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doppelt

Buying vs Building and and tanking Canadian Dollar

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doppelt    0

Hi

 

Maybe someone has gone through this many years ago.

I plan to move in late 2015 to Costa Rica.

 

I only have so much Canadian money to convert to US

and the worry I have now is that my plans may be dashed

because the Canadian dollar that was 96 cents when I started this

plan, is not almost 80 cents

 

Its ridiculus

I have no faith in this nCanadianj currency at all

when i plan to spend 200 K US, I now have 49 K less to spend because of the exchange.

 

I heard that if I build a house rather than buy one, I can save 30%

that would offset what I lose on the exchange\

 

or..i can just wait a year (maybe) for the dollar to go back up

 

any experience out there on this?

 

thanks

 

Dennis

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salish sea    0

Hi Dennis,

 

I agree with crf. We looked at a lot in San Ramon and found out that it would cost around $85/sq ' to build (early 2012). The wonderful agent (no longer here in CR) advised us to buy an existing house we liked instead of building. We did find a wonderful house, and for us it was the right decision.

 

Unless you have a completely trustworthy general contractor and find no unexpected "surprises" when the building is going up (one neighbor here had a $4,000 retaining wall that wasn't in his budget, but which he had to have constructed) -- and tell me how likely both of those things would be in Canada, let alone here -- if you are committed to owning rather than renting, do not build. If you can find "off-the-shelf" house plans here (that would be for a Tico-style house), you might be able to build something within budget, but even then, I wouldn't count on it.

 

regards,

Gayle

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doppelt    0

thanks

 

I have heard all the rent advise before, and I always seem to get people trying to preach about renting to me rather than answering the question.

Thanks, you did.

 

I want to buy, not rent, Period.

 

Anyway, I will buy, it just seems so scary that the dollar is falling more and more.

 

thanks

 

Dennis

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salish sea    0

Dennis,

 

You could always wait until the Canadian dollar rebounds. The tradeoff, of course, is that in the meantime, if you do decide to build, materials will continue to go up in price. I remember when the Canadian dollar was worth as little as 63 cents (and we had a wonderful time sailing in BC and buying things we couldn't have otherwise afforded) and also remember when the CAD was worth around USD1.10 or a bit more -- ouch! (for us, not for you, when Canadians flocked south of the border to buy our cheap gas and other stuff).

 

I think if you're committed to CR, really know where you want to live, then bite the bullet. Lots of houses for sale, and if they've been on the market for a while, you can be a tough negotiator, and maybe the exchange rate will wind up not mattering at all.

 

Good luck!

 

regards,

Gayle

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doppelt    0

thanks

 

I don't think I can negotiate my way out of 40,000

but i can try

 

the dollar is so depressing to me

its been in the 90-100 range forever

 

they say it maybe go the 70-79 cent range and rebound back to 85 cents by the end of 2015 or 2016

 

many different stories

 

i will find a way

thxs

dennis

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RobK    0

I've come to accept that predicting currency movement is impossible. Not long ago the Canadian dollar was to "plateau" at 1.10 US. Geez I remember paying 1.50 CAD+ as a kid.

 

Buying vs building...another crap shoot. We were lucky building what we wanted, where we wanted, on time on budget. But there are lots of building nightmares out there, in CR AND Canada.

 

Take your time, keep both eyes open, get lots of references. All you can do is minimize the risks. We have no regrets.

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canadaMan    0

I chose the buy it now route, and I certainly don't regret it. We are changing the property to suit us, and I want to plant things and watch them grow. Yes, in any existing house there are things to fix, but when you are retired, you have the time, and the desire.

 

We visited for many weeks and then stumbled on a house that fit our check list. But we drove about 5,000 kms around the western half of the country...

 

There are a LOT of properties for sale both listed and unlisted. Find a motivated seller, and you will see a price swing by $40,000 easy. It's the wild west down here for real estate. Give yourself a lot of time to see the different climates. We chose the south pacific coast for the the weather, beauty, and amazing expat community. There are many Canadians in the Ojochal/Tres Rios/Coronado area, but also many other nationalities to make it interesting. I wouldn't get discouraged yet. Since Canada is really suffering from over-extended credit lines, bulging mortgages, and an oil business that just croaked, I wouldn't expect the Canadian dollar to go back up. I actually expect worse, because when the US Fed starts to raise interest rates, and Canada can't follow suit due to a declining economy our dollar will lose more.

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T&VSmith    0

I empathize with you doppelt we just completed our house in October. When we started building our house in November of 2013 we had just gone through the period where the Canadian dollar was worth more than the USD. We hedged our bet and bought $150,000 worth of USD before we broke ground. The last construction payment we made in October of this year was near the horrible rate it is now. We would not be anywhere near as comfortable breaking ground now with the rates where they are.

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doppelt    0

thanks for all the comments

 

I also expect the dollar to get worse, and I also know it will rebound

the question is 'when'

I may not have the time to wait

 

The idea that I can swing a price by 40 K makes me feel better\\or I cvan save by building, but if i go that route, i will check many references, and be opn the site every few days

 

Dennis

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jincr    0

I used to make my living trading the Canadian dollar, so I have a little insight. It sure looks to me that the loonie will hang around 75 to 85 cents for the next year or two at least. Once a major trend is established, it usually runs for several years, even decades. But things are changing so rapidly now I think the moves will be shorter.

 

I have been short the loonie from above par to where we are now. I started to cover (buy loonies) this week. I am very happy to be able to buy at anything around 75 to 79 cents. I will probably go a little long the loonie at 75 cents, and really long at 70 to 72 cents.

 

So what I'm saying is, I am GUESSING that the major part of the decline in the loonie is over. I very, very much doubt we'll see even low 70's let alone 62 cents, although I would love that. (Which maybe biases my thinking).

 

Buying vs building: After my career in banking, I moved to South America and have several years experience building homes and small hotels. If you do not speak Spanish, and are not 100% at the site every day, all day, you will have some very bad experiences, generally just paying double or triple what you should be. Architects and or contractors will be arranging kickbacks galore if you are not on top of the cost of every load of sand, cement and piece of wood or metal that is used in the project.

Scaffolding that you own will somehow disappear at the end of the project, no one knows where it went. Budgets are meaningless. Contracts are meaningless. If an employee (workman) decides to sue you, for any reason, you will lose. Your legal fees will be higher than the amount he sues you for. Labour laws are wildly skewed in favour of employees/contractors.

These are just a very few minor examples of what you can experience. basically think of the average nightmare people have in north America building or renovating, multiply by 2 or 3 or 5 times, and you get the idea.

If, and it's a big if, you can find a very reliable, honest contractor, whose references are impeccable, and whose many projects you have visited, on your own, can find time to fit you in to his schedule, and if you can be sure to be there to oversee things every day, you might have a good experience.

 

if you are an experienced builder, I would highly recommend just hiring your own labourers for a monthly wage and do it all yourself. You better speak fluent Spanish though.

 

Not trying to put you off completely, I am about to start another building project myself, but I now have years of experience and I know the exact cost of every bag of cement, every floor tile, every electrical switch. That's because I buy all materials myself.

 

All I do is pay people wages, and I determine if they are worthwhile or not. If not, their contract is not renewed the next month (or week).

 

If you do things this way, instead of being quite expensive to build here, you'll find it's actually incredibly reasonable. You can find good, reliable workmen, with just basic skills, not top electricians or carpenters, for $5 an hour.

 

Very hard to find good electricians that are reliable and show up when they say they will, but pretty much every other trade is easy enough to find.

 

Oh, and make sure they are all 'de confianza'. They must come with good references from other people that you know well.

 

I could write a book on other things to do or not do, but this might give you some ideas.

 

if you go into it with your eyes open you can save a lot more than 30%. But if you go blindly trusting the first smiling local you meet, you might just end up in a nightmare.

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jincr    0

p.s. If you look at all the RE for sale in CR, you will see a lot of ads saying selling 'below market value', which is obviously untrue, but what I think they might mean is that the property is selling for below replacement cost, and although people tend to exaggerate in these ads, especially RE agents, I have seen some luxury properties for sale where it was definitely true.

 

(Pretty easy to calculate replacement costs of a building if you know the square footage and local costs).

 

So you might wonder why people are selling for below replacement cost. Good chance they were grossly overcharged or they spent foolishly. Doesn't really matter though, there's a good chance if you do your homework and research that you can buy a good property and home for less than you could possibly build it for, and you save all the hassles and uncertainties.

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If you haven't lived in an country/area for at least 1 year a person is foolish to buy. Take a close look at Craigslist ads. There is plenty of stuff for sale. Purchasing a property that may take years to sell if necessary is not a good idea.

 

The only exception to the rule would be is if you have so much money it really doesn't matter if you get stuck with your purchase.

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Savannahjo    0

It is certainly not the "opinion" of everyone that you must live in a country for a year before you buy or you are foolish. Craigslist is also not the preferred way to buy property, or a home or anything (opinion again) of great value. One must consider their individual needs.

 

We did not live in CR before we purchased. We visited about 10 times, met with professionals....from real estate to attorneys and completed the transaction now 5 years ago and have seen great returns since then.

 

This forum is weighted heavily towards renters and people who do not believe owning is worth it. However, there are still some of us that do not agree and have had a wonderful experience with ownership......and we don't (necessarily!) have so much money 'it does not matter if we get stuck' with it anymore than it matters with any other investment of land/homes around the world.....that one may get stuck with! Do your research and buy! Again, one forum member's opinion.....

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