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Interesting article but after all is said and done, where do you get the mortgage? For those financialy challenged that will be the difficult part and to risk alomost $9k on an option granting you the right to buy…This sounds like a better deal for someone financially secure looking to speculate rather than someone hanging on by there boot straps. I know Scott always has his vip members best interests in mind, but I think the risk/reward for some here may not be so interesting?
I will ask Jeff Hickcox – one of the authors of that article – to respond to you Lotus. I am certainly confident that they will do the best they can for their clients, as they have done for a number of our VIP Members but let’s get the facts straignt from them …
Scott Oliver – Founder
WeLoveCostaRica.comLotus,
I’m gald that you thought the article was interesting. The speculation factor is just a small part of a deal like this “rent-to-own”. For the person who was planning on renting anyway, it is a great opportunity to take advantage of future appreciation. They can sell the home before they buy it – and double-close, sell their option, buy it cash, or finance their way out of it.
Many of these folks are waiting for a home to sell in the U.S. or wherever. Those funds can help to buy the home. When a married couple has a guaranteed income of $2000 per month for the rest of their lives and limited liabilities – a mortgage is a real possibility too. $2000 per month is ‘boot strap’ money in the USA – but here in CR it is a nice income. Although I don’t mention a mortgage throughout the article – you can visit http://www.CostaRicaMortgage.net to see the many options that they are offering for North Americans.
Good Luck! Pura Vida!
Jeff HickcoxYes I think the idea is good for some but again there are certainly risks involved and if I saw this anywhere else but on this site I would be suspicious of the intentions of the people behind it. Still qualifying for a mortgage in Costa Rica with only your S.S. income and not having legal residency would be challenging if not impossible under the current banking system. Of course I see the advantages to this program as well, you certainly have to way the risks like any other deal. What bothers me about this kind of program is you may attract people who are not sophisticated enough to understand these risks, put down the “option” money but have no real way of closing down the line and there is no guarantee these “escape” clauses/options will be available. I understand most of the VIP members on this site are sophisticated buyers though and I guess when I have seen this type of program here in the U.S.it’s what we would say here in NYC; “Not Kosher” lol. I have been a broker here in Manhattan for the last 16 years so have some understanding of the business. Best of luck.
Lotus,
I do agree there are risks, however there are risks invovled in every type of transaction.
I think someone in the US researching Costa Rica online and plopping down all cash on a house in Costa Rica without living here first can be even more risky. Especially if they overpay for the property.
When you speak of the banking system here, I agree. That is why these and all US buyers should pursue mortgage companies based in the USA. More and more of these companies are expanding services into Costa Rica.
I did many of these transactions in CT. I had an 80% cash-out rate. I hooked my tenant/buyers up with a credit adviser and a mortgage pro to help them prepare for a loan. Maybe some folks in your area are not honest with this program. However, if done correctly this opens up possibilities for people who thought they had no options to build equity.
Here in CR we aren’t dealing with bad credit buyers. We are dealing with middle-class retirees who want a marriage between renting & buying. Less money down, building equity, and getting to know Costa Rica. It is a less risky happy medium.
I appreciate your concerns, but you can be assured that we handle our business with integrity. Scott would not recommend us if we were not forthright and honest agents.
Jeff H
We also have a program which could be called rent-to-own (only apartments in a gated community). You pay a normal rent, and if you want to buy the apartment, you can buy it for the average price of comparable apartments at that moment. We ask one month rental as deposit and will be refunded if you leave or buy the apartment. The minimum rental period is one year.
No speculations about possible future appreciations. No pressure on getting a mortgage or paying the apartment. No fear for loosing a high deposit (= hidden rent). If you want you we can agree a purchase price at the moment you start renting.
In fact it is just renting, and if you like it, you buy it….. And you have the time to discover Costa Rica.
Genn,
I am curious about your program. Do you allow your tenant/buyer to build equity every month? Do you give the right to the tenant/buyer to sell their option for financial gain? Do you only use this program only in your communities? Or can you negotiate this type of deal on your client’s behalf anywhere in Costa Rica?
Thank you for taking the time to reply.
Jeff HWe keep it as simple as possible and we have this only available in our community (brand new modern apartments in Alajuela). We charge an abolutely normal rent. You rent, and if you want to buy it, you buy it, if not: you don’t buy. We cannot make it easier I think.
If you think you can make further profits with it ? No problem….
We allways read that everybody recommends to live a while “just somewhere” to find out what place you would like most in Costa Rica. But if you rent a house or apartment and you like it, that doesn’t allways mean that you can buy it. So you have to move out.
And that is different with us.It does sound to good to be true but, from what Ive been reading in the papers. There are a lot of empty homes and condos. They cost money and the builders and lenders have created a way to fill those houses. Make sure you as a future tennant/owner remember you have the power of bargain on your side.
Great marketing, this slow time will not last forever.
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