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

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

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

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

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

wait a minute…drum roll….

Buying in the wrong damn location!

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

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

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

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

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

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

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

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

Catch my drift?

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

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

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