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Scott,
Lotus is correct, we have frinds and neighbors from NYC that own a home across the street from us in Florida as a pert time residence, they sold their co-op a few years ago, and rented an apartement in NYC as they also own a home in Long Island. They told us the same when they decided to purchase another condo in Manhattan that they are about 1000.00 a sq ft! It’s needless to say Mind Boggling! Just when I thought that we did well paying about 56.00 a sq ft to now about 220.00 a sq ft in 11 years! I think I would be dead befor we hit 1000.00 a sq ft! LOLThanks DaveT, the domino effect is exactly my concern but it relates and affects the casual investor more than a chartered investment group or a wealthy individual that has plenty of liquid cash remaining after the purchase of a condo in Costa Rica.
For those who are putting all or most of their eggs in one basket, I would not advise an investment in RE a long way from home.
I love Costa Rica and I’d put anything Scott has recommended at the top of my list so when I’m ready (if that day should come) I’ll certainly head to this website for advice and recommendations.
Personally though, I like the thought of building from scratch rather than buying an existing structure. The whole building process from land purchase to architectual design to building to landscape design is what gets me excited. Buying an existing structure bores me – I like the thought of living in a place where I can show pictures and tell a story and if I should sell the home to pass on the story. (never attempt to build in CR while living elsewhere!)
Dwayne,
I agree wholeheartedly with you about the casual investor. No one should make investing in a foreign country their primary investment strategy and I am certainly on the record for being highly against that. Also, not that I think you were accusing me of being one, but I am not any kind of trust fund kid with loads of disposable income lying around. I organically grew a small business, and sold at a pretty young age (29), but still have mortgage payments and an overall modest financial portfolio. However, I am a FIRM believer in real esate investing and think it is a powerful tool to generating wealth and financial security. There is a saying that says:* The poor spend their money
* The middle class bury their money
* The rich invest their moneyYou are right as well that CR is a cash intensive country to invest in, and the barrier to entry is steep by any standard. For that reason, I pooled my money together with 5 friends to minimize the risk and to leverage our buying power. We also all believe in Costa Rica and think the timing is good to buy. I think that people who are financially capable to do so and are looking to make viable real estate investments should not be on the sidelines right now in CR. Again, this is just my opinion and like you highly encourage everyone to be careful and to do their own due dilligence and research before pulling the trigger on any real estate transaction (especially in a foreign country).
All true DaveT. Long term RE investing is truly a good thing. Recently in the states, even short term was a good thing, but I can remember when it took years to gain enough equality in one’s property just to break even after paying the realtor 6 percent.
I have a friend who owned a townhome in Maryland for 9 years (he had no second mortgage or LOC to pay) – he sold right before RE values started going up in Maryland. After paying his mortgage and his realtor, he put around 20k in his pocket (9 years and only 20k net!). This was his primary residence. He wanted to relocate to Reno and he did so just a year too soon, because had he waited 1 year his net would have tripled. If he had waited 2 years, he would have netted more than triple. He was extremely unlucky, because when he arrived in Reno as a renter, California RE profits were being invested there and so the prices were FAST rising. (Wages in Reno doesn’t support a lot of buying power, but California wealth does). Californians were selling out and moving to Reno in large numbers and it doesn’t take developers long to realize that a lot of cash is coming to town – they raised prices! (Reno is actually a very nice place to live – hot during the day but cools down nicely as evening approaches and it has a nice small town feel).
He eventually bought a home in Reno and it has increased and decreased in value, but he is still ahead of the game.
It turns out that right now, the RE values in Reno/Sparks area, have tumbled a lot more than other areas. Why? Californians have slowed to a crawl their move east, because the short term profit is gone. I see the California-Reno situation the same as the USA-Costa Rica situation. It is true, Calfornians could go to Reno and put so much money down that it allowed many of them to retire in a house double the size of their California home.
RE investing – you have to be willing to go long not all the time but most of the time throughtout history.
And DaveT, there is another thing about poor people (no offense to them), people who’ve always been poor often can’t help “seeing” themselves as poor so if you paid all their bills for them and gave them 20k, it would take most of them less than 2 years to do things financially to put themselves deep into the poor-house all over again. In order to have money, you have to be able to “see” yourself as a person with all the bills paid (except for the mortgage of course) and a healthy amount of cash in investments. What the mind does to us subconsciously is sad.
That’s why we bought with our “hearts” not so much with our heads. Life is too short and unpredictable to always be worrying about the bottom line. I would not make an investment with a 10 or 20 year horizon simply because the x factor is to big. How many people spend there whole life working and saving for some future event and then drop dead. The present moment is what counts, is whats real. I don’t want to die with a multi-million dollar portfolio of any kind anyway most of us will never have this type of wealth. I’m not advocating reckless behavior just the opposite. Maybe to many people are just chasing a potential financial gain but for some the sunsets will always be spectacular and the waves will continue to break perfectly and we simply will not care what condos are selling for in Jaco. This is a fool proof investment strategy, all others proceed with caution. It seem that international real estate investment/speculation should be reserved for a small part of your portfolio. Buying your dream home is not quantifiable…
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