I have been totally enthralled lately with the activities going on around the world in the trading markets.  Investors are panicking, stock prices are plummeting, snow is blizzarding, and in the meantime, I’m just sitting back in my office watching the hordes of travelers find their way around the streets of Jaco all the while avoiding sun burn.

The streets, hotels and restaurants in Jaco right now are packed.  And that’s a good sign for all of the rest of us.  For some reason, a colleague of mine was under the impression that Jaco was a deserted town these days.  That colleague works in Guanacaste, so it is not surprising that he had heard negative things about Jaco there.  You see, Tamarindo (which is like the Jaco of Guanacaste) has rivaled Jaco in development for the previous 5 years; and in popularity as a hot tourist beach destination for the past 10 years.  

As with any rival, comes a bit trash talk, and I can’t say that I’m not completely innocent.  I admit, I have told a traveler or two that Tamarindo’s development seems a bit chaotic and thank goodness for the wide paved roads with multiple exit and entrance routes in Jaco.  But I’m calling a truce.

In this economy, we need to stick together and focus on the positive.  Quite frankly, the large groups of spring breakers, sport fisherman and families vacationing in Costa Rica direct from the USA is a very positive sign for me.  At my office, we rent homes, and although January was a little rocky, March and April are proving to make up for our slump.  Is it a good sign that the economy is not that bad?  Well, maybe.

Let’s face it, not everyone is interested in international real estate trading, so we are somewhat of an exclusive group.  But considering that in the previous months we’ve seen around a dozen properties go under contract from this office alone, I’m optimistic.  And honestly, life is good down here in Costa Rica.  The weather is fabulous.  The food is always great, and in the meantime, business, for the most part, is still booming.

Believe it or not, my claim is that our market is still strong. The well priced properties are moving and people are still buying, building and renting.  

Three cheers for pura vida!

Wendy

Have you ever built a home in a foreign country where everyone speaks a different language?

If you no to either one of the previous questions, do us all a favor, and don’t try it in Costa Rica.  Why not?  It sounds like a fun adventure.  You could build your dream home, just the way you want it.  Think about how proud you would be to say in some future moment, “I built this house” with a BIG smile across your face.

Well my cyber friends, this is really an evil illusion that some real estate agents try to sell to unsuspecting clients who just want to have a nice vacation or retirement.  ’Evil?,’ you may ask.  ’Why evil?’.  Okay, so evil may be a harsh word.  But the truth is, very few real estate agents in our area have been through those ropes themselves, let alone are qualified to lead their clients through the process.  

Building in Costa Rica is just a little different than building back home, wherever your home may be.  Let’s start with standards.  This is not just a North American - Central American culture clash.  This is a world wide phenomenon.  People in different geographical areas just have different ways and standards of living.  Costa Rica is no different.  

There are a million snaffu’s that I have seen, and though it may be funny to recap, I really don’t have enough space in this blog.  So we’ll just say that through EVERY STEP of the construction of a home, the owner should be present to catch and correct all of the weird little quirk that comes along.  

“Come on,” you say.  ”It can’t be that bad”. Let’s just say that in my handful of projects, I have seen a breaker box for the entire house placed in the center of the main wall of the living room;  The light switches rarely placed beside the door way on the side in which one enters the room; an actual light switch INSIDE THE SHOWER; need I go on?  And I have not even begun with the good times you’ll have BEFORE you begin building during the permitting process.

The point is, it is really not at all as romantic as it sounds to build in Costa Rica.  So take it from me, keep it simple.  Buy a home or condo that is already built.  There is PLENTY of inventory to choose from, and in almost any part of the country you can find a wide variety of styles to choose from.  

If you do decide to take that leap of faith into the depths of construction, then make sure that you are going to visit every 2 weeks minimum, have a translator ready at all times, and hire a contractor with an impeccable reputation. Yes, there are a few out there.  BEWARE of contractors that charge 30% less than all of the rest, they may be spread too thin or knowingly under bid but cannot possibly finish the job for the price quoted.  And always be friendly with your neighbors.  

As I said, I’ve been through the ropes a couple of times, and would be happy to help if you or anyone you know are thinking of building.

All the best,

Wendy

 With the economic crisis on everyone’s mind, it is no wonder that every investment opportunity these days is getting a twice over (just generating a positive return is now considered good)! The trouble is finding them. We have all heard that the real estate bubble has popped…blah blah blah, but if you are a serious investor you understand the age old principle that my Real Estate Professor once said “Buy when there is blood running in the streets.” There are lots of deals out there right now and being in the trenches and close to the action, I can tell you this, PEOPLE ARE MOVING OUT OF THE USA at an alarming rate…many of them are heading to Costa Rica and this can lead to a positive investment return for the right investor! Sound interesting? Consider these points:

 1. The world is now Internet based. What does this mean? No longer do people need to show face in an office building, instead, they can work out of the comfort of their own home. Coincidentally their home can now be located in Jaco or Playa Hermosa (wink-wink). The number one request I get for long term renters is ” Does it have Hi-speed Internet?”, for the most part we have it here in Jaco, and as the infrastructure improves in anticipation of free markets opening things up a bit (CAFTA), you can bet that Costa Rica will be wired from coast to coast very soon.

 2. Time for change. Obama lead a campaign based on this simple concept, yet what I hear most from my clients is that they are changing where and how they do business. Let’s be honest, the US has a less than favorable tax structure, strict rules and regulations, and Wall St has proven it can’t manage itself. Job losses are mounting, unemployment is at an all time high and as we enter a recession, nobody is sure when it will end? Wow, maybe now IS the time to move to Costa Rica and try something different? Why not, you have a myriad of reasons just mentioned (well this is just what my long term renters are telling me anyway).

 3. Tropical tourist destination. As the Internet shrinks the global economy, living in paradise has fast become a reality. With warm ocean temperatures, consistent waves for surf, sand, palm trees and 3% of the world’s biodiversity, it is no wonder that Costa Rica has become the #1 eco-tourism destination in the world…and with that comes opportunity and job growth. As tourism grows, so does the support system of travel operators, hotel staffs and dining facilities and the like, which is exactly what is happening here in the greater Jaco area. Jaco is quickly becoming Costa Rica’s booming resort town. Don’t forget, all of these people have to live somewhere!

 One of the most basic principles to investing in real estate is renting out to cover the mortgage. In times of crisis and uncertainty, going back to the basics is exactly what can yield you the return you are looking for! Please contact me to learn more about investing in income producing properties in the greater Jaco area. Clark@jacorealty.com

Take care,

Clark

Editors Note:

 Clark Kreston is a sales associate for ERA and long term rental specialist at Rent Costa Rica Homes.  He has been living, working, investing and renting in CR for 3 years and is a specialist in the Playa Hermosa - Jaco area.  Clark is also our leading listing agent for multi-unit and income producing properties.

Something that we thought was completely unimaginable is finally within a stone’s throw of legislation coming into effect in Costa Rica.  I’m talking about real estate brokerage regulation.  Wahoooo!!!  This is a huge triumph for all of us hard working, tax paying and honest real estate professionals who are tired of having to excuse the whole lot of us for our terrible reputation, lacking professionalism and sometimes completely unethical activity.  

Sure there are some great agents out there.  But there are probably ten scoundrels for every legitimate agent, give or take another ten.  If you were not aware, it is not obligated that real estate “brokers” receive any formal training or certification from any governing bodies to practice real estate in here in Costa Rica.  And I often get offended or put off by the new broker in town bragging on credentials that they have accrued in the US or Canada.  Bottom line: Costa Rica is a soveriegn nation with unique laws and procedure to ownership.  A top perform broker in California has no idea what is going on in Costa Rica unless he or she takes a long time to figure out procedure for property trading here in Jaco.  

Or he or she could attend a course offered by the Costa Rica Global Association of Realtors OR the Camara Costarricense de Corredores de Bienes Raices, which would afford that person the legal right to refer to him or herself as a ‘BROKER’ or a ‘REALTOR’, two catch phrases that are as bastardized as luxury and eco friendly in Costa Rica.

When purchasing property in Costa Rica and your real estate agent refers to him or herself as a Broker or a Realtor, ask up.  Did he or she pursue their license with the CCCBR or the CRGAR?  Because if they are not card carrying members, they are not Brokers, nor are they Realtors in Costa Rica.  

The Costa Rican government and populace has finally had enough of the scruples and is ready to commit to a mandatory licensing procedure that will be granted through either of the regulatory agencies.  Details are still being negotiated in the Congress, but one thing is for sure; the time is coming.  And it will be soon.  So if you have not been licensed, but continue practicing real estate in Costa Rica, then you may want to go ahead and take the course.  Frankly, it is not very long or difficult with either agency.  However, you will at least cover the basics of what not to do and how to keep your transactions safe and legal.

And for buyers, please use a licensed Realtor with credentials from either the CRGAR or the CCCBR.  For more information on licensing courses in your area, send me an email for the latest schedules.

Until next time…

Happy bargain hunting.

I assume that if you are reading this blog, you are at least somewhat familiar with Costa Rica real estate.  And that familiarity may have introduced you to a seemingly “organic” code of ethics in the world of listing, buying and selling real estate.  It is almost a tradition to swap funny stories of ridiculous episodes where would-be clients intend to do business with so-called real estate agents and any number of follies or haphazard information arises during an unorthodox negotiation.  Screw-ball lawyers, greedy sellers, buyers that have no money nor credentials to negotiate million dollar deals, and of course unscrupulous real estate agents are all too common players in this dog eat dog world of Jaco real estate.

I try to keep my forum upbeat and positive, but the unethical practices that have always tainted my profession have finally made me mad.  I do not need to outline which ridiculous episode it was this time that was the straw breaking my figurative two humped camel back, but I will simply concede to this inconvenient truth.  There are simply too many sleeze balls in the real estate related industries here. 

Of course, I would exempt myself and anyone I do business with, but even lately, I have found out that people within my inner circle are partaking in subversive activities to get a piece of the pie all to themselves.  So I am left thinking, why do people put themselves through all of this just to bump ahead if only for a little while.

We have one motto at ERA Jaco Realty, and that is 100% transparency at closing for EVERY deal.  That means that we will not be over charging (the popular practice of sobreprecio) buyers to take a 25% commission on a sale.  We will not be going behind a real estate agency´s back and go directly to a seller just because we can.  We will not remove any other real estate agency´s sign from a yard, and we will always try to reach the best negotiation for all of our clients, buyers and sellers.

We are card carrying members of the CRGAR, and I personally have worked very hard to strengthen Jaco´s local chapter of the CRGAR in an attempt to raise the bar of professionalism in the area.

We still have a ways to go.  And although some people in the country have taken courses on Ethics and proper real estate proceedures, there is nothing fancy about the golden rule.  Treat others as you wished to be treated.  If we could just follow this one simple rule learned in kindergarten, we would already have won half the battle.

On a positive note, I am very proud of the United States right now and this moment in history.  Although my frusteration may be rising to the surface here in Jaco, the message of hope and change does give me a good boost of inspiration in this corner of the world.  And I am very, very proud of Big Ben and the Steelers.

See you at the superbowl!

Wendy

We went from having no paved roads to having all paved roads.  We’ve come from having two hotels in town boast five stories, to having more condo towers than I can count right now.  We have a skyline!  And with all of this growth, we also have a growing population.

I was buying a bagel at the local Bagelman’s in Jaco and was very pleased to see a sign on the door informing patrons that only paying customers can sit all day in the a/c with their computers and solicit business.  If you’re a jacobeno (what we call locals), you know exactly what I am talking about.  There were a pack of 3-6 real estate and other professional fields being represented by people who came to the bagel shop every morning, ordered a cup of coffee, set up a card holder with business cards and conducted business while using the free internet service there. 

Most of these people were real estate “peddlers”, but there were some other professions represented there too.  I used to get very fired up when I would try to go into the bagel shop to have a cup of coffee and overhear some “new comer” to Jaco in the seat next to me talking loudly about the market and properties that they were selling.  It really used to bring me down. Not only because sometimes half of the information coming out of their mouths was completely off base, but it really dilutes the seriousness of our craft.  

Anyhow, here’s three cheers to the Bagel Man for ousting the real estate agent posers.  And to the rest of you, please remember that the term REALTOR is only applicable to card - carrying members of the National Assocation of Real Estate.  Just because you have a business card, you do not automatically become a REALTOR.  For more information on REALTORS in Costa Rica, visit the CRGAR’s website at www.costaricare.net.

Much love to the Jacobenos out there.

Wendy

Just one more addition to yesterday’s post on things to look out for when purchasing a condo.  Although the last list was general information for any resort destination, this one pertains particularly to Costa Rica.  It is rocking the nation as a near disaster, and hard hitting in many of our favorite commercial developments.  Don’t get caught without a parking spot!

In Costa Rica, there are minimum regulations for parking for any development.  However, regulations are typically governed by a regulatory zoning plan, and in many hot and booming coastal areas, such as Jaco and Tamarindo, there is still no regulatory zoning plan in effect.  There are a few other agencies that make suggestions, or enforce minimum parking spaces, but unfortunately, developers find ways to maximize their dollars using valuable square meters for more construction and less parking.

Friends beware, if you are purchasing a condominium property (residential or commercial) in Costa Rica, have your attorney (NOT an attorney suggested by the developer or their sales team) verify the ownership and availability of parking.  Do simple math.  If there are 30 condominiums and 29 parking spaces, there is a problem.  Take it a step further, if there are 30 condominiums and 30 parking spaces, there is still a problem.  Remember, there are managers, guests, grounds keepers, and other service providers who will need parking!  Don’t listen to people who insist that “the parking lot has never been full, so you probably won’t have a problem”.  Unless the development is more than 15 years old, then there is not enough time to tell whether or not you will really need that deeded or designated parking space.

Parking in Costa Rica under condominium law can actually be included in the square meters that are sold to the purchaser.  So see if your parking lot is considered “common area”, or if it is actually deeded to your “finca fillial”, or registered property.  BE SPECIFIC when you ask your attorney to double check the contracts in regards to parking.  Even attorneys can look over this detail, or consider it less than important.

In Jaco and Tamarindo, two hot areas of Costa Rica, condominiums are being built with fewer parking spaces then units.  Bad idea.  Don’t get caught in this mess!

Happy New Year!

Wendy Brown

My friends, it’s over.  That rule does not work any more.  While one cannot accredit one simple rule or criteria to be the most important when selecting a property, one can take into consideration the following points to make smart real estate investments.

Because this is www.jacorealty.com, and we are in a very strong market, I am going to speak in reference to this area, but these principals could be applied to any resort destination that is affected by affluent travelers.

In Jaco we’ve had a “boom”.  We are actually still “booming”, and anyone who has visited here in the past four years can attest to this statement.  That boom means that Jaco now has a skyline comprised of strong and impressive structures housing millions of dollars worth of high-end properties.  When a client is new to the area and wants a condo, it can be truly overwhelming with so much to choose from.  So if you are ever in this boat, take some things into consideration:

1.  Why are you purchasing property (or a second home)? 

If you want to live here part time, make sure that you have all of the ammenities that you and your family will need to be comfortable and safe.  If you want to invest and move here eventually, then you may be better off purchasing a property that will appreciate and make money in the meantime, so that when you are ready to move here, you can upgrade to a property that really suits your needs on more of a full-time basis.

2.  If you are looking to purchase property for a rental income, then beware, because “income” might not be the proper word to use. 

If your goal is to rent a property enough to keep from having to pay anything for it, this in most cases, is entirely attainable.  However, if you are purchasing a property and plan to pay off a mortgage, pay the bills, the property manager, rental sales commissions, and any other mishaps that can occur along the way, then you may be in for disappointment.  I’m not saying that it can’t be done, but I am saying that keeping your expectations to a minimum will help you stay positive and less stressed as a second homeowner.

3.  When considering a good property for a rental income situation, I offer you this advice.  Look for something unique. 

In any resort destination with a real estate “boom”, such as Jaco, there is going to be alot of rental options for them.  Condo-hotels, condos and beach homes are not in short supply in Mexico, Florida, the Carribbean and certainly here in Costa Rica.  In order to keep your edge, try to find a property with something special to offer your guests.  For example, my partner and I built a home that rents very well that offered guests a private pool, three master suites (all king sized beds) and double headed showers with jacuzzi tubs, which is very attractive for those looking for a little romance during their getaway.  A simple upgrade in your bathroom goes a long way when you are renting later on in the game. 

4.  It is also to remember that when you purchase a condominium, read the fine print on how and who may rent it in the future. 

Some developments have limitations on who and how a property may be managed, and some have limitations on who may be authorized to rent your property.  It is important to have flexibility in the property management and rental sales team that allows you to change up the program if your teams are not performing for you.  Frankly, there are always going to be several companies to choose from, and sometimes people just get along well with certain people and some don’t.  Every company’s management and correspondence styles are going to be different.  Make sure that your company knows exactly what you expect and that they are willing to do whatever it takes to care for your property as you wan them to.

5.  Being one of thirty is better than one of three hundred.

And always take into consideration the size of the development.  If you are going to purchase a condo that is in a complex of 300 units, then you may not be renting as often as a condo within a complex of 30 units.  It is just much easier to rent a few condominiums vs. hundreds of condominiums.  You likely won’t be given priority, because you will be one of many clients with like interests, everyone will want to rent their unit as much as possible.  Finding a unique boutique-style condo development may also be an advantage to you as the years go by rewarding you with repeat clientele, as renters typically like to be in quaint and intimate ambiences, versus large over crowded complexes.

However, at the end of the day, everyone is different, and no rules apply to everyone, so you must really trust your own instincts and discuss with your partners when making an investment decision.  And as with any purchase, always double check your sources and your facts.  Remember, sales people often exaggerate and hide truths!  Make sure that you are working with a licensed real estate broker in ANY COUNTRY!  For more information on licensing in Costa Rica, check out the Costa Rica Global Association of Realtors:  www.costaricare.net.

Happy Holidays from PuraVidaVille!

But what I would like to discuss today is an interesting phenomenon regarding US politics and Costa Rica’s real estate market.  I have been in Costa Rica since 2001, just months before that pivotal moment in modern US society.  Of course, everyone was very scared in the aftermath of September 11th, and most did not travel.  In Costa Rica, tourism took a bit of a nose dive and real estate sales did slow down.  However, when people got over their initial shock and fear of boarding an airplane, they started looking to new horizons beyond the US borders. 

In the coming years, many of the “baby boomer” generation began migrating to Costa Rica because of the uncertainty they felt in the US.  Some had an eye-opening moment in which they were unsure of how confident they felt towards the future of the US and government policies.  Some were scared.  And they traveled to Costa Rica to find that piece of the pie in a country with no army, a country devoted to peace.

There was another upswing in activity shortly after the 2004 election.  People were unhappy with the election results and simply looked beyond the US to invest and perhaps settle down someday when the time was right.  The political unrest in the US after the second election really meant great business for us real estate agents back then. 

And now, the tides have turned and there is a new idealogue in the white house and guess what???  They’re coming back to CR.  Although Obama did have a commanding lead in the electoral college and swept the CNN map with blue states from sea to sea, he didn’t really win by a large margin of popular vote.  Many people were and are afraid of his policies, and once again, we are seeing a small surge of investors crossing the border and looking to relocate. 

Addmittingly, due to the exceptionally grave economic situation in the US right now, we are not seeing as many as we have in past years when political divides swept the country.  But they are still coming.

In conclusion, I will not ever discuss my politics in this media, because so many people that I love and respect feel very different than I do.  But I can appreciate that on both sides of the isle, there are always people who are unhappy.  And thanks to the very gracious government and people of Costa Rica, us expats are still being welcomed with open arms in this peace loving country.

Again, just because a countertop is granite does not qualify any home or condo as luxury real estate.  And just because you have bambu hardwood floors does not qualify your home as “eco friendly”. 

An eco friendly project should be considered during conception of a project (planning ahead using energy and water saving electrical and plumbing designs, as well as planning around trees or other environmental factors), during its construction (choosing materials that are renewable) and especially once completed (by consuming less).

Here is a continued list of things to look for in an eco friendly green house:

1.  Rain water captation systems are a great way to drastically reduce your water consumption.  In Costa Rica, we get a lot of rain, for about 7 months out of the year.  It is entirely possible and not that difficult to design a rainwater captation system to water your plants and flush your toilets.  It only requires a little bit of planning, and the willingness of your architect to design the system (that is usually the trickiest part).

2.  Integrate trees into your home design.  If you have a lot with a tree to cut down, if there is ANY WAY that tree can be saved, do it.  I recall a manager for a luxury development in our area telling me once that saving a tree that was in the very center of the entrance to a grand ocean view home was the best decision they had made on the whole project.  The tree gave the home a purposeful setting, the tree and home truly looked as though they were meant to be existing harmoniously together.  And not to mention, the tree naturally cooled the home CONSIDERABLY, allowing its inhabitants to rarely need air conditioning.

3.  Install high quality double paned windows.  My favorite window and glass door system in our area is PVC, or vinyl.  The aluminum doors and windows heat up, and can even be too hot to touch if the sun is shining directly on them.  A friend of ours has a fantastic 3500+ square feet ocean front split level condominium with gorgeous open spaces and with all of her air conditioning units, high-end appliances, and TV/office consumption, she spends around $200 / month in electric bills.  She attributes her low energy bill to the double paned vinyl windows.  If you’re from Costa Rica, you can appreciate that this is a very low figure for such a large home.

4.  Don’t install tinted windows.  They actually attract more heat!

5.  Instal Mini-Split air conditioners instead of central a/c.  This is a tough one, especially for our clients who are more luxury-oriented and cannot understand why you would want visible units in every room of your home.  Well, for those of us attuned to tropical destinations, we may be used to them.  But trust me, central air conditioners are much more expensive in consumption, and usually slightly more expensive to purchase and install.  We manage a dozen homes or so and the properties that have the highest energy bills are the central air conditioned homes.

6.  Electric water heaters.  Okay, so if you’re really going to go green, just go for a solar water heater.  But if cost and/or space prohibits a solar - powered water heating system, electric heaters are the next best thing.  They are many times more efficient than the hot water tanks that many homes in North America use.  And they use a lot less water and space.  An electric water heater unit is only about a foot and half long by about 8 inches wide. 

7.  Plants near your glass doors and windows naturally shade and cool that area.   This is a technique seen often in the tropics and in mid-century urban architecture like those fantastic homes in the older residential areas of San Jose. 

If you have further interest in green development or green homes, then please contact us.  I am by no means an expert, only an enthusiast.  However, we can point you into the right direction of local experts who really can help you have a wonderful low-impact property in Costa Rica.

Until next time…