There are a huge number of developments in Costa Rica and virtually all of them sound absolutely fantastic on their website or when talking to a salesman...
... but are they really a good buy OR a good investment?
Well, that is like asking if the house you bought last year was a good investment... it is if you love it and plan to stay there for the next 10-20 years... but it's not if you planned on selling it in a year or two.
There are good developments and bad
developments... what we are going to attempt to do here is to give you a good idea of some of the guidelines to follow to allow you to judge exactly how good they
are.
Questions to ask yourself AND the developer:
1. is this development a good investment? If so, why?
You should receive good , well documented answers as to the estimated ROI ( return of investment ) AND the answers should not be predicated upon future events
happening. ( for example, the new highway to be
completed in two years OR a new marina to be built OR the new hospital to be buiilt "sometime soon". You wouldnt buy swampland in Florida...don't buy it in Costa Rica either.
2. if you are told that your land can be subdivided
and sold, insist upon proof. I have seen and heard
of salesmen telling potential buyers that they can subidvide their property of 5000 sq. meters ( an acre and a quarter ) into five separate pieces and resell
and triple their money. Well, guess what?... in 90+%
cases the municipality will not allow it...not to mention that you would have to subdivide yourself and
arrange for water and electric yourself. think about
it... can you really do it yourself? Insist upon proof.
3. Sometimes preconstruction pricing and predevelopment parcels can be a great buy...or they can be a nightmare if the developer does not have enough money to complete infrastructure or the land
does not sell quickly enough. Pretty easy to
disappear in Costa Rica. How solvent is your
developer? And how are you protected? Insist upon
answers.
4. Our website has a checklist for buying individual properties... click here. and make sure that ALL of your criteria are met...and make sure that ALL questions are answered THE WAY YOU WANT THEM. Dont accept vague answers that ( for example) "there will be highspeed internet within a year...after all the new CAFTA agreement mandates it" or " the new hospital is coming within the next year"...please realize that this is Costa Rica and progress and change happen VERRRYYY slowly.
5. Can a portion of the funds that you are buying the property with be held in escrow to ensure that the
infrastructure is done? Sometimes yes, sometimes no.
You know which answer is best here.
6. Referrals...get them. And ensure that you talk
directly to the people and ascertain that they got precisely what you want to get in terms of answers and results.
7. this is a tough one...if you are buying for investment...are you overpaying? What is the current market and why is this property likely to appreciate?
Do you know who the competition is and what they are selling for? Face it, if a salesman is involved he gets a commission...and if product is being sold via bulk emails or TV ads...you can almost be assured that
markups on the land are huge. And if you are buying
a ready made product such as land AND a home...are you sure that $75 per sq. foot for construction is a good deal?...do you know what construction costs REALLY are?...maybe you should.
8. If you are buying in a "popular" or well known area
how is the infrastructure? Can it truly handle the
increased traffic in the area. Jaco, for example,
has an unsold condo inventory of over 2000. And the
water and infrastructure is getting worse by the day.
Many areas in Guanacaste are not giving out building
permits any longer. Dont be a victim here. Insist
upon proof that you WILL get what you are buying.
the bottom line here...do your homework ...and ensure that you are buying precisely what you THINK you are buying...
If you are buying a piece of Costa Rica and are buying the piece strictly based upon emotion and someone else's promises...SLOW DOWN! Do not be pressured into buying...the land or property will still be there
after you do your due diligence.
oh, one other thing. A reason why you dont see more negative publicity about specific developments...there are severe libel and slander laws in Costa Rica...facts that are made, whether warranted or unwarranted...can be grounds for major lawsuits.
This is why you will never read about XYZ development having a bad reputation. I have been threatened and offered bribes and I have not even mentioned names.
You need to do the work yourself.
thanks for reading...
Randy
www.cr-home.com
www.lasbrisascostarica.net
www.ventanaspacifico.com
oh by the way, with all of the negative publicity about "greedy" developers, etc. you might want to ensure that the developer of your choice , in fact,
has his permits. If he doesnt...RUN.
