Over the past several years many investors, whether by design or by accident , have made extraordinary gains as more and more vacationers and “baby boomers” flocked to Costa Rica. Everyone “knows” about the beauty of Costa Rica and the friendliness of its people…and people continue to revisit Costa Rica at an extraordinary rate. People just keep coming back, time after time!
However, fast forward to the present.
There are 2500 unsold condominium units in Jaco Beach alone…there are at least 25 development projects that have been halted and closed because of lack of buyers and lack of cash flow. The realtors along the pacific coast say that they have never seen it this bad and buyers simply are not even looking.
So, how can real estate be a good investment in Costa Rica in the present day?
To answer that question , we have to go inland…to the Central Valley, on the outskirts on the country’s capitol city, San Jose, to get a better overall pictures of investments…
Many baby boomers are NOT buying on the beach simply because it is far too expensive for many…because of the hot, humid weather AND because of the lack of amenities. They are turning inland to the mountains which feature lower prices, better temperatures, better vistas and more convenience.
So, what does this mean for investors?
In a nutshell, it means that the baby boomers, for the next several years, will basically contribute and, in fact, be a huge factor, in a supply and demand imbalance for land and homes. To give an example:
There are very very few American style homes in the area described above which are in the $100-200,000 range. THESE HOMES ARE IN HUGE DEMAND AND NO ONE IS FILLING THE VOID.
Why not? … well, everyone talks about it and a few are doing one , maybe two a year but no one is doing it on a consistent basis.
The margins are much better than in the States or Canada…typically around the 50% level …sometimes more. Risks are low, almost non existent IF you can control costs and know how to price the land and the construction.
SO…WHY IS NO ONE DOING IT?
There is no easy answer except to say that most “gringos” ( non Costa Ricans ) do not fully understand the markets here and do not realize that the real estate markets here are much much simpler than in the States or Canada. Those who do take the time…are making money.
If you wish to continue to explore opportunities in Costa Rica for investment…it may take a trip here to confirm the overall markets and their feasibility for yourself…but it is worth it.