www.CostaRicaTicas.com

We certainly disagree. I maintain that my statement was accurate. “The guys who invested years ago are okay. They have learned the rules and they probably purchased when there were good deals. There are no good deals today.”

If one searched and searched maybe one could find a good deal. But taking time to search is a cost and an expense as well. The three bedroom, two bath condos in a gated community for $25,000 are long gone.

Jsmythe23 has an important point, he has “owned a place for a number of years”. That substantiates my point. He has learned how to manage the unique specifics of rental properties in Costa Rica.

But a person new to the market would find it significantly different. There is a serious learning curve because the laws are so different from the US and defy much of what you know based on your exposure to US real estate laws.

Another issue is TAXES. The luxury home tax raised the taxes on my CR home to exceed the taxes on my home in California. The two homes are essentially of the same value in USD but the CR property taxes are more. California is supposed to have one of the highest property tax burdens in the US.

The regular CR municipal taxes are not very expensive but when added to the CR luxury home tax, my total CR tax bill exceeds my CALIF taxes.

In addition, the new added luxury home tax which does not go toward improvements in roads, better schools, improved police and fire service, or usable parks and libraries. So if you have K*ds, you have to send them to private schools; if you have property you have to have a security guard service, an alarm or both; if you want to go to a decent park you have to join a campestre; and so on.

If you have a rural property you have to concern yourself with squatter’s rights and the legal ability of a squatter to move on your property and effectively seize it unless you pay to have it guarded.

I am glad it is for you but for me it is not a good investment anymore.

Well Diego, I will agree that it's true that there are no good deals out there for you, but that's only because you don't believe there are. I have friends who recently bought a small B&B near Jaco for half price, I have another friend who is selling some lots for below what he paid for them 6 years ago, these are super undervalued by todays standards. Ironically, I'm actually looking at re-investing in Costa Rica because I have heard of some really good deals and I'm pleased with the work they've done on the roads and getting the crime rate lower. There are thousands and thousands of people selling in Costa Rica, there are hundreds of different circumstances, distress sales, people that can't make the final payment on the units they bought, people that don't realize the true value, foreclosures, people forced to move back to the U.S. or elsewhere for a variety of reason, people who need cash bad right away. There are hundreds and hundreds of below value deals and some for a fraction of the regular price for a variety of reasons.

You don't have to search and search to find good deals, and if you are not willing to invest some time and effort in getting the best deal possible for you then you shouldn't be investing in real estate in the first place. As far as squatters go, it's a very, very rare problem and is very easy and inexpensive to fix. I also don't think too big of a group from this site would be considering large, rural land purchases in isolated parts of the country. I think most would be looking at popular tourism areas that are pretty well developed.What difference does it make when someone learns about "unique specifics in the real estate market"?, you do your research the right way and you learn. I've invested in 3 countries now and in each one I was at one point a total newbie. You find someone that is doing what you want to do and buy them dinner or hire them as a consultant and within a short time and some follow up research you have a pretty good idea of how things work.

As for the Luxury Tax, you can avoid it all together by buying a property for under $180,000. If you want something more than that I believe the Max tax rate for this is .55% which is really not that much compared to other countries. In your example of your house in California, I'd also like to ask what your electric bills are in addition to your homeowners insurance and how much repair work etc. costs. Don't get me wrong, I'm not saying investing in Costa Rica is easy by any means or that it's a perfect scenario- it most definitely is not. What I am saying is that you can't make a blanket statement that there are no good investments there or that nobody should buy there. There are people buying there everyday who are going to make money and enjoy their purchase and there are people buying everday who are going to lose money and have big time regrets. There is no all-good or all-bad.

My understanding was that compared to the good Ole U.S.A., it was risky to buy land / homes in C.R. I will just address a couple of issues; Squatter's Rights are codified in CR Law, and the U.S. Embassy has posted warnings about it, and I have heard from reliable sources that the process to remove them is expensive and litigious. You also list as a positive the fact that a lot of people, gringos included are losing their shirts down there and get readily unload the properties, with the possible exception of having a half price sale. Again, in relation to the U.S. buying in CR is much higher risk.

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“Good people sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf.” And we are the guys that keep them in Eggs & Grits

As I mentioned the squatter's situation is extremely rare and there are companies that will do a sweep and establish owner priority for about $80 once a year if you are concerned. I also mentioned that very few of the people reading this forum would be the type to be buying isolated large tracts of raw land, but yes- buyer beware if you are.

As to people losing their shirts etc., how many lost their shirts in Florida real estate the last 3 years?. Besides this there are many reasons people sell undervalued that have nothing to do with Costa Rica, illness, relocating, financial problems etc.

Not even sure why we're having this discussion, I'm not arguing the point that it's easier or less risk to buy in the U.S., as all I'm saying is that there have been and will be a lot of people who make money and do well with property in Costa Rica as opposed to the OP assertion that nobody should invest there. To each their own but I would invest in CR ten times over the U.S., if you stay under $180,000 your taxes are extremely low, your insurance is next to nothing, your repair costs etc. are a fraction of the U.S. and if you pick the right area you can have excellent short-term rentals that exeed those in the U.S. both in terms of price and volume.

Again, if the squatter situation is extremely rare, why would the embassy specifically post a warning about it? And if it is so rare, why have there been many stories posted about the dangers of leaving land or houses unoccupied? I have heard personal annecdotes from at least a dozen former landowners in CR about the dangers of squatters.

In the interest of full disclosure, do you own or sell or rent property in Costa Rica?

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“Good people sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf.” And we are the guys that keep them in Eggs & Grits

Both extremes of "Never buy real estate" and "You should buy" are equally ridiculous. Due diligence is required as in any transaction here or anywhere else. Guys get burned everyday looking for the "easy" money. Reasonable people that build or buy here after doing their research are generally ok. I get a good laugh from both sides on this matter.

Never said, never buy, but said that there is very high risk to buying that really do not exist in the U.S. Just a buyer beware situation that make it more advisable for most people (who are unsure that they will stay) to rent rather than buy. Still, this thread is nothing if not informative.

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“Good people sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf.” And we are the guys that keep them in Eggs & Grits

Definitely informative! And if nothing else, it stick in the back of readers' minds if and when they consider buying in the future. Agree totally that it is definitely advisable to rent for quite a while before buying.

Tim,
Do you personally know of anyone who has had their land squatted in CR? Would love to hear about it.

Did you know that squatters have rights in most states of the US. Squatting is codified law in almost all states (including Florida)

I have owned more than one property in Costa Rica and many in the USA. My concern is quite different than just resell value. Apart from resell value, there are so many other differences.

My main focus is for wide eyed Newbies and guys that are here sparsely a few times a year not to have any disillusions. Buying here is NOT THE SAME as buying a vacation home in Florida for example. I do have investment property in Florida and it is a pleasure to own compared to here.

Don't buy here unless you are ready for an experience. Owning in Costa Rica is not comparable to owning in the USA.

Newbies don't need to sit at the Sportsman Lodge after a few good sessions on their first visit and start thinking they would like to OWN a home here.

If someone is here for the Girls, or for the Trannys for that matter, then focus on that. There is no need to start thinking about an INVESTMENT here. People need to know the difference between a place to live and an investment. These two are usually homogenized in the USA but should not be the default thinking in Costa Rica. A HOME DOES NOT NEED TO BE AN INVESTMENT.

Guys don't need to be stepping on each other to fight for a Condo in Jaco. That was the situation in 2006 when I first came to Costa Rica. That creates a seller's market and defeats the purpose of coming here. You couldn't sit and relax at a table at the Del Rey without someone discussing "what a condo in Jaco cost".

Example. Instead of 10 of us OWNING a condo in Jaco, maybe two can own and the other 8 can rent it from the two

The majority of us guys come here because we need the girl and the girl goes with us because she needs us. We are tolerated because the country needs our return commerce. Once you are locked in , there is a lot less need. I watched this happen with people from Mexico who bought homes in the USA during the economic boom. As soon as we did not need them, they got treated a lot worse.

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* These are the "Good Ole Days". Enjoy Them.

* RENT but, "Don't Buy a Home in Costa Rica" until you have lived here for THREE years.

I do not sell or rent any property in Costa Rica. I don't understand why you see the need to pick at issues that don't really have relevence to the board here ie. squatting, it affects almost no one on this board. Almost all the members here who would consider buying property in C.R. would most certainly be buying in tourism or developed areas where squatting would be a moot point. In my previous post I said buyer beware for any people that are considering a rural, isolated property that they will not be spending much time at. I also mentioned that the fix for this was very cheap and very easy. If you want to make a mountain out of a molehill and make something that is either a non-issue or that can be fixed for $80 a year keep you or other people who may want to to invest from investing that's fine. I will most likely be buying in Costa Rica again and I like rentors, so fine by me.

I'll go you one better. I've gotten involved in a fractional ownership beach condo in Panama with a group of friends. We formed a corp and divided it into 10 shares. So for 1/10th the price of the apartment each owner has full access to the unit when they want it, when members aren't using it we rent it out and use the rental income to pay the monthly expenses and utilities and pay out the remaining money on a per share basis. We have a really well written contract that covers most issues that could come up and each owner can sell their share at anytime for any price they want as long as they give first right of refusal to the present shareholders. Even if we have no rentals for a whole month the entire bill only comes out to $32 per share. It is also fully managed so there is very little headaches. It's been a real winner and everyone is very happy with the arrangment.

I strongly disagree with this . Everything cost more here in Costa Rica. Anything at the hardware store as well as appliances, light fixtures, furniture, a pool table, etc are 50% to 100% more than in the USA . Yeah, you can get an unqualified Nicaraguan to work for 1000 colon an hour but the qualified guy that supervises and micro manages him will even out the cost.

But Jsmythe, You Should BUY in Costa Rica ! There is a need for more rental units in San Jose and beach locations . You can advertise here on CRT.

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* These are the "Good Ole Days". Enjoy Them.

* RENT but, "Don't Buy a Home in Costa Rica" until you have lived here for THREE years.

Are you serious?. I've done extensive remodeling and maintained a rental property for 6 years in Costa Rica. My construction/repair company charged me $25,000 for a job that would have cost $150,000 where I live in the States. Having the leak fixed when I had a leak underground was $105 and would have been $700, when the lock in the front door broke, emergency service at 11pm was $60 and would have been $300 in the states. Painting the whole house was $150 and would have been $800 where I am. I did my research and found a quality contractor and had no games or hassles. Appliances which are more costy there (cheaper if you buy them in Golfito) last a long time and I've never found them to be an issue.

I have owned in Costa Rica and have advertised on CRT, I'm currently pretty heavily invested in Panama but am considering a purchase in CR as I like what they are doing with the roads and the crime problem and I still have some really good friends there. As I mentioned in my previous post I had a great property ownership experience in CR and would consider getting involved again so I very well may take you up on your recommendation.

Yes, I do, as I mentioned at least a dozen folks have told me of personal experiences since I started going to CR in 1987 or so. I have read articles in CR pubs and read the warnings on the embassy website. Recently, while talking with a friend of a friend, he mentioned he was a former CR land owner who who had the squatters ejected by an armed group that he hired and he implied some violence was involved. That is the most recent anecdotal info that I have and again, it is anecdotal and not proven fact, but I have no reason not to believe the guy. I will get more exact info the next time I hit the St. Pete Outback.

In reference to squatter rights in U.S. law, all I can say is if they still exist, they pale in comparison to what is allowed under CR Law to wit:
Squatters

The greatest potential danger for land ownership in absentia and at times even when the landowner resides on the property is the problem of squatters. Before investing in large expanses of land or even a cottage, or a quinta in the countryside, knowledge of the legal procedures along with due diligence is necessary to maintain one's property rights. Written into the Civil Code (hereafter referred to as 'CC') are numerous passages that deal with the rights of possession that are reminiscent of the earlier days of agricultural reforrn. Such clauses tend to favor the small, poor land-holder by upholding de facto "squatters rights" (CC Titulo II, Capítulo II).

Technically, squatters can only attempt to gain legal rights to a non-maritime property by peacefully occupying non-cultivated, unimproved agranian land over an extended period of time. The difficulty of maintaining one's rights over those of the squatters is due to the nebulous nature of the law and what legally passes as "non-cultivated" or "unimproved" land. It can be equally difficult to establish the duration of the squatter occupation, which is a crucial piece of evidence in the eviction process. It is imperative to understand that, according to the law, in case of doubt, "good faith" is presumed on the side of the squatters (CC Art. 284).

There are legal steps that can be taken to rid one's land of squatters. Procedurally, the eviction process is divided into three phases. The first phase is the eviction of squatters during the first three months of occupation. Such early discovery is key, as during this period one need not go to court. Theoretically, one need only alert the local police, who are then obliged to evict the squatters. The catch is that it can be extremely difficult to get the police to carry out their duty, and if one is not in the country, actual eviction is very difficult to verify. Even though eviction within the first three months is a rather straightforward procedure, at least in principle, early recognition can prove to be difficult if one is not residing on the property.

The second phase is after the initial three months of occupation but before one year. If squatters are "allowed" to squat on property for this duration of time, one must go to the courts and start the process of "administrative eviction" (Harris, 1995). The third phase is continued occupation for more than one year. According to the law, squatters have then achieved a "legal assumption," and the owners must go through an ordinary lawsuit process. Such a process has been described by attomey Robert Wells as "kind of like a root canal" (Harris, 1995). In order for the court to grant the property rights to squatters, they must prove that they have been on the land "uninterrupted," "non-challenged" and "peacefully" for ten years.

Although there are no foolproof, preventive measures for eliminating the problem of squatters on land owned in absentia, there are a few somewhat helpful steps that can be taken. Firstly, the propety should not appear abandoned and signs should be posted with the owner's name. The most important, albeit expensive, precaution is to hire a caretaker for the property. Great pains should be taken to secure a reliable caretaker, as well as another individual who can monitor the caretaker; it is not unconunon for a caretaker to squat on the land that he is paid to protect. The easiest way to avoid such a problem is to register the caretaker as an employee, which entails paying minimum wage and social security. One should also demand signed receipts from the caretaker as proof of payment.

A word of caution regarding squatters: the notion that squatters are simple campesinos is unfortunately not always correct. There have been numerous reports of armed, dangerous and organized squatters -- predominantly in the southern regions of Golfito and Pavones, and one such group killed an American landowner in 1997. There have been other reports of a armed squatters using intimidation and violence with caretakers and landowners in order to gain control of the land. Obviously, extreme caution should be exercised when purchasing land in Costa Rica to avoid areas with known organized squatters. The bottom line with purchasing land for future development or as a summer getaway is that, while it may be less expensive than other developed resort areas, it may not be the bargain it appears, as caretaker and attomey costs may accumulate very quickly.

link: http://www.usembassy.or.cr/proprigh.html#Squatter

Likening the 3 step legal process to a root canal does not make it seem as simple as other describe it.

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“Good people sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf.” And we are the guys that keep them in Eggs & Grits