Chapter 14 - Doing a small development

This chapter will discuss the issues surrounding doing a small development. Some of the specifics of the topic have already been addressed in other chapters, including the process of buying the land (Chapter 7), carrying out due diligence (Chapter 8), permitting (Chapter 9), and doing business in Costa Rica (Chapter 16). People planning on investing in a real estate development in Costa Rica should, of course, already have experience in such matters, take on a partner who does, or pay good money for professional consultants. This chapter should serve only as a preliminary overview of the topic.

Buying land for development is obviously a different level of investment than buying a single-family home or a condominium unit. For one thing, the property you buy is going to be a lot bigger. For another, you have to be a lot more thorough with your due diligence, as you are going to do something fairly complicated with the land and there is more investment at stake.

You’ll find there are two basic kinds of developments that builders do: Low density and everything else. Low density requires substantially less time for permitting, and less investment up front. High density developments fall into a different regulatory bracket, and so take much longer to execute. However, the return on investment is better, and the product will probably sell faster.