estate. However, many expats confuse the port city of Puntarenas with the entire province by the same name. The port city of Puntarenas is the capital of the province, but it’s really not a popular city for expats to live in.

The most popular tourism and expat areas of Puntarenas, include the following…

  • Nicoya Peninsula Beaches (Santa Teresa, Mal Pais, Montezuma)
  • Jaco
  • Quepos/Manuel Antonio
  • The Costa Ballena Beaches (Dominical, Uvita and Ojochal)
  • The Osa Peninsula

As you can see, there is a lot to choose from with Puntarenas and all of the areas I just listed have long been major tourism draws and now are major areas of expat real estate interest.

The real estate market has been extremely active in all of these areas.

Guanacaste

The is the northwestern province that includes the northern Pacific coast all the way to Nicaragua. In fact, at one time most of this province was part of Nicaragua.

Guanacaste includes the “Gold Coast” beach areas of Tamarindo, Flamingo and Coco (and many others) that came to fame in the early to mid-2000’s. The market overheated and completely crashed around 2007.

However, these days it has come roaring back. Perhaps the hottest and priciest market in the country these days is the Nicoya Peninsula hip surfer beach town of Nosara.

Guanacaste has many beautiful beach areas to choose from. However, also keep in mind that it is the hottest and driest province of Costa Rica.

So, if you’re an expat looking for a cool micro-climate and year-round lush greenery, Guanacaste probably won’t do it for you.

Limon

Like Puntarenas on the Pacific, the province of Limon hugs and encompasses the entire Caribbean coast. Most of the areas to the north of the port city and capital of Limon are inaccessible and fairly uninhabitable.

However, to the south of the port city you’ll find some of Costa Rica’s most beautiful beach areas. I’m talking about the beaches of Cahuita, Puerto Viejo and many others. These areas are somewhat remote and they encompass a lot of protected zones and indigenous reserves. Therefore, the ability to invest there and have full title to your property could be an issue.

I’ve always thought of Limon as a great place to visit, but not the best area of the country to safely invest in. However, like always, a safe investment can be secured by adequate due diligence and I am sure that can be accomplished in Limon if you’re an expat in love with that area.

I hope this brief overview of the 7 provinces will be of some assistance in helping you decide where to invest and make Costa Rica your home.

Why Do You Want to Move to Costa Rica?

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Why Do You Want to Move to Costa Rica?

I came here 21 years ago for one simple reason, to make money. I didn’t even know Costa Rica existed until I was hired to broker a fairly large business deal here…

But I stayed for completely different reasons.

These days everyone seems to want to move here. The country is experiencing a wave of immigration from the U.S., Canada, and Europe.

Donald Trump might call it an invasion. Tucker Carlson might call it “brown replacement” (as in replacing the browns with the whites).

However, there are no “caravans” amassing at our borders. The folks moving here are flying in, often first class. And they’re buying up everything in sight, especially in places where they might’ve vacationed before.

By the way, just as an aside, Costa Rica has much more to offer than simply the place where you might’ve spent a week or two on vacation. If you’re the adventurous type, I’d encourage you to get out and see more of it. I assure you that you’ll be amazed!

But what are the real motivations for all these folks wanting to move here?

Why has Costa Rica become so popular as a place for expats to call home, at least for a year or two?

You probably know that I’m a realtor here. So, you might be asking yourself, why should he care? After all, the real estate market is booming as a result of this “invasion.”

Shouldn’t I be happy about it?

Well, I am to a point…

I’m the type that questions everything. And, frankly, I’m a little concerned at what I see happening to my adopted country.

From my perspective as a realtor dealing with different types of clients with different modes of motivation, it seems that most can be broken down, or generalized, into two categories…

  1. Those who want to adapt to a new culture and way of life that they imagine might be better, for a number of reasons personal to them;
  2. And those who just think Costa Rica is sorta cheap (at least compared to back home) and really pretty, so they’d like to live here, but couldn’t give a rat’s behind about things like “immersion.” After all, they’re from a superior culture (at least in their own minds), so why should they adapt to or adopt an inferior one?

It’s those of the second variety that are a cause of concern for me.

As I said at the outset, I first arrived to Costa Rica on a business deal. That was my motivation, pure and simple. However, something happened over those initial formative years that changed me, drastically.

The ticos taught me a simple, but important, truth. That you can be happier living a less materialistic and much slower pace of life…

We describe that style of life as being Pura Vida (translated, pure life).

I deal with a lot of clients that are motivated to immerse. Those will likely learn the same lesson that I did many years ago. It’ll probably take them a while, but I believe eventually they’ll catch on to it…

And the country will likely be better off welcoming those into its folds.

The others, the ones that will attempt to impose their “American” mode of dealing with life on an often unwilling tico populace, well, they might experience some frustration…

Or, they just might be successful…

And in some areas of the country where the immigration wave is the strongest, they seem to be succeeding.

And that’s what concerns me!

Of course, there are certain segments of the tico population that will gain from gringos spending bookoo bucks moving here. Especially those directly or peripherally involved in the real estate market, for instance…

However, that is a very small percentage of the total population. So, don’t regale me with anecdotes about how your tico lawyer, or tico builder, or tico realtor seems to be doing just fine.

The problem with all this immigration is that there is a tipping point that can be reached. One where the locals have just about had enough.

Signs of that can come in the form of culture clashes that might appear in the way of petty thefts, or worse, more violent types of crime.

Take an area like Nosara, where prices have been driven up so much that ticos can’t even afford to live there anymore.

My own Costa Ballena is unfortunately on the verge of being another example. Or, at least, I fear it might be.

Ticos are by and large a peaceful people. But even peace-loving folks can react less than peaceful when their backs are driven against the wall.

The title of this post poses the simple question, why do YOU want to move to Costa Rica?

I guess what I’d like this post to do is encourage you to question your own motives for moving here, if that’s what you’re indeed contemplating.

I would hope that once you do that, you’ll fall more in the immersion category than the one where Costa Rica simply seems like a pretty place to spend your money.

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…

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