Build Your Own Costa Rica Home
How I Built a 200 square metre Costa Rica Home on three quarters of an acre of an acre for under US$60,000
My wife and I own a 210m2 Costa Rica home on 2,800m2 of land (2,260 sq. ft. on three quarters of an acre). Below the main house is a rustic guest cabin of 48m2 (516 sq. ft.) made of tropical hardwoods and with a fireplace and loft. At this point, my total investment is US$59,701.
Our Costa Rica home is finished, although we have a few additions in mind (like an outdoor Jacuzzi, a first floor master suite, and billiard room). Read below or follow the links to find out the quality of this home, market value and decide whether or not you can do it yourself.
Secrets to Buying Affordable Land
Land in middle class developments in Costa Rica costs about $100 per square meter right now. In upscale developments in ritzy neighborhoods with larger lots it costs between $35 and $85 per square meter. How was I able to buy for less than $4.50 per meter squared?
The key factors here are location, tradeoffs and opportunities. Here are Ten Top Tips:
1. Choose Your Area Carefully!
If you buy from a developer in a ‘hot’ area, you will pay a premium. While I purchased land in 1996 for 900 colones per square meter, the area we were actually living at the time was priced at about 7,000 colones per square meter. Even though both areas were nearly the same distance from town, the area we purchased in was much more rural and did not have the same infrastructure.
Another factor was that our house is 400 meters from the paved main road. The key here would be to look for an area that has shortcomings you can live with. You don’t need cable if you can get DirecTV, right? We have rural water that comes untreated from a mountain spring. Our water bill is 1,200 colones per month which is under US$3 (fixed, no meter).
We purchased a water purifier and so now we have unlimited, guaranteed pure water at a fraction of the price the water company charges. If you own a car, you don’t need (or probably want) buses are close by. Those are shortcomings I can live with!
2. Get a Costa Rican to call – Look for Opportunities!
The key to finding reasonably priced property is definitely the location you are looking at, but also a good tip is to have a trustworthy Tico or Tica look for property for you. Fortunately, my wife is a Tica. We drove around the area we eventually purchased in and ‘she’ asked the locals if they knew of anyone who was selling.
Anytime we see an ad in the paper and we want to find out the price, ‘she’ is the one that makes the telephone call. This goes for buying cars, property, used appliances, and anything else by the way! If you don’t have a Costa Rican wife as I do, then find a good Costa Rican attorney who would be willing to help you. I’m sure Scott, the founder of this site knows someone who could help you…
Another factor is that it’s a buyer’s market. You can afford to wait for a good deal to come along. If you can find some one who needs to sell for health reasons or financial trouble, you will be able to negotiate a better price. Look for opportunities and don’t rush into anything.
3. Finding Affordable Land – Areas to Scout
I would suggest a rural area, 10-20 minutes from town. Ticos tend to think in terms of walking or bus routes for distance, so areas that are just a short drive from town are considered out in the boondocks. This is why you can find reasonably priced land in Atenas right now.
One reputable developer, known more locally than internationally, offers quintas in this area for $5 per square meter. If you look around you can certainly buy direct from the farmer in this price range. Another reasonably priced area is north of Tibas along the highway to Lim+¥n. This area has great access to San Jose on the highway and if you go off the beaten track just a little bit, you can find some good properties at reasonable prices.
4. Building High Quality at Affordable prices.
Our current investment stands at $59,701. If we subtract the invesment in land and the guest cabin, what’s the per meter average cost? Take $59,701 and subtract $20,795, which is the value of the land and guest cabin together. Divide $38,906 by 210m2 and you get $185.26 per square meter.
Compare that to most developers who charge between $600 and $1,100 per square meter!
5. Disclaimer: Building Yourself is Not Easy!
I have to warn you here that building yourself is not for everyone. Even back home, the majority of people who have custom built a home only do it once! You have to consider very carefully that you are in a foreign country immersed in a completely different culture. I would advise you to never consider this method if you do not speak Spanish, and do not have experience in construction.
You might get by without one or the other, but not both. In my case, I helped build the rustic guest cabin in 1996 to gain experience in construction. I worked as manual labor, but I learned a lot and saw what construction is all about. I never worked on the main house, but I was able to speak Spanish to the contractor and workers. And my wife is a Tica who also was able to smooth over any cultural differences, and help supervise the construction.
Another advantage was that we lived in the guest cabin while building the main house. This allowed us to closely supervise the construction and keep an eye on the materials.
Russ Martin’s House
6. You Should Build for the Tropics.
Another caveat is that although our home is high quality, it is not a ‘Gringo’ home. We live in the tropics and this home does not have extras that we do not need. For example, hot water in every faucet. We only have hot water in the showers and bath tubs. We wash dishes by hand, so no dishwasher. No 70 gallon hot water tank, since we use instantaneous methods in order to conserve electricity. We don’t have air conditioning or central heating either!
7. Never, Ever Include Materials in the Contract – It will never work!
When there is any type of delay (which there ALWAYS is), they may try to skimp on some materials in order to make back their profit margin. And they will most likely end up asking for more in the end, because they miscalculated on the estimate or it will take longer than they thought.
Another possibility is that they may spend the money you gave them for materials on something else (women, liquor and/or gambling) and they leave the job half finished. Or the materials are purchased, but they never arrive at your construction site!
8. Do Not Pay by the Hour!
You should be prepared to pay your contractor a fair price with a fair profit for him. But don’t pay him by the hour! You will get frustrated with the progress and feel like you are paying too much, even when you are not. And obviously there is a great incentive to slow down the progress, especially in the later stages.
You will have a clear idea of how long your construction will take when you begin, especially once you have some estimates.
9. Always Buy Your Materials Personally and Check the Delivery!
Feel free to get a list of materials you will need from your contractor and visit various places for estimates. You can almost always get 10% off by paying cash (as opposed to a debit or credit card) on anything other than the very basic materials, which are price controlled. You can also obtain a discount because you will buy in quantity.
If you are building an entire residence, the construction depot or hardware store can give you a much better price if you will commit to them for the entire process. Don’t forget the delivery costs!
If you have your own truck or pickup, you can save a lot of money on freight charges. Otherwise, a depot that is closer may have a lower overall cost when you consider the freight charges from a place that charges less but is further away.
On a related topic, try to check with your contractor around lunchtime for the materials he may need the next day. It is very difficult to get deliveries first thing in the morning, since that’s when most people ask for materials. The best way is to call in the afternoon and have the order delivered before your crew goes home for the day.
10. Would I Do It Again?
I am pretty confident that in this case, history can repeat itself. In September of 1997 our weekly payroll would run about 72,000 colones. That included the main contractor, and 3 helpers. At 245 colones to the dollar, that was US$300 per week. In June of 2004, we paid the contractor 140,000 colones per week. That covered his payroll of 3 men and his profit. At 435 colones to the dollar, that was $321 per week.
This difference can be accounted for by the length of the contract. Obviously a contractor looking at 160m2 house over a 6 month period can afford to charge less per week than one looking to build a 50m2 addition over a 4 week period. The wildcard here would be the materials, which would depend on the price of crude oil and raw materials on the international markets.
Early this year, the steel rebar became enormously expensive, supposedly because the Chinese are building a massive dam and they were buying up all the inventories so Costa Rica had a shortage. The price stabilized and dropped slightly but did not return to its previous levels. Another factor in the cost of materials is definitely transportation. Many of the materials are made with energy provided by fossil fuels, so any inflation we see internationally would affect construction costs.
Russ Martin
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Andrew Makarik
to@welovecostarica.comAndrew 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.
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