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CentroJoe

Buying in Costa Rica...thoughts?

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I have been considering buying a place down there for about 6 years…I visit yearly for 3-4 weeks every Feb. and have really fallen in love with the Pacific area between Jaco and Parrita.

Obviously prices have come down with the US and world economy, but I am a little concerned about any other reasons for the pricing downfall I may be missing….

 

I have heard some chatter about new laws for foreigners recently that are not as favorable, but can’t seem to find what they are to determine if they would change my mind.

 

 

My main concern is if I am missing something with the pricing going down or is it just simply that people are lowering prices simply because they need the money like her ein the U.S.

 

 

 

Ideally, I plan to spend 3 months a year and some week long visits ever 3 months and then in a few years maybe 6 months a year down there…

 

 

Any advice from experience is much appreciated. I’d love to hear from anyone doing something similar.(good or bad)

 

 

 

Thanks for any insight!

 

Joe

 

 

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New laws?

 

Well, let's see...

 

The monetary requirements for Rentista and Pensinado residency have risen to $2500 and $1000 per month respectively. CR Migracion is stepping up enforcement.

 

A "Luxury Tax" on houses valued at ~<$170,000 has been imposed.

 

A new traffic law (parts of which are still in limbo) has been enacted. Some new requirements for drivers and stiffer fines.

 

None of these new laws have had a huge impact on most people's day-to-day lives so while new laws are always a concern, none of these have prooved to be a huge issue for most.

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Many of the original prices were ridiculous and aimed at ignorant buyers. Now, SOME of the sellers have become more realistic because they have been sitting on their "big-money-making investment" longer than they would like and they need some cash.

 

A surprising number of owners/sellers still sit on land that is "for sale" at a high price while they hope for an ignorant buyer to come along. I think that potential buyers are normally more cautious now, and tend to be more informed about CR and buying property, so the amount of "impulse-buying" that was occurring previously has also declined.

 

We have looked around at prices in many parts of Guanacaste, Puntarenas and the Central Valley, and my impression is that land and condo prices aren't going up anytime soon, so unless you do find a verifiably good deal, patience can be rewarded.

 

Keep in mind too, that as the prices and cost of living in CR have gone up, buying in other countries has become relatively more attractive, and to some extent, this will put downward pressure on land and home prices in CR.

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Hey Joe,

 

 

 

Thank you for your questions and well thought concerns. You are right on both of your main issues, but it is not as bad as you may think. Yes, the laws have changed, but nothing prohibitive or drastic and not even really on the issues that you directly addressed.

 

 

 

An earlier poster, Mark, is right….none of the new laws really have much of an effect on someone like you. You want to buy a place and live here for a few months out of the year, then none of these laws apply to you. The new laws deal with residency status and not your power to purchase property. As an American you can buy property here as easily as a local.

 

 

 

As far as prices going down, yes, we saw that happen for 08 and 09, but investors are showing up now and we are very busy. I am the broker for Coldwell Banker in Manuel Antonio and Parrita is just 20 minutes from here. I just sold a property in the Parrita area this week and I can tell you many buyers are coming down from the States right now. This is a great time to buy, a very good time to buy and I am not the only one who has noticed this. Investors are showing up and the good deals are getting bought up.

 

 

 

So there you have “my 2 cents”. I know it can be pretty daunting the whole idea of buying property down here, but remember one thing…. Costa Rica depends on our gringo dollars to make their economy work. They are not going to kill the Golden Goose.

 

 

 

Let me know if there is anything I can do to help. I know the area you are talking about very well and if want me to show you around when you are here, I would be happy to help.

 

 

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Thank you all for the feedback!

Those are the laws I was hearing about I'm sure...

I have a hard time believing that the real estate is at the bottom, but it has to be getting pretty close..<br style="">

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We bought a condo (for family) last month. We saw many, many sellers and very few buyers. Paying full price isn't always good, or always bad. It really pays to shop around. A good lawyer can handle the escrow duties, and much more. We did the funds and title transfer all sitting together in the same room and did a wire transfer to the seller. Title insurance isn't required if there's no mortgage.

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What are the main risks in having part-time property when I have no intention to get a residence status?

Anything except burglars and squatters?

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If your only intention is living here part time, I would say, 'go for condo-type' living. Lots of inexpensive ones advertised. Make sure it already exists and the facilities finished

This way your 'investment' is more protected and you do not need to hire someone in your absence to live there otherwise you will be required to pay a salary plus other benefits which will probably be more than your condo fees.

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There is always that (pretty small) risk that you would be denied re-entry to Costa Rica. Then, you own property that you can't get to.

 

This is a risk that I keep in mind because I know someone who had this happen. It started with a simple refusal to hire a local for some work. The guy was not the ideal employee by a long shot and I think that was pointed out to him and he took it hard.

 

The local got angry and told police there were drugs in the house. Lucky guess. There was a roach in the ashtray and the owner got booted out of the country. Now the owner has to deal with property he can't get to. Sure, you probably shouldn't smoke pot but a lot of people do and the consequences can be high (no pun intended).

 

Every non-resident property owner should consider how easy it is for someone to get you booted out of the country. Not many people follow 100% of the laws 100% of the time and not many people get along with everybody all of the time. I wouldn't be surprised if people have been kicked out on trumped up charges. All it takes is a dispute with a local who decides to play dirty. The risk is there.

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