REAL ESTATE ABROAD : Costa Rica Averts Strife, Offers Buys
Anyone in the market for a densely-jungled tropical island, complete with secluded coves, white sand beaches and a 12-room hotel for $750,000?
How about 12 1/2 acres planted in cashews for $15,000; 209 acres with 2,000 feet of beach frontage for $100,000, or a two-story, fully furnished mansion on four acres of landscaped grounds, with pool, for $130,000?
Bargain hunters with ready cash are not likely to do better elsewhere than in this tiny Central American nation, where maximum the property tax is 1.05% of value, and foreigners are allowed full title to property and the same rights and protections under the law as Costa Rican citizens.
Small houses around the capital of San Jose are abundant in the $10,000 to $12,000 bracket, and Marvin Guinee, president of World Wide Realty, said he has more than 50 homes listed in the $20,000 to $30,000 price range, some with up to three acres of land.
You can buy a view lot for less than the inflated cost of a used car, and new construction comes in at about $20 a square foot.
Conflict Affects Prices
The once thriving land investment market has plummeted, the result of conflict in neighboring Nicaragua.
Costa Rica has a long tradition of peace, a stated policy of neutrality and a democratic government with free elections every four years. The army was disbanded in 1949, and the bulk of the national budget goes into education and health-care systems.
There are 20,000 foreign retirees in Costa Rica, most from the United States, attracted by the near-perfect climate (72 degrees average year-round temperature in the central plateau area), relatively low cost of living and attractions that range from world-class fishing to miles of beaches along two coasts, hundreds of rivers and beautiful and unspoiled natural beauty.
“Costa Rica has so much to offer, but the press is killing us,” said Nin Duncan, a sales executive with Aria Frankel Realtors in San Jose. “Reports, often filed with Costa Rica datelines by correspondents based here, create apprehension without pointing out that this country is not involved in the fighting and political turmoil of its neighbors.”
Farm Land Price Fall
A survey of several local real estate firms shows sales down 40% to 60% since 1981, with prices in a similar slump. Agricultural land suitable for cattle and some field crops has dropped as much as 50% in the past five years, to $500 or less an acre.
Al Petersen, president of Find-A-Home S.A., said knowledgeable buyers can do even better.
“You can go to the regional office of any bank and take over payments on farm land as low as $250 an acre, and more desirable property at $600 an acre,” he said.
While sales are depressed, realtors say the rental market is booming.
Petersen said many international corporations have moved to Costa Rica from more troubled Latin American countries and foreign embassies have greatly increased personnel, creating a demand for rental homes in the $1,000-to-$2,000-a-month range.
Tourism Shows Increase
Tourism continues to increase, trailing only coffee and banana exports as Costa Rica’s top-dollar producer, and the Costa Rica government last year adopted a tourist incentive law, giving tourism-oriented businesses the right to import boats, vehicles, hotel furnishings and supplies duty free.
One potential tourist complex on the market is 80-acre Isla Jesusita, an island complete with a 12-room hotel, six small cabins and white sand beaches. It is located in a scenic bay just a few hundred yards off the Nicoya Peninsula, 10 miles south of Costa Rica’s Pacific port city of Puntarenas.
Long-term leasehold rights (the government holds permanent title to the nation’s many coastal islands) are being offered by a San Jose investment company for $750,000.
Beach property has remained relatively stable, but prices are still appetizing by California standards. American Realty has a 209-acre parcel fronting on 2,000 feet of white sand beach along the Pacific coast listed at $100,000.
Resort Developments
Another 177-acre parcel of sloping hill land, one-fourth of a mile from a major resort development, with 300 feet of ocean frontage is offered by the firm for $150,000.
At Nosara Beach, a secluded Pacific Coast beach community that is a favorite of foreign retirees here, Sol de Nosara S.A. is selling one-third-acre view lots, 10 minutes walk from a white sand beach, for $6,450, with $150 down and interest-free payments of $50 a month. Nearly 70 homes, two hotels and a condominium project have been built in the area.
The fastest growing development area is the region around Flamingo Beach, which offers the only developed marina for pleasure boats on the west coast.
In Costa Rica, private sellers generally look for cash on the barrel head. Local banks will finance a maximum of only 1.2 million colones (about $20,000) on a 12-year first mortgage. Occasionally a smaller second mortgage can be obtained. Interest rates are about 18%, plus points, and the loans are difficult to obtain, require extensive paper work and a substantial cash down payment.
Buyers are well advised to take their time and do their homework before putting up their money. It is recommended that an attorney be retained to do a title search before purchasing, and any contemplated investment in agricultural syndicates should be researched with special care.
