Tamarindo Real Estate – Are condo pre-sales fueling an unsustainable development boom?

It is common practice in the United States for condominium development projects to be pre-sold prior to and during construction.

In Costa Rica this sales method is fraught with danger to the investor and it is fueling a boom of condominium development projects which are poorly planned and and which overtax the existing inadequate infrastructure: roads, water, sewage disposal, etc.

The prospect of a quick profit is intriguing, but highly risky to investors. It is not unheard of in Costa Rica for investors to be outright defrauded, while the principle culprit involved moves into another legal jurisdiction with impunity.

Some have even returned after the 10-year statute of limitations and done it again! Investors in the first pre-sale condominium project here in Tamarindo were repeatedly advised during construction that due to the rapidly increasing cost of construction that they would have to invest further sums of money to cover these unforeseen expenses.

In reality, the project was taking the hoped for profits of the pre-sale investors as completion neared.

It is also important to note that at this time, the number of existing conodominium projects and both those planned and under construction vastly outstrips the current market demand, and will most likely be the case for many years into the future.

So sales promises of quick profits from flipping condos after the completion of construction is a popular myth pitched by many real estate sales agents.

Also of great significance, is the fact that the recent flood of new condominiums offered as vacation rentals, has caused the occupancy rates per unit to drop drastically in recent years.

Current occupancy rates very from 10% to 40% and average out at 20% or less! So promises of high rental income are also falacious.

Tamarindo was originally planned as a residential community of roughly 1,000 plus single family residences with only a minimum of condominium sites. The width of our streets was determined according to a relative low density community.

This original urban plan has been totally corrupted and today we have a shortage of parking areas and the resulting traffic problems. The availability of water and the water distribution pipes will soon be inadequate.

Without a sewage treatment plant the bay will soon become contaminated and so on and so forth. Ultimately, if the development of high density condominium projects is left unchecked, the Tamarindo we and all tourists love will be in ruins.

Lastly, many of the condominium projects currently offered have insufficient parking spaces, lack storage lockers needed by part time residents, do not have laundry facilities and serious other defects.

We are in a crisis and ask that you help us preserve the beauty, nature and sustainability of development in Tamarindo by carefully scrutinizing any condominium project of interest to you and not to speculate on high risk pre-sale condominium projects.

At today’s high prices, if it is not build and you do not plan on living in it 6-months of the year or more, it is not a lucrative prospect in investmnent terms.

Thank you for your attention from the concerned real estate brokers and property managers of Tamarindo:

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Written by Jerry Smith in Tamarindo, Costa Rica. Jerry is a real estate broker and a member of the board of the Tamarindo Betterment Association (Asociacion ProMejoras de Tamarindo)

Andrew Makarik

to@welovecostarica.com

Andrew Makarik is the main editor of WeLoveCostaRica, a fan of this sunny country. He is also a loving husband and a has a lovely daughter. By being a devoted family man and the biggest Costa Rica fan, he wants to make more people feel at home there. WeLoveCostaRica unites people and helps them find new home or a new travel destination. This website is a friendly community where everyone can find not only information, but also new friends and travel pals. Andrew is also passionate about IT and programming, so he himself maintains a friendly atmosphere in this cozy environment of WeLoveCostaRica.com.