So you’re planning on buying into Costa Rican paradise: 7 things to consider
You will naturally be vetting your options exhaustively and trundling your way diligently up a steep learning curve. Here in paradise you will need to familiarize yourself with issues of Costa Rican titles, maritime law, costs of building, property taxes, permit jurisdictions, dependability of water supply, sustainable development, contracting culture, perhaps even matters related to commerce if you are still in your working years or just can’t put that part of you to rest yet.
While these and many other purely mechanical issues are vital to your due diligence, the best predictor of your successful transition to an expat life in the “happiest country in the world” is finding the part of Costa Rica that is best suited to you. Many of us who seek to move here after an inspirational visit are enchanted by the first place that we experience, the place that first captures our imagination. For me it was Montezuma, a remote beach town on the Nicoya Peninsula; thank goodness I beat the bushes before settling! Every community and geography here, like anywhere else, has its quirks and peculiarities. Many of those are endearing and others off-putting. Unless you have roots of some kind in this country, you are embarking on a statistically unusual and frankly quixotic quest, and your best decisions will derive from an extensive set of data that you yourself collect.
There is a certain intoxication to spending hours canvassing tropical listings while the snow piles up during long winter nights in Calgary. And SoCal aspirants to the pura vida life have long had it with the commutes and traffic. The politically conservative Gringos who start a business here will soon long for the lower taxes of their former home, and those who make the leap without the necessary financial bona fides run the risk of finding themselves over their heads in a country that is not at all cheap. You want to figure a few of these things out in advance of making firm plans.
Get your mechanics right, of course. But first find out what it is and where it is in Costa Rica that is most likely to fulfill you. You must examine why you are making this move and what it is you hope to achieve and what it is that you want to avoid. A few suggestions to fully cover your bases before you ink a purchase agreement:
1. Visit often before you buy. So you’re a surfer taken by the “Endless Summer” evolution of Tamarindo. Okay, but it’s a Gringo redoubt, and if you want a taste of local culture, you may want to look at surfing destinations with endemic culture, places like Pavones, Puerto Viejo, Samara and Dominical. If you’re a retiree, maybe a beachfront home sounds nice, but the coolness of the mountains coupled with an ocean view may bring you more day-to-day contentedness. If you have the cash to buy a home in Costa Rica, you can afford to travel here extensively and get a feel for the different parts of the country, their climate, culture, infrastructure, and nearby amenities. Plan to visit and spend time in Guanacaste, the Central Valley, the southern mountains, the central Pacific Coast, the Caribbean, the northern volcano belt and the Osa Peninsula. Visit and experience, and you’ll see what you like and what you don’t.
2. Rent first. Before you ink a contract and tie yourself down, live in your target destination first. Rent a home and get the feel of the life and the community. You will discover most of the same hardships and upsides as a renter that you will as an owner. And you’ll get a hands-on appreciation of the local society, both Tico and expat. And you can do all this without any commitments or obligations and at a much lower financial and emotional commitment than plunking down the big bucks up front.
3. Get a good lawyer. Costa Rica’s 1948 Constitution was generous to the nation’s byzantine legal community. Under every overturned rock you are likely to find an attorney there ready for your business. A local attorney might know all the stuff and more about your property, while a San Jose attorney wouldn’t, but there are advantages to both ends of this spectrum. Mostly, you must be able to communicate in a common language and feel confident in your advocate. Your property purchase is a gateway to future legal billings, and this is a powerful incentive. You should beat the legal bushes thoroughly before settling on this critical part of your team.
4. Make your agents earn their pay. There is no regulation of the real estate industry in this country. When it’s a seller’s market, everyone here turns to brokering. Many success stories emerge of buyers eschewing the professionals and successfully navigating a purchase through a local family befriended. But for every successful account of non-brokered purchases, there is a cautionary tale. A professional real estate agency will have a wealth of practical guidance on a wide variety of circumstances, plus a thick Rolodex of contacts that can help you through the bureaucracy and help find the contractors you’ll need. As a buyer, you don’t even pay your agent; the seller does. But his or her payday depends on you, the buyer. Educate yourself on the issues concerning the choices you have and make your agent satisfy your concerns and earn that payday.
5. Know thine infrastructure. Water, power, access, sanitation, building permits, concessions, business architecture… If you are a technophile IT exile working from your home and move to an area that has an average of 15 power outages or brownouts a month, then you may want to factor in a battery backup for your sanity and to protect your equipment. If you buy in the northwestern province of Guanacaste, you have to make sure there is water. There are many great deals in remote places, but if you have to spend 25 percent over the purchase price just to put in an access road, you need to factor that into your calculus before you plunk down a deposit. Each municipality — where building permits are issued — has its own culture and interprets national law in its own way. Better learn this dynamic before you lock and load.
6. If your financials aren’t right, put it off until they are. If you don’t have the cash, then you should put off your dream for another five years until you can earn your way into your paradise getaway; if you’re mulling the idea of a bank loan here, buying lottery tickets might be a better waste of effort. But beyond having the dough, it’s not just the cost of the property you buy. After the big dinero download there are building, maintenance, living costs, travel costs back and forth until you settle, caretaker salary, social security and benefits, and resource depletion from a thousand tiny cuts that you may not have been expecting. The cost of living is high— not as high as San Francisco, Denver, or Boston, but higher than Panama, Mexico, Ecuador, Nicaragua, and similar Latin American expat magnets; at every turn you will have to pay something new that you didn’t expect. You won’t be able to get a loan here, so don’t even go down that road. If you don’t have the cash, then continue visiting the country until you do.
7. It’s a new world; be ready for it. So you’ve done all your diligence. You’ve cased the property thoroughly, have excellent legal advice, understand extensively the region you have chosen. That’s still not enough. Your new world will have unbridled avenues for fulfillment and will be pockmarked with potholes of disappointment and travail. How you balance these two poles and everything in between will inform the tenor of your successful transition. Some find their lives positively transformed in ways they could never have expected. Others find disappointment and crater in cynicism and beat a path back home, sometimes abandoning sizable investments. Personal strengths and weaknesses are weirdly magnified here, and all of it is subject to who you are and what you bring to your new incarnation. There is no possible advice on this one, as it is all on you. But ignore its reality at your own peril. Only you can make this work.
Most people who buy here already know these things and are scouting them out on their own already. Costa Rica is unquestionably one of the most amazing places in the world to live. It is at or near the top of every desirability index, but beyond the social network buzz and breathless accounts from lucky journos on a paid junket to paradise, this country really is transcendental.
And while the market has been warming up for the past two years, it’s still a buyer’s market, so don’t get left behind when the inventory left over from the recession is picked up and prices edge back up to their pre-2008 levels. The time to tackle the learning curve is right now.
Paul Collar is the owner of Osa Pen Realty, a full-service real estate agency headquartered in Puerto Jiménez on the Osa Peninsula. See his listings at www.osapenrealty.com or write him at email@example.com.
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