A Piece of Paradise Can Be Yours

The property experts agree: Real estate in Costa Rica is a good investment, and the market is heating up.

"Where else in the world can foreigners come to a country with no soldiers, a government that caters to investors and fee-simple real estate with no restrictions and where foreigners are entitled to the same ownership rights as Costa Rican citizens," points out Chaud Oskar Byers, a licensed realtor in Costa Rica for the past 31 years.

According to Robert F. Davey, Century 21 Marina Trading Post owner with offices in Flamingo Beach, Tamarindo, Jacó Beach and San José, "Costa Rica has proven attractive to investors for its relatively open investment and trade policies, as well as for being the most politically stable country in Latin America."

This peaceful little country, sandwiched between the Pacific and Caribbean coasts, offers potential buyers a wide range of choices: Developed and undeveloped mountain and coastal properties, forests and ranches, hotels and eco-lodges, city apartments and country cabins, beachfront condominiums and farms producing vanilla, pepper, coffee, orchids and lumber...even European-style castles are available to those with the means.

"Real estate prices have been flat for several years now, making it a great opportunity to take advantage of the investment potential of Costa Rica," Davey said, adding the country is currently recovering from a three-year recession in the wake of a tourism and development boom in the early 1990s.

Davey, a veteran 10-year realtor in Costa Rica, said signs of the market turnaround began in early 1998, and continue on the upswing. "Pre-bookings for hotels and rental properties are in the upper 80-percent range for all of 2000. The aggressive marketing plan of the former tourism minister is showing strong results, and the new international airport at Liberia on the Gold Coast region of Northern Guanacaste is busy with commercial and charter aircraft traffic," he said.

"Many North Americans and Europeans have relocated to and or invested in Costa Rica, and the signs of a strong reemergence of investors is here now," Davey added.

What's Available in Costa Rica

"The biggest change in the real estate market during the past decade," said Chaud Byers, "is that prices dramatically increased as Costa Rica became more and more an international community...prices have doubled, or tripled, from 10 years ago."

Property prices range considerably. A 1/4-acre beachfront home-site ranges from $40,000 to upwards of $200,000. Beachfront homes range from $165,000 to more than $3 million, and seaside condominiums range from $54,000 to $250,000 or more, depending on size and location.

"Just inland, maybe a 10-minute walk to the beach, two-bedroom, two-bath homes start at $35,000 and single-family lots start at $6,500," Davey said. "View lots start at $25,000 and view homes at $85,000."

But the inexpensive land deals Costa Rica was once known for are a thing of the past, although particularly good deals on property may still be found at the public land auctions announced in the official publication of the Costa Rica government, "La Gaceta," Byers said.

Other inexpensive deals can be found in more remote areas, such as the northern Osa Peninsula in Costa Rica's southern region.

Alexander Del Sol, who owns property and has been living in the southern zone for more than five years, says: "Down here, some areas have already seen property values go up by 300 percent! Not in the northern Osa Peninsula, however. The pressures are building, fincas are going up—and selling—but you can still get a fabulous piece of property with public electricity, year-round spring water, ocean views and sometimes even a house for less than it would cost you for a one-bedroom condo in California," he points out.

"For example," says Del Sol, "Fifty acres of rainforest/open-field mix, entrance on the main road with electricity, two streams, level building sites on a bluff and on the beach, panoramic gulf views, etc. How much? $120,000. But the seller is hungry..."

Popular Places

Most realtors agree that the best turnover and fastest-selling properties are generally located in the Central Valley, and along the Pacific coast.

Although the Central Valley covers only about five percent of Costa Rica's land mass, it contains the bulk of the country's population. Thus, it should come as no surprise that property prices around the greater metropolitan area (including San José, Alajuela, Heredia and Escazú), where many of the country's businesses and services are located, tend to be some of the highest in the country.

"A standard rule of thumb is the farther away from town you go, the lower the price of property," says longtime resident Christopher Howard, author of The New Golden Door to Retirement and Living in Costa Rica.

The exception to this rule, of course, is the central and northern Pacific coast, where a number of major developments are underway.

Coastal Properties

"Beach property along the Gold Coast where we work has proven to be a sound investment," says Donna Osborne, vice president of marketing for Coldwell Banker Affiliates of Central America. Osborne and her husband Jack own Coastal Properties Coldwell Banker offices in Flamingo, Tamarindo and San Jose. They have worked full time in real estate and development in the western Guanacaste area for the past 11 years.

Many foreigners come to Costa Rica wanting to buy beachfront property, a little piece of tropical paradise they can call their own. They should be aware that coastal properties are governed by different, and more complex, regulations than other properties.

The area comprising the first 200 meters above high tide mark along Costa Rica's coastlines is called the Maritime Zone. The first 50 meters are owned by the public, overseen by the government, and are inalienable.

The remaining 150 meters of land is known as Concessions Property, and can be leased from the corresponding Municipality. Foreigners who are not residents are restricted to a maximum of 49 percent ownership of leased beach properties. The remaining 51 percent must belong to a Costa Rican national or resident, or a Costa Rican corporation," Byers said.

Davey said about 95 percent of Costa Rica's coastal properties are land that comes under this law. An elite five percent or so of coastal land has ownership dating back as far as the era of Spanish land grants. This small percentage is fully titled and not subject to concession law or regulation.

"This five percent, obviously, has a higher value and is highly sought after," Davey said.

If you purchase a concession property within the Maritime Zone, you must make payments to the local Municipality, who also governs the coastal zoning and building regulations, along with the Costa Rican Tourist Board (ICT), the Ministry of Public Works and Transportation (MOPT) and others.