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The world economy and its effect on Costa Rica real estate

 

Costa Rica economy illustrationWe receive a lot of questions from our clients, from all around the world. How is the Costa Rica real estate market doing? what are people buying? Where are those people coming from in general? In which areas do people prefer to invest? There's different factors that affect our real estate market, and I am not a professional economist, but let me only give you my personal opinion on that.

Most of our clients come from United States, Canada and Europe, and a small portion come from Central and South America. The currency is a factor to consider as everybody else except Americans have to change their money into US Dollars. Of course, when the Euro was 1.37 for a US 1.00, the timing was better for Europeans to invest in CR, as well as when the Canadian dollar was on par with the US dollars. Stock market is another factor; if people lose money, they have less to invest. Inflation/deflation is another one, and the list goes on and on. So why are people still buying with the actual market
 

1. Currency is paper, and worth whatever the market decides its worth. If there's a risk of a crash in the market, people think investing in gold, silver and..... real estate! it's tangible and lasts. You can use it, you can rent it, you can resale it. It is something you own. 

2. They are looking for a return on their investment, bigger than what they get at the bank. If you buy a property walking distance to the beach and/or with an ocean view, you can rent it and make money off of it. How much? It depends how much publicity you do, what the property looks like, what kind of pictures you have on the web, etc. Most likely, if it's well managed, well publicized, if it looks good/clean and if the location is good, you will get around 4-5% net out of the property value. If you manage it yourself, you will get more. Just saying that at the bank in the States and Canada, you are happy if you get an annual 1% right now... and your capital will definitely stay the same!

3. Some decide not to rent, and just come and enjoy good time in Costa Rica. No need for a booking in advance, you can just book a last minute flight and be home the day after! (that's one of the main reasons why I bought my house!)

4. They are looking to make money without paying too much in taxes. In Costa Rica, there's no tax on capital gains. That being said, depending on your citizenship, you might get taxed in your country but won't be taxed in Costa Rica. 

5. They are looking for a place TO MOVE. Why? because life is good here! We have an International School within 15 minutes from Tamarindo (www.criacademy.com) with very good education, good weather 12 months per year, organic farms around town, almost zero pollution and a big expats community where everybody shares the same taste for a beachy and tropical lifestyle! We also pay only between 10-30% taxes on income (10% on the first US$ 100,000), which is much lower than all other countries. People are moving abroad!

So overall, the more things that go wrong around the world, the more people we have interested in buying real estate in Costa Rica! Here, there's no gold, no oil, no diamonds, no army, nothing to steal and fight for. We are a peaceful country with a strong economy and there's food available year round. I wish that all other countries had a better government and a better life. In the meantime, if you think investing, moving, relaxing in a foreign country with beautiful landscaping and natural resources, Costa Rica might be the place for you! let us know, we'll be happy to help you make the move!

Our office covers from Playa Dante down to Playa Marbella. We have the best beaches of the country and the best surf areas as well! We have 1.8 millions tourists per year in Tamarindo area, I guess people like it :-)

Isabelle Emond, Broker/Owner of Remax Ocean Surf and Sun