Where is Costa Rica Located?
Costa Rica is located approximately ten degrees North of the Equator, on the isthmus of Central America. Costa Rica is bordered on the North by Nicaragua, on the South by Panama, on the East by the Caribbean, and on the West by the Pacific Ocean.
Is it safe to invest in Costa Rica? Is the government stable?
Costa Rica boasts one of the longest standing governments in Latin America. Formed in 1949, the government has no standing military and places the highest importance in conservation, education, and the health of their people.
Is the economy stable in Costa Rica?
Yes. According to the US Department of State:
Costa Rica's economic performance has been strong over the past 18 months, with growth higher than expected, reports the International Monetary Fund (IMF). In an August 3 (2006) statement, the IMF said Costa Rica's vibrant economy is the result of sound economic policies, strong external demand, and favorable conditions in international capital markets.
And according to the World Bank:
Costa Rica is one of the most stable and robust democracies in Latin America . . . with a healthy economic growth rate . . . and some of the best social indicators on the continent.
Are there good business opportunities in Costa Rica?
Yes. An influx of U.S. business has caused real estate values to appreciate rapidly. Real Estate and Development is the fastest growing industry in Costa Rica. American companies, such as, Proctor & Gamble, Merck, Pfiser, and AT&T, are just a few of the major business entities whose current and future investments clearly indicate that additional properties for commercial and residential development will be in demand. Thousands of U.S. companies have seen fit to invest hundreds of millions of dollars already and more is being planned for the future.
Is the Costa Rican government friendly to foreign investors?
Yes. Costa Rica provides complete anonymity for foreign investors. Investors pay no capital gains taxes on real estate. Business taxes are minimal. Property taxes are about a tenth of the taxes in the U.S.
What is the infrastructure like in Costa Rica?
Very good. There are several world class hospitals with US trained doctors and state of the art equipment. Unlike most of Central and South America, the public water is clean and safe to drink. The public transportation system reaches across the country and is clean, efficient, and affordable. Two international airports serve Costa Rica, the main being San Juan Santa Maria in Alajuela near San Jose, and the newest being Daniel Oduber in Liberia. Both airports offer several non-stop flights from many hubs in the States. Broadband (high speed) internet is now widely available across the country. Roads and highways are plentiful and regularly repaired, and most roads have frequent signs with distances and directions to the next cities or landmarks.
What is the cost of living in Costa Rica?
Considerably less than the States, and many middle and working class people have retired here very comfortably. Services such as electricity, phone, internet, cable, water and garbage are much less than in the states, and depending on the area you chose to live, land and housing costs will be much less than you are used to. Food prices vary, but if you like fresh fruit and vegetables, buy staples such as rice, beans, chicken and bread you will find prices to be vary affordable. Imported goods such as US cereal brands, snack foods, and gourmet foods do carry a premium, but with the plentitude of good local food you shouldn’t be wanting.
What is the climate and terrain like in Costa Rica?
One of the greatest aspects of Costa Rica is the rich and varied climates and terrains. From misty cool green mountains, balmy white sand tropical beaches, to vast arid plains for ranches, Costa Rica has something for just about every taste. There are just two seasons here: rainy season (also called green season) and dry season. The sun makes an appearance most days in either season, and even in the peak of the rainy season the rain comes like clockwork.
Owning Property in Costa Rica
Can non residents own property free and clear in Costa Rica?
Yes, non-residents have the same legal rights as residents when it comes to owning land in Costa Rica. When looking at a property to buy it is important you have your lawyer to a thorough check with the Registro Nacional to make sure the land is titled and free of liens and disputes.
I heard that land in Costa Rica is untitled, is that true?
Yes and no. The Costa Rican government has set aside over 25% of the land for public use such as national parks and conservation areas. Additionally, beach property within 50 meters of the high tide line is public property, and often an additional 150 meters are managed by the municipality and can’t be built upon without concession rights from the government. Also, some areas have murky titles and although land can be purchased it may be a timely, difficult, and expensive process to attain clear titles. All in all, over 40% of the land in Costa Rica is private property with clear titles.
Is financing available in Costa Rica?
Yes. Many sellers are open to offering financing options to potential buyers, and both local and international banks offer the types and terms of mortgages you may be familiar with from the States. Costa Rican banks will offer loans similar to what was offered in the States 30 years ago: although they are relatively simple they may have big down payments and a limited selection of terms. Alternately, you can receive financing from one of the many Multinational banks that have branches here in Costa Rica.
Is Real Estate a smart investment in Costa Rica?
Yes. Land and homes appreciate in the U.S. based on demand and availability. If you buy a home for 200k and a neighbor sells a comparable home for 250k, your home will effectively be worth 50k more than you paid for it. Unfortunately, your home would most likely be re-assessed and your taxes would increase. In Costa Rica for more than 50 years, property has been held as an asset of an S.A. Corporation and therefore not re-assessed as the result of a transfer of ownership. In the last five years property values have increased 30 fold and are expected to continue to increase dramatically as U.S. industry, tourism, and retirement surges.
What are the real estate opportunities in Costa Rica?
Many people are enjoying the capital gain from their real estate in the U.S. and Europe and are moving money to real estate in Costa Rica: buying retirement homes, second homes and condos, especially in the Miramar area, a mere 30 minutes from the coast. There is a boom in beach front property purchases that will continue for at least the next five years.
What should I keep in mind when developing property in Costa Rica?
Several things should be kept in mind when considering lots or land for investment:
1) Infrastructure: Make sure all infrastructures are pre-installed. Water, electricity, sewage or septic tanks, phone, and internet can be difficult and timely to install; and having these utilities, especially phone and internet, will increase value when you resale.
2) Beautiful Natural Settings: The property should showcase the natural beauty so abundant in Costa Rica. The lot should have an ocean, green valley, or city views; be mountain property or in jungle setting. It should have a serene stream or better yet a waterfall. Regardless of the natural setting, you should plan to landscape the finished property with tropical flowers that attract the many hummingbirds and butterflies that live here in Costa Rica.
3) Good Climate: Temperature will be a big player in the marketability of your property. Many retirees plan to live at the beach when they move to Costa Rica, but soon realize the heat and humidity are too uncomfortable. Buying mountain property off the coast will have the advantage of both beautiful ocean views and cooler mountain climate.
4) Privacy: Look for lots that are secluded from neighbors. Hills, bends in the road, woodlands, and changes in elevation will provide natural seclusion without having to build unsightly and expensive fences.
5) Accessibility: The community should be accessible to services such as health clinics, banks, post offices, markets with imported groceries, veterinarians, close to a major provincial city, and within a few hours of San Jose and the international airport.