FIRESALES IN JACO, COSTA RICA, really?
Jaco Costa Rica Beach Fire Sales! UPDATED: Nov 1, 2009 by Jeff Fisher, Owner-Broker CR Beach Investment Real Estate Will the U.S. recession and Global Crisis terminate by the end of the year as some economists are predicting ? Will Costa Rica 's new...(read more)
Still Optimistic about Jaco!

Quick thoughts as to why I am still optimistic about Jaco! by Jeff Fisher, Broker-Owner CR Beach Investment Real Estate Aug 16, 2008 

Hello from my beautiful semi-beachfront bungalow home in Playa Hermosa, just 8 minutes south of Jaco. When I first wrote this I had just posted  in our "Costa Rica in the News" section that the town of Jaco was awarded a Blue Flag. We have one blue flag now and well on our way to having the actual beach receive a blue flag. And we are getting a beachfront boardwalk! For those that have lived here a long time, (15 years for me!) this is almost unbelievable news!   Just recently announced is that the  "2009 International Surfing Association (ISA) World Surfing Games will take place in Playa Hermosa, just south of Jacó on the central Pacific coast. Some 35 countries are expected to be represented in the prestigious competition set for July 31 through Aug. 9 of next year."  More great news can be found in our  "Costa Rica in the News" section of our website, like: During the first six months of 2008, 1.03 million foreign visitors came to Costa Rica, for an increase of 12.5%;  or President Oscar Arias said that a regional development bank granted Costa Rica a loan of $850 million to help improve the country's infrastructure; or .........

I am always being asked how the continual negative real estate news from the States is affecting our business here. I tell the truth, maybe things are slower by about 10%-that's all. (August update-ok 15% slower).

  Costa Rica is still unknown to many N. Americans and still has a tremendous allure to those that have never been here.  The publicity surrounding the vast quantities of "Baby Boomers" who are active and interested in either retiring full time or half-time to Costa Rica is constant.  Articles about  vacationing in Costa Rica appear daily in my Google alerts about Costa Rica;  and the overwhelming amount of articles are positive. But how's the market you ask?  Will there be a glut of condos available that will drive down the price?  The facts are that most of the beachfront condos currently under construction are sold out. Many are currently being "resold" at a profit, anywhere from 10-40%.  The situation in the States is affecting us here, in that many developers here with new condos to sell will have to be more reasonable in setting their pricing!  The "flippers" are accepting less than they had thought they might be able to charge for their investments of only one year ago--but there are still profits to be made.  These are all positive signs for the moment because Jaco condos currently do not have the right to charge the same high prices as their Mexican or Hawaiian counterparts. Not yet!

A few weeks ago an investor from Florida was here that missed out on some tremendous opportunities a few years ago that I had shown him. He could have tripled his investment dollars. Instead he invested in Florida and is now suffering tremendous losses. He showed me his emails that everyday were touting liquidations of condos and homes with discounts from 30 to 50%. 

 How can I compete with that I thought? How do we in the real estate business in Jaco compete with the foreclosure hysteria in the States?

 I have had time to reflect and the answer is Florida is in the United States, and so is San Diego and Padre Island and New York and Las Vegas.    The minority of world travelers, second home purchasers, and international retirees will always seek out a place that is not in the United States. Costa Rica welcomes these visitors, inspite of all its problems, in a way that is rivaled by no other country. The "land of peace" the "Switzerland of the Americas" is indeed the most expensive place to live in Central America, but it is also the safest and closest to the U.S. with the best weather, great lifestyle options and most community support of other Ex-pats.  In a world that is increasingly more unfriendly, more violent, more expensive, I have yet to hear a better option than Costa Rica. More thoughts-

Why is Jaco a great place to invest NOW?:

1. The new highway was started in Jan 2008 and will be partially finished-2009? reducing travel time from the airport to Jaco to under 75 minutes. 

2.  The hard work of the Jaco Chamber of Commerce, (www.cenpac.net) promoting real changes. Very few other international destinations have as strong a local-Gringo positive guiding force. They just sponsored Jaco's First Art Festival.

3.  International travel and eco awards continuing to publicize Costa Rica and Jaco Beach.

4.  Pricing that remains cheaper than other beach vacation and retirement destinations, especially when  you factor in , no taxes on property gains, and best of all, annual property taxes of 1/4 of 1% annual of declared value. ($250 for every 100k).

5.  The "boardwalk" or promenade will garner Jaco the positive international reputation it has been seeking since the town's renovation.  Police and infrastructure changes are improving everyday.

6.  The neighboring oceanview and beachside communities within 25 minutes of Jaco will become very desireable places to live for those that seek a mellower lifestyle.  Golfing and boating fanatics will be overjoyed at the choices offered and other adventure enthusiasts will continue to appreciate their options.

7.  Whereas many major hotels have been announced for the northern region, their land procurers will discover like I did, that the Central Pacific area is the place to be:  a.  better weather here than up north (6-10 degrees cooler).  b. better availability of water for developers and locals alike, see our news section!     c. easier access to and response from the local Municipality       d. continual year-round tropical green  e. the proximity to the nation's largest airport and capital San Jose is a real asset; after all this is a small country!           f.    greater availability of goods and services than any other beach community          g.  LOWER PRICES for almost everything compared to the north!

thats all folks, any comments-put them in the blog!

Jaco Market Analysis July 31, 2008

Our Own Top Sales Executive Brian Smith responds to our favorite online thread, July 31,2008 http://groups.yahoo.com/group/CostaRicaLiving/ 

Although I agree to a number of things, I must take a moment to clarify the area where my expertise and knowledge are strongest, the Central Pacific.

1. Virtually dead RE market, prices dropping?.
Not here! We've seen price stabilization in the last six months, but no real price drops except on those properties that were clearly overpriced in the first place.

Our office is busier than same time last year. Other RE agents here tell me they have picked up the pace in the past several months as well. Probably 50% of our prospects are folks retiring in 5-7 years and interest is VERY strong in beach area properties. This percentage seems to grow every month. Even with a bad U.S.
economy, prices there for beach properties are astronomical! Mr. & Mrs. Average North American can afford something nice on or near the beach here that they can't get there...

2.) Stewart Title says "business is dying"?
Perhaps that has more to do with the fact that international title insurance companies pay off so seldom on problematic titles. They won't issue it on anything that might be a problem and who would pay 1% for title insurance when the company does decide to issue it to them with virtually no chance to pay off on it?

3.) Prices are quite high, selling prices FAR below asking?. This is true in the Central Valley and Guanacaste in many cases. I can't believe the asking prices (especially new condos) in the Valley. For something similar here, the price is the same. The only difference is that it has ocean view and you can walk to the beach. This makes a 40%+ price difference in most places around the world, so
the Valley places are overpriced. Guanacaste is discovering that poor infrastructure and low water tables can't be hidden forever, that sooner or later the market takes note....

Here in the Central Pacific, selling prices are remarkably close to asking prices. In the past week our office has seen a $220K beach house go for $215K, a $195K new condo go for $192K and a Los Suenos home go for about 6% less than asking price. This trend of which you speak is not found here.

The only exceptions we're finding are those few "emergency" sales that are prompted not by the CR market, but rather for the U.S. market, particularly Florida and California. Investors losing their shirts in those markets are sometimes forced to sell off appreciating assets here to cover losses there....

4.) Inventories quite high?. In the Central Valley, yes, this is true. I know of several nice condo projects that were completed 3 or 4 years ago with something like 20% sold. Many of these Costa Rican builders believe that the waves of ex-pats are coming, so they keep building them. Common sense says to wait until 90% of these unsold condos are bought before building more.

Here in the Central Pacific, we get tons of requests for preconstruction sales. Folks want to lock in today's price. My own personal opinion is that more condos are not needed here. What is needed is single family homes in gated communities. There are few here and probably 40%+ of our prospects are looking for this sort
of property....

5.) Interest Rates Rising?. This is quite true. Is there anywhere in the world right now where they are not?

6.) Virtually impossible for prices not to drop, up to 40% corrections.     In the Central Valley and Guanacaste, I think this is absolutely true. Here in the Central Pacific where a pure beach front 2 BR luxury condo can be bought for as low as $200K-$275K, I simply can't see a 40% drop! Did I mention that these condos come fully turnkey furnished and include all closing costs? I don't
believe that these condos will be worth just $150K in the near future.....

I have such confidence in the market here that I'm making an offer on a property next week. I feel that there is still some room to grow and that a rebound of the U.S. market will only feed this one. Sure, I'll ask the title insurance company if they'd issue a policy on this property. If they say no, I'll be real careful in my research. If they say yes, it will just give me more confidence in my purchase....

I'd be more than happy to show anyone the types of properties, comparables, selling prices, the market and more here in this area....

Brian L. Smith
CR Beach Investment Real Estate   brian@crbeach.com
 

RE: Current state of real estate market...

"the fact that the st moritz project, a very chi chi development near los suenos has shut down (for now) must say something."

I believe Mr. Lee is referring to the St. Regis development. Trying to sell 1 BR studio apartments with NO kitchen for $800K+ SHOULD lead to a shut down and it did here. I simply cannot see how that could possibly be an indicator of the current and near-future market place....

How about the newly announced high end project across the bay from Los Suenos that just started sales about 6 weeks ago? We heard they are moving well....

"in jaco, there is a glut of unsold beach codos, but the cranes (our new national bird) continue to pour more concrete"

I just spent an hour researching the numbers and found that less than 15% of all the currently existing and reasonably priced brand new condos are unsold. Naturally it is the way overpriced projects that are having difficulty selling more than 10% or 15% of their units. Also, presales have been excellent for reasonably priced condos as well. I believe that 15% unsold doesn't qualify as a
"glut" as a glut by any standard. Go to the Daystar office or Vista CR and get an update for yourself. They are the big boys in town some 10 beachfront projects.

What remains unsold are generally the grotesquely overpriced ones....

The proof is in the pudding:
Costa L condos (252 condos) have sold 20+ units in the month of July, about 30 remain available....

Ac sold four units this month, only three left....

Monte R, only one unit left....

Jaco  Viage, only one 2 BR unit left.....

Vista M, sold out (38 units)

Palo B., just four units out of 38 remaining....

Ba Az, sold out (38 units)

Ba E, sold out (38 units)

Tr. Res, just three units remaining....

Dia. el Sol, sold out (72 units)

Presales are also doing well for at least 6 other projects currently under construction.....

Finally, if folks believe that these condos won't get sold or there is no market for them, think again. A lot of condos have come on line in the last twelve months. I defy you to come to Jaco, the single most popular beach in all of Central America, after Dec. 10 and try to rent one. Chances are you'll be staying in a hostel....

I think that to get a true understanding of the market, one must pound the pavement every day, look, listen and get the facts. Developers talking about slow sales in what is traditionally one of the slowest months for real estate sales doesn't surprise me a bit. Let's try this experiment again in mid-January 2009. That will be the true test....Respectfully, Brian L. Smith

The 'Right' Way to buy real estate by Brian Smith
"WHY would you use ANY Real Estate agent without checking
references?...CHECK OUT your Real Estate agent...Don't be scammed...deal with
reputable owners and agents...'showing fee' up front should tip you off...Don't
get ripped off"

I've been wanting to comment on the number of warnings about crooked or terrible
RE agents in CR for some time, now is as good as any I guess....

First, the "showing fee". I do know of several agents, particularly around
Escazu, that do charge a fee. I don't think it's necessarily a tip off about the
agent one way or the other. A poor agent might do that to try to make some
money. A great agent, very much in demand, however might see that as a
"qualifier" for prospective clients. With gas at $5 gallon, the cost of a
vehicle about double that of the U.S. and with parts and labor runarounds here,
it costs like double that of the U.S. to run a car. Since it is very apparent
that there are probably 5 times as many "tire-kickers" here as in the U.S.,
that's a LOT of time and money to drive folks around. Although I've never
charged anyone, sometimes I will bring up the subject to see what reaction I
receive. What I tell them is that if they pay $100 for a full day of looking, if
they purchase something, I'll give them back $200! A truly interested buyer
won't hesitate to say yes and that's all I need to
hear! If they say no, I let them know that I won't charge them, but I will be
looking for some sort of evidence that they are truly interested and capable of
making a purchase....

Less than a month ago I stood in line at Mas x Menos. A visiting couple were
with a woman who was clearly a long time resident. As I stood there, I couldn't
help but hear the woman laughingly tell the couple that if they wanted a nice
day of touring the coastline, they should find a real estate agent to drive them
around! Yes, sad but true, but these expensive times are changing lots of things
all over, including real estate....

You are right on the first part. I've been an agent for years and not a single
person has ever asked me to show my references. I can't think of a more
important thing to do for one of the most important financial decisions you'll
ever make.....

Here's FIVE EASY STEPS TO FINDING THE RIGHT AGENT:

Call 4 or 5 real estate agents in the area and ask them to name the best two
real estate agents they know OUTSIDE their own offices. Whatever name pops up
most often is likely to be your best candidate....go Google the agent's name and
see what comes up.....

Ask that agent to show you their CR cedula (ID) or work permit.....

Ask how long the agent has lived in CR (5-7 years minimum)....

Ask for a few happy customers to contact.....

Ask the friendly, helpful folks at CRL for their knowledge of said agent...

This should eliminate 95%+ of the bad/poor agents....

I don't tend to use CRL for advertising as I'd hate to see it degenerate into
just another advert forum, however I think that since I've been a member for
over 5 years and that I've made generally positive contributions from time to
time that I've earned the privilege of pointing out some important things about
myself:

I've lived in Costa Rica for over 10 years. I'm married to a Costa Rican and we
have a 3 year old son. I have full legal citizenship through naturalization with
the full right to work. In the past I've been a social sciences teacher and have
run my own business in Costa Rica. I've lived in the Central Valley and in the
Central Pacific areas for years and have travelled this country extensively. I
have a clean background, plenty of clients, friends and many others who've known
me here for years.

I've never had anyone ask me to prove any of this and yet I hear over and over
again about "bad" agents that have burned folks and I know that the vast
majority could have been unmasked with a few simple steps. But why hasn't that
happened? Probably because they are (in most cases) North Americans. North
Americans tend to want to help out their own kind. But what of the United States
itself? Isn't one of the biggest issues right now to do with illegal immigrants?
Some of these same folks who wouldn't dream of hiring an illegal immigrant at
home will literally run to one here!

When you deal with an "illegal", you are not only at risk of a problem with any
legal transaction, you're also at risk for a rip-off of almost any kind with no
real legal recourse. They don't have a personal stake here, most have no home,
no bank account, no phone in their name, no roots at all. They usually pay no
taxes, take advantage of all the benefits, avoid all the legal steps and
paperwork that those of us who want to remain fully legal must endure and they
generally give nothing back to the community. They can just disappear and pop up
later at a new location to start all over again. Longevity is the key factor
here.....

The other part of dealing with an "illegal" is that you are not only giving them
the chance to rip you off or mess you up somehow, you are perpetuating their
stay here in Costa Rica and paying them to boot. This leads to an appearance of
even more of their ilk. How honest do you think they really are? They are here
working illegally and you think they'll truly protect YOUR interests? They are
breaking the law, period.

I'm calling for a conscious movement on the part of CRLers and those they know
to start looking for the "legal" folks in every area of business and services.
These folks have EARNED the right to your support and to your business. They've
spent years of their lives and thousands of $$$ to do it right and they deserve
to be given first chance at making a living.

If you are legal to live and work here, a business owner or provide goods and
services, please let everyone know this. Making a living here is TOUGH and those
of us that have gone through all the malarky should feel proud to point this out
and ask for your business.

I'm here in the Central Pacific and I work hard every day to find great
properties and good prices for my clients and I do everything in my power to
protect their interests. I've spent years learning the language, the culture,
the economy, the government, the legal system and the RIGHT way to get things
done (granted sometimes it is SLOW). I've kept my nose clean and my shoulder to
the wheel, I'm a family man, honest, hard working and LEGAL. Somewhere out there
is somebody that really wants or needs what I have to offer. I ask you fine
folks to consider me if you have an interest in real estate in this area or to
recommend me to others who may be looking. I'd be delighted to show you my
credentials....

By the way, I found my job right here on Costa Rica Living! How's that for a CRL
success story!
More tourists travel to Costa Rica in 2008 ... 17% more!

More Tourists
This year’s first quarter, the number of tourists increased by 92,000 - or 17%  - compared to the first three months in 2007.

The overall number of visitors corresponds to those flying into Juan Santamaria and Daniel Oduber international airports.

According to Minister of Tourism Carlos Benavides, a majority of the visitors come from the United States, in spite of fears that recession in that nation would result in a decrease in the number of leisure travelers.
 
Hounded by Costa Rica mass marketers?
Buying Costa Rica Land From The Telephone Boiler Rooms      by Scott Oliver                      

Sept 1, 2007

http://www.welovecostarica.com

Thousands of people who have bought land from the dozen or so companies that send out millions of emails per week and then have someone in a boiler room in Florida or California beat you to death on the telephone to "close" the sale are now waking up to reality and realizing that their land is not at all easy to sell...

As far as we know, it's not illegal for a high-pressure salesperson in the USA - many of whom have never even set foot in Costa Rica - to sell you land in Costa Rica using this method, but it's just not a smart thing for you to do, especially buying land in a foreign country without seeing it first and doing your homework.

We've been writing about Americans selling land in Costa Rica by this high-pressure method for about five years now and even though there are about 20 different projects that we can think of with thousands and thousands of acres of land and, from what we are being told, during this time there have been less than 20 homes built in all of the projects combined.

One problem that people did not expect, having listened to their salesman tell them that they could buy the land, split it into two and sell off one lot to pay for their new home - Yeah right! Is that most people who have wanted to sell their land have been unable to do so.

Buying Costa Rica Land Is Easy - Selling May Not Be.

Why can't they sell? Because there is no open market for this kind of land...

Who are you going to sell it to? If you are really lucky, the company that sold it to you 'may' buy it back from you and resell it but why would they want to buy it from you to resell your land to one of their customers with a tiny mark up when they can sell their own land with a stratospheric mark up and huge commissions to that same person?

Nobody else in the open market wants it... It's an artificial closed market where the price action is determined by the marketing people.

The reason this land increases in price is NOT because of supply and demand, it's not because people are banging on their doors to buy it, contrary to what they may insinuate and what their email marketing campaigns show - this is not prime ocean view land - the only reason their land prices increase is because they increase them. Simple.

Buy Now Before The Price Goes Up!

You see it's always useful for a salesperson to have a 'sense of urgency' so if they have a regular price increase, it makes it appear that this land is in demand and, the salesperson can genuinely say that: 'You'd better get on board now because prices are going higher at the end of the week" before he pockets his double the industry standard 10% sales commission...

And please remember when the next Costa Rica land salesman calls that the #1 focus for these companies is to sell you land for a much higher price than they paid for it so that they can make money.... They don't give a damn whether you can build your dream home on that land or not.

Some of them claim that they will help you build your homes but since we have seen less than 20 built in the last five years, this promise does not sound promising.

From a recent WeLoveCostaRica.com Discussion Forum thread:

"When he first went there, some dude called Flores said they would build his home for $90 per square foot and that construction price would be rock solid for two years when he planned to build his home which was one of the main reason he bought a land there. Then only five months later (not two years) they tell him the construction costs would not be $90 per square foot but $130 and he is real mad because for his house plan which is just about 2,500 square feet that's and extra US$100 grand he has to find and they lied about the roads which they said would be brick pavers but are now going to be asphalt and he don't believe them much about anything anymore."

Are these boiler room salespeople lying to you too?

Martin Gill mentioned that; "... we do get guys asking us to re-sell their lots..." and..."The big problem is that these developers sell this as an investment and people think that they can flip their lots and make money, but they forget that there are 2,000 lots just like the one that they have." And "unless you have an awesome ocean view the homes will be hard to sell."

If They Don't Build It For You, Who Will?

And if they don't build your home for you, who will? Because if you are thinking of building a single family home anywhere in Costa Rica from a distance, may we politely suggest that you rethink that idea...

We get emails every week from people saying they bought lots in one of the 'Sold-Me-Hard Projects' and could we recommend a Realtor to help them sell their land. Unfortunately, my response always goes something along the lines of: "Sorry we have already asked our recommended Realtors to see if any of them would be interesting in helping you out but there is not one single Realtor that I know of in Costa Rica who is remotely interested in selling your 'Sold-Me-Hard Projects' lot and would be surprised if you find one..."

These land promoters make it difficult for their potential buyers to visit the land they are trying to sell them - unless they have already paid a big deposit BEFORE they have seen it (??) - so how difficult do you think it is for an outside Realtor to gain access?

Depending on the overall market conditions, land can be a very illiquid investment, meaning it can be difficult to sell in a timely fashion but when your Realtor can't even visit it, it's impossible to sell.

If you are planning on buying land in Costa Rica and wish to invest your money where it has the highest probability to make you money with the lowest possible risk, I would suggest that the next time you hear from one of these boiler rooms, you tell them that you are not interested and hang-up.

Instead, find yourself an experienced, trained Costa Rica real estate sales professional, like CR Beach agents,  that will sell you the land you want, often with the developer living on the development and, when the times comes, he or she will also be happy and proud to help sell your land for you...

Written by Scott Oliver, author of How To Buy Costa Rica Real Estate Without Losing Your Camisa and Costa Rica's Guide To Making Money Offshore. © 2007-2008 WeLoveCostaRica.com All Rights Reserved. Reproduction without permission prohibited.

 


Still Hot Market?

 

South of the Border,

The Market's Still Hot

Americans Find Second-Home Boom Endures; Wildlife in the Neighborhood    By JUNE FLETCHER         December 14, 2007; Page W12

The housing slump has sent many Americans shopping south of the

border.   Existing-home prices in the U.S. dropped 4.5% in the third quarter from a year ago, according to S&P/Case-Shiller. But they are still climbing in much of Latin America and the Caribbean.

 

Buyers are being enticed by the kind of double-digit

appreciation that has all but disappeared in the States. In

addition, a growing number of new developments are targeting

Americans looking for good deals and a lower cost of living.

Since 2003, annual home-price appreciation has been running at

20% in the Dominican Republic, and could reach 50% in the near future, according to Boomerang Unlimited, a Napa, Calif., real-estate investment advisory firm. In San Pedro, Belize, the average price of a 2,200-square-foot home was $697,500 in September, up 18.6% from a year ago, according to a study by Coldwell Banker; the price of a similar property in San Jose, Costa Rica, was up 20.7%, to $389,900, the study said.

Prices remain low compared with those in the U.S., particularly for waterfront properties. Because Americans generally buy and sell properties throughout the region in dollars, not the local currency, home prices don't fluctuate with the various exchange rates, as is the case in Europe. What's more, the dollar generally buys much more house in these countries than it does in the U.S., because labor and land are less expensive.

 

LIKE FLORIDA IN THE '50s

Still, the rapid appreciation is drawing growing numbers of bargain hunters, making good deals scarcer and causing some customers to look beyond the usual vacation hot spots. In the Dominican Republic,

Century 21 broker Dean Brown says that 80% of his buyers this year have been Americans, compared with half last year. Softec, a real-estate consulting firm, says in the past three years, investments in vacation homes in Mexico, primarily by buyers from the U.S. and Canada, have shot up by 60%.

 Americans' appetite for investment opportunities is helping to spur a building boom in some areas. In Panama, 170 residential-building projects are under way, mostly marketed to Americans, and 100 more are in the pipeline, according to Panama Legal, a law firm based in Panama City.

 

Among them, a 1,500-acre resort and marina by Naples, Fla.-based developer Todd Gates. The project, on Isla del Rey, one of the Pearl Islands near Panama City, is slated to open in 2009 and will have condos, villas and singlefamily homes ranging from $275,000 to $1.4 million. "It's like Florida was in the '50s," Mr. Gates says.

Some buyers are buying sight unseen. Shams Deitrick, a Walnut Creek, Calif., financial adviser, recently bought a furnished, two-bedroom "ocean view villa" for $375,000 in Canto del Mar, a new 35-unit development in the southern Costa Rica town of Dominica; the project has already sold out. "All I saw was the Web site, which showed a sloth 30 feet from the unit, and monkeys everywhere," Mr.Deitrick says.

He snapped up the home on the advice of a gym buddy, who said his own Costa Rican properties have quadrupled in value over the past four years. Although Mr. Deitrick isn't looking forward to the daylong flight to Dominica when he visits for the first time in February, he says he's glad he bought the property: "It just doesn't make sense to buy in the U.S. right now."

 

BARGAINS, WITH TRADE-OFFS

Preston Thompson, a retired Clearwater, Fla., hospital administrator, hopes to make some money in the Dominican Republic as a "serial renovator," moving into homes, fixing them up, and selling them. In

July, he bought a 2,100-square-foot house for $265,000 on the beach in Cabarete, quickly added $50,000 worth of improvements, and put it back on the market for $489,000. If the property sells, he and his wife plan to repeat the process.

Getting the house ready to sell hasn't been as easy as he anticipated, however. Subcontractors were hard to find -- only one firm in Cabarete (population about 15,000) could do granite countertops, for example

-- and the quality of their workmanship was "hit or miss," Mr. Thompson says. Worse, neither he nor his wife speaks Spanish, which made communicating with the workers difficult. He's also concerned that

Americans may be turned off by local health-care facilities, which he says are very modest. For all of its current popularity, he says, the Dominican Republic is essentially still a developing country. "You have to put up with inconveniences," he says.

Earlier this year, Geoff Folsom, a Thousand Oaks, Calif., businessman, bought a 4,500-square-foot oceanfront penthouse, with its own private swimming pool, in Trump's Ocean Resort in Playas de Tijuana, Mexico, a 30-minute drive from San Diego, Calif. He paid $3 million for the property, about half the cost of similar resort units he looked at in the States.

 

 

Property taxes and maintenance costs are lower than in the U.S., too.

There are trade-offs, he says. The mostly undeveloped area outside the development's gates has few restaurants and hotels, and Mr. Thompson is concerned about recent news reports of armed robberies on nearby roads. Still, he anticipates that, as the area develops, appreciation rates will exceed anything he could get in the U.S. "You get so much better value south of the border," he says.

There are additional downsides to buying in this part of the world. The weather can be violent and unpredictable: Last month Hurricane Noel slammed the Caribbean, causing floods and mudslides, and

leaving 147 dead. And insurance to protect against natural disasters, including earthquakes, may be impossible to obtain.

In addition, many foreign real-estate brokers are unlicensed and don't necessarily adhere to the business standards that Americans expect. Some, for example, encourage sellers to raise their asking price after

American buyers have made a full-priced offer, even if no other bidders are involved. Plus, not every place is a boom town. Seasoned real-estate brokers say that to be successful, developments need at least some amenities and should be within an hour's drive of an international

airport.

Cuxlin Ha, an 80-unit riverfront retirement community in Punta Gorda, Belize, near the Guatemalan border, is about 300 miles from the closest international airport, although a small "air taxi" airport is eight miles away. On the development's Web site, house hunters are warned that "this is not an area that promotes exciting night life and wild times (unless you're a jaguar or a howler monkey)." Buyers apparently have taken the hint: Although a three-bedroom, fully-furnished 1,350-square-foot home sells

for only $100,000, only two buyers have stepped up since the project opened two years ago. "People want a more touristy area," says Bob Prehall, the Roseburg, Ore., broker who's selling the project.  But if a place does draw tourists, Americans are willing to travel long distances to buy there. Shaun de Jesus, a San Francisco derivatives sales manager, bought a three-bedroom condo in Punta del Este, Uruguay, three years ago for $120,000, then got a distress-sale deal on a two-bedroom condo in the same town for $90,000 six months later. On the southeast coast of Uruguay, about 90 miles east of Montevideo, the beach town -- which has its own international airport -- has a year-round population of 7,300 that swells with vacationers in the hot months of December and January.

Since he bought the properties, Mr. de Jesus received an offer of $150,000 on the first unit, and $170,000 on the second.

 

 

But he's not selling. Even though he gets down to visit only two times a year, he says he is pleased with the units' low maintenance costs and the high rents they pull in when he's not around. In fact, he's now looking for another good deal. "If something comes up, I'll jump on it," he says.

 

URL for this article:

http://online.wsj.com/article/SB119758837723028177.html

Why Jaco beach Costa Rica real estate is a smart investment strategy!

 My very first published letter as to why it's very smart

to invest in Costa Rica real estate, and especially Jaco beach!

A.M. Costa Rica

San José, Costa Rica, Friday, June 23, 2006 Vol. 6, No. 124

Dear A.M. Costa Rica:

Well I think I was either too sarcastic or not sarcastic enough since I received a lot of emails today asking if I was really leaving Costa Rica after 13.5 mostly glorious years. Would you be so kind as to publish another letter from me?
I will admit that I am a real estate Broker (now, Costa Rica Beach Investment Real Estate), 9 years in the business, mostly in San Jose, but the past few years in Tamarindo and Jaco.  I moved from Tamarindo for a number of reasons, but mostly because as a full time resident, life is much easier when the big city essentials are less than 2 hours away and not 6.

My analysis of Costa Rican real estate BEACH prices is determined by what has happened to other international beach hotspots, enduring various boom-bust cycles.   What determines fair market value in any situation is to check "comps" (comparables) and in this case, those beach communities that can offer to the North American retiree/adventurer a place to purchase for investment, rental income, or a new way of life.

Without delving into lifestyle issues and comfort zones found for the typical N. American seeker, we must first start with travel time from the United States/Canada.  Obviously, the closest places are the Caribbean, (foreign residents subject to island fever) and Mexico, (personal safety issues and lack of 100% title).  We also have to rule out Guatemala, El Salvador, Honduras, and Belize, though each place has something unique to offer for a week or two, to live or invest in these countries for a long period can be perilous.  Nicaragua has been attracting more super adventurers as of late, but I have little respect for Nicaragua's political smarts (oxymoron?). Panama is probably Costa Rica's stiffest competition, but that's still a secret,  and it's too damn hot.  So that leaves Costa Rica as the nearest, safest, easiest to adapt to foreign country closest to the United States for residents and investors alike.
How high can prices go you ask?  Go to google and type in Cancun or Puerto Vallarto beachfront condos for sale.

Try to compare condos that are not in towers that are 20 stories tall (I would prefer a building limitation of 7 stories here in Jaco!).  With Mexico, remember, no foreigner gets 100% ownership-fee simple title and Punta Cancun Beach front Condos, are being offered between $480,000-$700,000.  Are Costa Rican beachfront condos with title worth the same amount or 30% less than Cancun? One can play these games with google with Hawaii (much more expensive), the Caymans (bet there's more former residents of the Caymans living here than the reverse) ad infinitum.

The point is that Costa Rica now enjoys a very favorable image within the United States, Canada, and Europe as both a place to live and as an investment opportunity. Of course buyers have to use their head- booms come and go, as sometimes markets get saturated with product for a short time, but in a world renowned locale, prices are
usually justified and will continue to rise, maybe not as quickly, but comparable to other places. Just remember, this ecologically renowned little Switzerland of the Americas hasn't yet come close to being as famous as other hotspots.  Invest now because prices will continue to rise,  just don't be stupid, check and compare. Thanks for listening.
Jeff Fisher - Broker-Owner 
CR Beach Investment Real Estate,
jeff@crbeach.com  

UPDATE: It's now August 20th, 2007 and Hurricane Dean is close to wreaking havoc  again in  Mexico's resort area of Cancun. Again I am thankful that the Jaco area of Costa Rica receives very little of nature's wrath. Last week we had our first tsunami warning, thanks to the 8.0 Peruvian quake, but this was more a preparation drill by the CR Emergency Services  than the real thing. Less than 2 hours later, the warning was rescinded.

  A little internet research comforted me to know that the last tsunami to hit Costa Rica was in 1854, and it was in the southern region of Costa Rica. Remember, the hills are only seconds away!

 We are often asked what type of natural disasters Costa Rica is most vulnerable to, and the answer for the Jaco area is: some minor earthquakes, occasional minor flooding,(not as severe as tonight's news about floods in many U.S. cities),  but thankfully NO HURRICANES.  The major complaints of most foreigners that live here range from the occasional power outages (how romantic?) and weak cell phone signals (how frustrating!) to the typical rage against government bureacracy and ineptness.  Most complaints have to do with the newest restaurants' prices  for shrimp cocktails!

Real Estate Market Update: Soon we will start the third year of the "boom" for the Jaco Beach area and finally prices are stabilizing after shooting up dramatically.  As friends of mine from Florida and California tell me, the beachfront is still a deal, even at $135 sq.ft. This is difficult for long time residents like myself that remember when..., but I know and experts agree that the Costa Rica real estate market still has many years left before there is a major correction.  There are plans for at least 5 more towers in Jaco, some over 20 stories (they didn't listen to my 7 story limit!), so yes, Jaco's future looks more like Puerto Vallarta everyday.  This can be great for "smart"  real estate investors, and developers, and fun seekers!  Don't like crowds? Live 10 minutes away and it feels like a whole new world, with forests, and mountain breezes!

 What about Baby Boomer retirees? Well personally I would love for some developers to call me and look at those properties that would be perfect for developing Costa Rica's-beachfront-active-Baby Boomer communities."  There is a need for more homes in this area in well designed gated communities at all price points. They can either be beachfront, or close to the beach, or with large lots with fantastic ocean views, but the key words are community. Not just, here- enjoy your community pool and barbecue area, but all kinds of activities; physical, mental, cultural. A community center on the premises with all kinds of classes- spanish, dance, yoga, cooking; wine tastings, sushi gatherings, backgammon, and outdoor areas; for horseshoes, croquet, lawn bowling, putting green, volleyball, etc., etc.   You get the idea, active Baby Boomer activities, who will eagerly come to Costa Rica for six to twelve months at a time, not just six weeks.  After 14 years, I still love living here; call me and let me know what you think.                                                  

  Thanks,

Jeff.  (Happily living 200 feet from the always beautiful, occasionally dangerous waves of Hermosa, 8 minutes south of Jaco). *I also did guess right about Nicaragua...  

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