House Hunting in Costa Rica (Part 1)

Costa Rica, Uncategorized

Background: In November of 2016 I suggested to my now husband (Nathaniel) that we consider buying Real Estate in a foreign country. We had recently become very frustrated with the Real Estate market in the San Francisco Bay Area (because we are not millionaires – duh) and had been considering buying out of the area already for investment purposes. I speak Spanish and we have traveled extensively in Latin America (on motorcycles) so the idea wasn’t as scary as you might expect.

I am going to be blogging more about this in detail but I wanted to start from the beginning by creating a series of blog posts that answer the top questions people ask when they find out we bought property in Costa Rica.

Why did you buy where you did?

One of the first things people ask us when they find out we purchased a house in Costa Rica after ‘Why Costa Rica?’ is ‘Why did you buy where you did?’. This second question is usually asked by investor types or people who might entertain the idea of doing the same thing.

My buying trip to Costa Rica would be my third time to the country but a lot of thought went into what areas I would research once I arrived. I had bused across CR in my dirt-bagger backpack days and I had ridden a motorcycle through it much more recently during a trip my husband and I called Autopista End but there is  huge difference in how you look at a place when you are just passing through versus thinking about making an investment.

However, I had a very clear idea of how some places could be completely inaccessible during peak rainy season. In some regions a very real concern is that you could be without your main road to the next big city for months if not years should an exceptionally bad series of storms roll through.

With this knowledge as a starting point I began making my criteria list:

  • Attractive to tourism
  • Accessibility
  • Property Ownership with Minimal Restrictions
  • 10-year appreciation
  • Would we want to live there?

Tourism

Tourism is huge in Costa Rica and there are a lot of locations to consider based on this criteria alone. Off the top of my head: Arenal, Monteverde, Tamarindo, Manuel Antonio, Jacó, San Jose, Montezuma and La Fortuna are all excellent locations.

Accessibility

Goodbye anything on the Nicoya peninsula.

The Nicoya peninsula is beautiful and I love it but the infrastructure seemed delicate when I had visited in the past. There are a lot of dirt roads and rivers that could become impassible in heavy rain. And one must assume most tourists aren’t going to drive through a river to get to their holiday rental.

Why? damage to a rental vehicle caused by driving through a river is not covered by any of the major rental car agencies I have seen in Costa Rica so I chose to consider this when purchasing a property.

(The image below is from my 2013 visit)

Property Ownership Restrictions

A lot of people have asked me ‘Can I legally buy property in Costa Rica?’

Yes, Foreigners can legally own property in Costa Rica but there are some restrictions regarding how close to the water line a foreigner (or anyone actually) can own property.  I will generalize these rules by saying with the exception of 5% of Costa Rica’s coastline a foreigner cannot own property in the traditional sense within roughly 600 feet of the high tide water line which I think is very generous of the Costa Rican government.

If you want a deeper dive on these laws please read this information on the RE/MAX Tamarindo web site. I think it does a very good job of explaining these rules. : Link

10-Year Appreciation

I will go into this more in the blog about what I did when I went house hunting. The 10-year appreciation factor was difficult to assess from my living room but became much clearer when I hit the road. Based on this criteria however I knew I would be focusing on areas near water.

Would we want to live there?

When breaking down the regions of Costa Rica for a potential investment we didn’t give this consideration as much weight as other factors. 10-year appreciation and tourism were the top weighted factors in narrowing down my physical search of the country.

At the end of these considerations I narrowed down my search to the regions below and created a hierarchy among them so that on the ground knowing that I would have to remain flexible. That’s when I booked a ticket for January 2017.

The next post (Part 2) will detail my boots on the ground search.

CR_Regions

Live Link to Costa Rica on Google Maps: Here

 

 

Why Costa Rica

Costa Rica

Background: In November of 2016 I suggested to my now husband (Nathaniel) that we consider buying Real Estate in a foreign country. We had recently become very frustrated with the Real Estate market in the San Francisco Bay Area (because we are not millionaires – duh) and had been considering buying out of the area already for investment purposes. I speak Spanish and we have traveled extensively in Latin America (on motorcycles) so the idea wasn’t as scary as you might expect.

I am going to be blogging more about this in detail but I wanted to start from the beginning by creating a series of blog posts that answer the top questions people ask when they find out we bought property in Costa Rica.

One of the VERY first things people ask is Why Costa Rica?

You may begin by assuming that I love the beach but I really don’t. I don’t particular enjoy being at the beach and I don’t enjoy swimming in the ocean. Swimming in particular is one of my least favorite activities but I recognize that most normal humans (without body image issues) generally love vacationing near water and the planet is mostly covered with the stuff.

Our general list of concerns for picking a property were as follows:

  • Tourism (Potential for Vacation Rental)
  • Potential appreciation over a 5-10 year period
  • Friendliness to foreign investment
  • Could see ourselves living at the location
  • Proximity to California (For follow up visits)
  • Budget

Tourism

I have lived in Mexico and I have a great deal of family in the landlocked state of Tlaxcala who could theoretically assist with any property management but after much consideration we decided Americans as a general population still have too much fear when it comes to visiting the country.

Based on the American fear criteria Mexico was stricken from the list along with El Salvador, Honduras and Colombia (which we actually love).

Potential for Appreciation

The affordable properties of El Salvador and Honduras stayed off the list because we don’t foresee their rough and tumble reputations changing significantly in a 10-year period.

Because of our hopes for strong 10-year appreciation we wanted to try to buy something near water which heavily factored into my search once we settled on Costa Rica.

Friendliness to foreign investment

Because of my family in Mexico we were still really tempted to take a look at properties there but once we realized how regulated foreign investment is along the coast lines it kept dropping down the list of potential countries.

It was during this time I discovered how generous the Costa Rican rules were by comparison and Costa Rica started to climb in the rankings… There is also a massive expat population constantly looking for a place to live in CR.

costarica143

One of the things that sealed the deal on Costa Rica for us is that the country is very committed to being eco-friendly. Costa Rica contains 6% of the worlds bio-diversity despite being a tiny country. Photo: Alex Washburn

Could see ourselves living at the location

On this criteria alone Colombia, Argentina, Mexico, Guatemala and Costa Rica rank (and in that order). Nathaniel and I love Colombia and Argentina but Argentina is a pretty gnarly (and expensive) flight from California should anything come up with a potential investment.

Referring back to the other criteria we don’t foresee a huge swing in property values happening in Guatemala in the next 10 years.

Proximity to California

Buying a first property in South America becomes a daunting prospect when you consider you might need to start visiting your purchase on a regular basis till you hit a rhythm with your rental ambitions. Flight prices to South America can swing much higher much more quickly when compared to flights to Mexico and Central American locations so everything below Panama suffered in our rankings based on this criteria.

Budget

Our budget was how we arrived to the idea of buying in Latin America in the first place but we were confidant as we zeroed in on Costa Rica that we could buy an amazing house at this price. *Spoiler – there were some surprises with this assumption.

After much discussion and the weighing of our criteria we settled on Costa Rica and I booked fights for January of 2017 to go house hunting!

House Hunting in Costa Rica : Coming Soon