Many people want something for nothing, and in the current real estate market, bargains have become scarce because there’s no shortage of buyers. Many foreigners living here have discovered that the surest way to make a good living is to invest in real estate. While prices seem to be going up everywhere, obviously we all want a great deal. The best bargains fall into one of several categories:
1. Stupid or desperate sellers. Sometimes sellers want money NOW and can’t wait a few months to get the market price for their land, and will sell at a stupidly low price. Just a few months ago, one seller sold a large ocean view farm in Malpais for around $7/m2 when the value should have been $20-30/m2. These types of opportunities are rare and when they come in they sell within hours or days, so check with your favorite realtors frequently. Have your money ready in a Costa Rican bank account and let your realtor know that you are ready to buy immediately when a good deal comes up, and tell him or her to call you first.
2. First lots in a development. Often a person who is creating a development will sell 1-4 of the first lots at a reduced price in order to generate quick cash to pay for the roads, electric lines, wells, and water pipes. These deals are great and you should tell your realtor that you’re interested if something like this comes up. Question him or her about upcoming developments and try to find out if you can buy a lot cheap by buying early. You can sometimes get the best lot doing this, making it easier to resell.
3. Unimproved land. sometimes a seller is too lazy, doesn’t have enough cash, is uneducated about the market, or is simply too stubborn to make a few simple improvements on a piece of land or house that would greatly increase the perceived value. For example, we have a great lot for sale now that has trees blocking much of the view. If the owner just trimmed some of the lower branches on the trees, the view would be opened up underneath them, creating a stunning panoramic view and the property would sell immediately. Most buyers make emotional decisions about whether they like a piece of land or not and this mostly has to do with the view. If you want a deal, think with your head, not your heart, and realize the potential a property may have, not what it looks like at the moment you’re seeing it.
4. Access Issues. There are areas nearby in which access is difficult. For example, the road between Cabuya and Malpais is an impassible, washed out, muddy mess throughout the rainy season, and few people would buy a property along parts of this road when they can’t even drive to it. But, this road will eventually be improved and maintained year-round. Property values on this road
are often cheap, so if you’re willing to wait a couple years to have year-round access, then buy this land at a bargain now. There are several areas with bad access that have good prices. You can often even save enough on a piece of land that it makes sense to improve the road yourself.
5. Utility Issues. By buying a piece of land that requires work and isn’t easy you can save a bundle. Generally speaking, most buyers don’t want a piece of land that doesn’t already have public water and electricity. If you want a deal, don’t think like most buyers. If you’re willing to live off solar electricity and a well, then you can buy a property significantly cheaper, and wait for the utilities to come to you.
6. Pay Cash Now! One great way to get a property cheap is to make sure you have all the cash ready in a Costa Rican bank. Then, offer to pay the money immediately for the property, rather than going through the usual escrow with all the delays. To do this, you either have to have a lot of guts, or just make sure you and your lawyer to all your homework on the property in advance before you make an offer. Some sellers will give you a great bargain if the entire amount will be in their hands in a day or two. In this case, you can also have the sales contract prepared in advance, and offer to drive the seller to the lawyer immediately to complete the sale, giving him or her little time to think about it and possibly change his mind about the price or whether they want to sell at all.
7. Buy away from the beach. Everyone wants a property right by the beach or with panoramic ocean views, but you’re unlikely to get a great deal by following the masses. Some of the land that has appreciated the fastest in the past two years is land that’s 10-15 minutes from the beach. Some of this land has gone up 5-8 times in two years! Look in areas such as San Isidro, Santiago, Betel, or along the “Pura Vida Road” between Montezuma and Tambor to find cheap land with a short drive to the beach, lots of beautiful trees, a cooler drier climate, and at a much reduced price, and in a few years you’ll see a huge jump in the value.
8. Make friends with Ticos. There are several prominent and wealthy Tico families in the area who have grown rich selling their land and have more money than they’ll ever need. Many still have extensive land holdings, and for them, quality of life and having great neighbors is more important than money. Get to know these people and they may sell you a small lot cheaply if they like and respect you.
9. Untitled land. In the last issue of Que Pasa, I wrote about the dangers of buying IDA land. I certainly wouldn’t recommend it, but people do it and sometimes get a great deal without losing all their money. There’s another type of untitled land that you can buy, called “Informacion Posesoria.” This class of land has been occupied by an owner for a long time without getting it titled. You can buy this land and build on it while waiting for a title, but you must get the signatures of the neighbors that border the land. If they contest the borders, it can end up in court for years. Generally, this land is much safer than IDA land to buy, but still not as safe as titled land.
10. Ask everyone you meet. You can find a great deal in an unlikely place. from a taxi driver, a kid on the street, or a waitress. I pick up every hitchhiker I see and ask them about land. Sometimes you’ll meet someone who has been thinking about selling but hasn’t listed their property with realtors yet and will sell to you directly. Being shy isn’t going to help you discover a great deal.
As you go about building your own personal real estate empire, please remember that if you’re a foreigner living or investing here, you should act in a way that expresses gratitude to the Costa Rican people for allowing you to be here at all. Not every country allows foreigners to come in and buy up their most beautiful places. Act like the guest that you are. Find ways to give back to the community and work to protect and improve the environment, and your experience in Costa Rica will be richer and more rewarding. Tropisphere Real Estate donates regularly to local conservation organizations and social projects such as improving schools. If you have a successful business in the area, join us to help improve our community. Contact me to find out what you can do to help.
Geoff can be reached at: email@example.com