Many people who come to Costa Rica want to buy into a little piece of paradise. And why not? Beautiful beaches, great climate and excellent prices tags (compared to more developed countries) make it an attractive investment for anyone. Costa Rica real estate agents say that too many North Americans and Europeans come here with wide eyes and bulging wallets and expect the process to be as easy as purchasing a pack of chewing gum.
Questionable property deals, the relative high price of good lawyers and Costa Rica real estate agents, and the amount of information that needs to be digested in a new country, makes it a part time job for anyone to buy into paradise.
Real estate agents say the decision to purchase property should be undertaken with the same due diligence that one would assume in one's home country – if not with more care.
Here’s what you should consider.
1. Visit Costa Rica
Seasoned Costa Rica Real Estate Agent Manuel Pinto, owner of Caribe SUR Real Estate, says he spends half his time answering questions about Costa Rica for people who have never been. “It’s a huge error and a waste of time to start looking for property without visiting the country,” he said. Buyers should spend some time exploring before they make the decision to invest in property. “Costa Rica is not for everyone. It’s still a modern, third-world country.” Pinto said
2. Know Where you Want to Buy
Costa Rica is a deceptively vast country for its small size. There’s desert, rainforest, cloud forest, muggy coastlines, refreshing mountain communities, the Caribbean rasta and the Pacific latino. There’s rural and urban, isolated and convenient, ex-pat friendly and untouched pockets of pure locals. “There are many parts of Costa Rica ... If my number one piece of advice is to visit the country, my second piece of advice is to see as much of the country as possible,” Pinto said.
3. Find a Credible Real Estate Agent
With no real oversight of the buying and selling of property in Costa Rica, the real estate market is still very much a Wild West. People have lost out in Ponzi schemes, false advertising and some have been duped out of a large chunk of their savings. Blu Stewart, a broker with American European Real Estate Group in Guanacaste, who first came to Costa Rica in the 1970s, says, “Don’t go with an agent that has a cardboard box of an office.
"There are plenty of agents here who work out of their car with a cell phone and nothing to lose if a deal goes wrong," he said. "Always work with an agent that has overhead and rent – the same goes with your lawyer.”
4. Know What to Consider when Valuing a Property
Neither the price tag nor the assessment can tell you the real value of the property. When you want to know that you are getting the best deal, consider the following questions: How much road frontage is there? Can the lot be subdivided? Are power and water connected to the property? If not, how far away is it? How much of the land is buildable? How is the water pressure? What zoning restrictions are there on the property? These questions and more are considered in the forums on the American European Real Estate Group.
5. Do Your Homework
There are dozens of articles, books and magazines on purchasing real estate in Costa Rica. Surf online and talk to people who have bought property. Good resources include Costa Rica Living Yahoo Group (http://groups.yahoo.com/group/CostaRicaLiving/ ), welovecostarica.com and American-European.net (http://american-european.net/)
6. Take Your Time
“Don’t rush it,” says Pinto, who has spent seven years in the Caribbean selling real estate. “If you come here for a week, you are missing the reality of Costa Rica. My advice is spend some months exploring the country and trying out different spots.” He added, You may not have seen it on your vacation, but there’s plenty of bureaucracy, petty theft and shady deals that taints the paradise of Costa Rica.
7. Stay Away from Beach Front Property
Costa Rica has a maritime zone law which restricts the development and ownership of land within the first 200 meters of beachfront, starting at the high tide markers. The government has been known evict and demolish buildings that violate this law. The Maritime Zone Law is important to consider when purchasing beachfront property. For any transaction, make sure property is free from debt or unpaid taxes by pulling the titled registration number or folio real at the Public Registry.