Costa Rica Blog

As many of you may know, I was just in Costa Rica leading two back to back property tours.  I just returned on the 14th of January and am now catching up on my blogging.

Okay I admit it, I'm really busy these days.  I leave tomorrow for Costa Rica to lead our 4 day Discovery tour running December 31 - January 3rd which is immediately followed by our 10 day country and property tour running January 4th - 13th.  In the meantime, International Living did another article about our developments so I've also had to answer hundreds of emails.  I am not complaining.  So here, for the last entry into our blog for 2009, is our UPDATED slide show.  We've worked over the last week to get it finished since our new video is not yet done.  Take a moment to view the show, I think you will enjoy it.  When you are finished, please comment about it via Digg, Delicious or Twitter.  We thank you all for your loyal support this year and hope 2010 is a great one for all of you.

Coffee cultivation was first undertaken on a large scale by a small group of planters shortly after Costa Rica's independence from Spain in 1821.  Earlier, in the first half of the 18^th century Costa Rica's trials with coffee were unsuccessful.  Relatively isolated, Costa Rica was on no important trade route nor was it a regular port of call. Furthermore coffee was processed in Chile and shipped to Europe where it was sold as Chilean coffee at prices which seemed exorbitantly high to the Cost Rican planters.  However in 1845 a British ship owner gave them direct access to the English market elevating Costa Rica from the country with the worst economic conditions in Central America to far surpassing the other nations in prosperity.  The British, in fact, were the principal purchasers of Costa Rican coffee until late in World War II.

Costa Rican Beer

Rental Property Research Tools:  Thinking of buying Costa Rica real estate as an investment?  When buying real estate in Costa Rica you should research first to determine if it's a wise choice.  Before you decide to build a home in any foreign country for rental income, consider the following.  Have you ever heard of http://www.vrbo.com/  This site, Vacation Rental by Owner, is a great place to find rental properties around the globe.  It is also one of the most valuable research tools available for anyone considering the purchase of property in a foreign country.  One of the best indicators of how to judge the value of a real estate investment in a foreign location is the quality of the rental market.  If a strong rental market exists, you can easily judge the quality of any investment using simple math.  Using http://www.vrbo.com/ you can find complete rental information, including rental rates as well as availability.  Each property specifies the rental rates for short term versus long term, high season or off season as well as features and photos, square footage and number of beds and baths.  It is a great tool to compare potential purchases in various foreign locations.  If the rental market in an area is good, so is the resale market.  If the rental market is weak, don't expect great returns on your investment, appreciation or a secondary market to sell down the road.  
What to Look For:  With this tool you can compare the cost of any purchase to the potential return on investment from rental income.  High rental rates and low availability is the key to solid returns and appreciation.  As an example, check out the rental activity in our town, at VRBO.  From the home page, select Cental America, then Costa Rica, in the state of Puntarenas and the town of Ojochal.  Compare our rates and bookings to any other location, Panama City, Salinas, Nicaragua, Belize, Ecuador or Mexico and see for yourself why our developments continue to outsell many others.  Look through all the listings in each area you are considering, this is what smart investors do.  You may see a few new listings that may not yet have much rental activity and there will always be some very successful renters as well as some who don't do well at all.  Use a good sample size and then compare results to the cost of purchase to figure your potential return on investment.  A good investment should always have a strong rental demand.  

The 84 year old insurance monopoly run by the Instituto Nacional de Seguros (INS) in Costa Rica is now officially open to competition.  President Oscar Arias signed the bill enacting the changes on July 22^nd. 

Some of you may have seen this article before in our newsletter but it got so many comments we thought we should put it in the blog.  Let me also mention that the "executive check up" that I had at Clinica Biblica now has the cost of the check up listed in the article. (you'll have to read a bit to find it).  This is the second article we have written on Health Tourism in Costa Rica because the subject seems to get a lot of interest from readers from the US and Canada.

Sloths (locally called perezoso which means lazy) are relatively long lived, sometimes living for more than twenty years. They spend their entire existence hanging suspended from the boughs of trees. Their limbs are long and well developed, and terminate in long curved claws that hook over and grasp the supporting bough. The animal moves by advancing one limb at a time in a slow, deliberate fashion.

When we'd settled on Costa Rica the destination we planned to retire to the first thing we did was set a strategy to find a piece of property that met our requirements in terms of size, location and budget.  We were pretty savvy shoppers having bought and sold close to a dozen properties in the states so we thought we knew what we were doing.  We first looked for foreclosed property in Costa Rica.  We quickly realized there wasn't much in the way of foreclosed homes in Costa Rica since most homes have no mortgage, with most being purchased in the past for cash.  The mortgage market in Costa Rica is still in it's infancy.  Typically you can't get a mortgage on land, only developer financing.  In this type of financing, the developer holds the note.  Mortgages for finished homes or construction mortgages typically require large down payments in Costa Rica.  Banks in Costa Rica want a minimum of 20% of the value of the mortgage as collateral.  Fortunately you can typically pledge land you own as collateral for a construction loan which is what many owners in our developments end up doing.