Investing in Costa Rica – Not Exactly What You Think
There are many reasons for investing in Costa Rica, and many smart people have already seen returns on their investments in this paradise country. There many reasons why investors have chosen Costa Rica as the place to make their fortune, as well as to retire, and this article will highlight the ins and outs of investing in Costa Rica.
Reasons for Investing in Costa Rica
- Costa Rica is the country with the longest running democratic government in Central America. The government is extremely stable and they are allies of the United States.
- Costa Rica has set aside almost a third of the country as protected areas, national parks, and wildlife reserves. Costa Ricans strive to protect their precious flora and fauna.
- Costa Rica’s literacy rate is higher than both the United States and Canada
- A socialized medical care system supplies care for everyone, even those who cannot pay for it
- As a vacation destination, Costa Rica has a higher return rate for visitors than any other country in the world
- The economy in Costa Rica is very stable
- There is no standing army in Costa Rica, saving the people’s money for other government programs
- The pace of living in Costa Rica is laidback and slower than in the United States
- Costa Rica places a lot of emphasis on family values, and many extended families live together or very near eachother
- Costa Rica is full of microclimates. In just a few short hours, you can see beaches, rain forests, cloud forests, mountains, rolling fields of coffee plants and sugar cane, waterfalls, hot springs, and even volcanoes!
- The cost of living in Costa Rica is significantly less than in the States
- About 30% of the population in Costa Rica can speak or understand some English
Tourism Arrival Facts for Costa Rica
So those are some of the main reason people are investing in Costa Rica. However, we have even more facts that prove that Costa Rica is a sound investment opportunity:
- From January to June in 2008, Costa Rica received over 125,000 visitors. This number increased by 16% in 2009. And remember, this is while most of the world’s economies are in recessions.
- The number of weekly and daily flights from the United States to Costa Rica is steadily growing, and many airlines are adding flights to Costa Rica’s second largest airport, the Liberia International Airport in Guanacaste, in addition to their flights to San Jose.
- Visits from Americans and Canadians make up about half of all the tourism in Costa Rica. Europe follows at a close 20%. The tourism market, as well as the real estate market, are not dependent on just one country. Visitors and buyers come from all over the globe.
- The key areas of interest to expats and Baby Boomers are small (mostly beachfront properties and suburbs of the Central Valley), and there are clearly more buyers than sellers, making it a good market to invest in.
Why are Baby Boomers investing in Costa Rica?
So now that we have our facts in order, and we’ve proven without a doubt that more visitors come to Costa Rica every year, we need to formulate an investment plan of action. This investment plan is centered on the flocks of baby boomers who are just now reaching retirement age and are looking for properties abroad. Here are a few of the main reasons the baby boomers are coming here:
- The low cost of living in Costa Rica
- The inexpensive medical care
- A never-ending supply of things to do and see, including natural beauty, adventure tours, sightseeing, and sports
- The steady government and economy
- The proximity to the States
- The general friendliness of the Costa Rican people
- Clean, drinkable water
- A safe banking system
- Unrivaled natural beauty and biodiversity
- Very affordable construction and labor costs
- Low crime rates
Investment Strategies that Allow for High Returns
While you would think that beachfront property is the end-all be-all of investment property in Costa Rica, you’d be sorely disappointed. In fact, more than 50% of the people that purchase beachfront property sell it within 5 years. Statistics and research have discovered that most expats settling in Costa Rica prefer the following things:
- A good amount of acreage
- Great views of either the ocean (from a distance) or the Central Valley
- Quick and easy access to medical services
- Not too far in the middle of nowhere
- Proximity to good shopping centers and restaurants
- Internet access
- Less humid, more temperate climates
- In a more rural setting, but with amenities only a short drive away
- Within a “reasonable” distance from one of the two international airports
- Some privacy, but not completely cut off from civilization
- At least half an acre of land
- Rivers, lakes, or waterfalls on their land, if possible
- Fruit trees and flowers
Around 80% of the Americans moving or retiring to Costa Rica choose properties with the aforementioned amenities, so finding a property with as many of those things as possible is key when trying to make a well-educated and smart investment.
North American Construction vs. Costa Rican Construction
It is a truth universally acknowledged that there is a massive lack of “American style” housing in Costa Rica. This is due to many factors. First, Ticos trying to sell their houses to Americans can wait until they find someone willing to pay whatever price they’re asking. They are not rushed to sell, so they have no need to adjust their prices. Second, remodeling a Tico house to reflect a more “American style” is almost impossible due to the construction methods of most Tico houses. They are built with concrete, and most of the electrical work and plumbing has been cemented in. In fact, it’s actually more cost-effective to build a house from scratch than to attempt to remodel a pre-existing home.
- The lack of “American style” housing is a market niche just waiting to be filled, making any homes built in that style an extremely sound investment
- Great deals on existing “American style” houses can occasionally be found, if you look in the right places. These homes can be purchased and lived in or purchased and re-sold for higher prices
Hopefully this article has peaked your interest in investing in Costa Rica. There are many different real estate companies and professionals that can assist you in making smart investments in Costa Rica. Escape Artist has been helping expats, investors, retirees find what they are looking for in Costa Rica. If you are interested in investing in Costa Rica, you can call our toll free number 866-403-1345 or contact us here.