Costa Rica Real Estate Investment – Heredia’s Market

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What’s a good short term investment in today’s Heredia Real Estate market? With many prices that seem unusually high, this subject has many people who have become interested in Costa Rica hesitant about spending their money.

One common solution used to buy time that appears to be safe but results in high expense and sometimes loss of opportunity is to rent. The other option is fairly simple and a much better investment.

The market today has been shaken and turned upside down because of the increase of interest in the last 5 years from the foreign sector wanting to relocate. This does a great deal of good for the country as a whole economically, but it really confuses the locals as to what they believe the value of their property is.

To the outsider coming from a more expensive market (Europe, U.S., Canada) most of the prices, until about 3 yrs ago, have seemed to be quite reasonable for what one could buy. Why? If you took a nice home with a nice property from Costa Rica and plopped it into their market, it would have been double or three times the value.

Fine, it makes people feel good to go back to their friends and family and tell them that they bought a nice home in Costa Rica with twice as much land for half of what they could get at home. Is this a fair comparison? Maybe.

Is this a good investment? Sounds like it to their foreign counterparts, but only to them. Tell that to a Tico (Costa Rican) and their eyes get wide at how much money that is and then the confusion begins.

They go home, tell their papi that the foreigners are coming and that their farm, home, or piece of land could be worth a lot more than they thought. Good for them, I can’t blame them for doing that. It’s exciting to finally feel like you have something others might find valuable. So go ahead, throw out a price, see what you can get, test your buyer, and good luck.

Well, this has been going on for 5 plus years now and we’ve reached the point where, to many visitors, a lot of prices are past the level of ridiculous. Instead of going home and discussing their inexpensive discoveries, now the conversation leads to, “wow, that much, huh?”

There will always be those who “test” the market and try to get lucky (there are a lot of those here), and this truly is a beautiful country giving good reason to why people want to move here, but we (meaning Ticos and those of us who live here) have to be realistic. Buyers are more informed today and if we want to sell, we have to provide competitive prices instead of “market testing” prices.

If you think you really like this country, definitely give it a try because there is a lot of opportunity here, it’s a nice place to live, and overall, properties are continuing to steadily appreciate. Start your long term, higher priced, investment ideas with a safe, short term investment, one that you might have to or want to sell it within the next 2 years. Unless you fall in love with something and have to have it, take your time with the $250,000 dollar and up properties. But, if you love it, you’re looking beyond two years, right?

So, what’s a good short term investment? Get into something that can be resold to a large spectrum of Ticos as well as foreigners. Find a house that fulfills the needs of the local market. Plan on spending between $85-140.000 dollars and getting a fairly small, fairly new, and reasonable 3 bedroom home or condo with a small back yard.

Find a safe neighborhood, preferably gated, and close to the city. It might not be your dream home or property, but it’s a great start, these homes sell, and it will give you the time to search through the “testers”, negotiate prices, and find the right place for you.

In the meantime, you’re home will slowly appreciate and when you’re ready to sell, not only do you have a huge foreign market who like the idea of spending $150K or less, but also the large middle class Tico market who already knows that they have to spend that money for that type of home. Make $10-15,000 dollars in two years and move on to what you really want.

Will you make a lot of money on the home? No, but you will surely make money which is a smart way to buy time to find what you really want. Is this a good investment? Yes, because it’s short term, low risk, and much easier to resell when you need to. When we’re in a market that is saturated with “testers”, we have take advantage of the luxury and power to shop around and negotiate.

The really patient, stubborn seller might not budge on their price, but there are plenty who are also getting tired of waiting. (I know of many properties, and homes that have been “for sale” for 3-5 years).

If you have already found the location where you want to settle and are confident that “this is the spot”, there are definitely nice options in the $200-400,000 dollar range.

It might be 4-6 years until those values are in the budget of the majority making the resale of these properties a little easier, however, there is a lot of truth to what people say to their friends back home. Who in their respective countries can find a large home with a half acre of land, in an incredible climate, near a major city, with a great view for $300.000 dollars? Not many.

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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.