Time-frame and purpose

The first thing to ask yourself is why you want to be in Costa Rica. Vacation? Sabbatical? Change of pace? Retirement? Moving your family? From there, ask yourself how long you will stay in Costa Rica. Five years? Ten? Twenty? Maybe just a month out of the year? Or the rest of your life? The answer to these questions will make a big difference in the wisdom of buying property. If you are planning to move your life to Costa Rica, buying will be a good choice. Rather than throwing your money away on rent, you’ll be paying a mortgage (or better yet, own the property outright). Since it’s your home, and will be for years, you have little to worry about as far as the real estate market, tourism industry, or health of the local economy.

Your other purpose for buying property in Costa Rica might be as a second home or vacation home. In that case, your life plans won’t matter so much, but be sure you can afford it. Many developers sell beach condos as vacation homes to North Americans with the promise that they will be able to rent out the condo while not using it and pay the mortgage with the rental payments. Beware of this pitch. While it’s true this is possible, it’s not at all clear that the rental market for condos will support so much new product that all looks the same and is clustered in a few specific areas. Second homes should be bought with extra cash, not acquired with mortgages whose payment is linked to the health of the tourism industry.

Finally, there’s the possibility that you are buying simply as an investment. In that case, ask yourself how much experience you have in real estate investment: A lot? A little? None at all? Though getting rich quick in real estate is certainly possible, real estate investment is complicated, long-term, and can be risky. Add to that a foreign culture and language, and Costa Rica is probably not a good place to learn. The market has gotten a lot leaner and tougher over the last 15 years, things aren’t generally cheap anymore, and investors have to be quite a bit more daring (and rich) than used to be the case. That said, real estate investment in Costa Rica is perfectly doable if you have some experience or some extra money to play with. Surround yourself with the right people and go in with your eyes open and you can make out just fine. Just keep in mind that there is always – always – a chance you’ll lose on your speculation, no matter what the boosters say.