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I have long distance rental investments in the states and use property managers and it works great, However I would never, never do such a thing in Costa Rica. Anyone living in CR for a short amount of time could answer why. Not to mention, one of the great advantages of such an investment is great tax breaks, which you won’t get here.
Any income you make on such a deposit you will have to pay taxes on it back in the states, and your money will be tied in for a year. thus if you earn 4% in CR, depending on which tax bracket you are, you would more likely earn 2-3%, 7% interest on a morgage is very high these days. Even after taxes your looking at roughly paying 5%. However the question really is can you invest your doe and get more then 5%? any thing less and your losing money (at least in the short term). Its a personal choice really, If your retired and on a fixed income it may be safer just to pay it off. On the other hand, you could invest in a Duplex in SW florida NOT CR and for 100,000 you could get yourself an income of close to 1000 dollars a month after expenses, not to mention the tax breaks, including depreciation etc. Thats at least a 10% return. but there always the management headache of such a thing. Of course this is a little more of a gamble but maybe not when you look at the stock market. Anyway at the end of the day, I would try to invest in some income generating property or pay off the morgage, forget about fixed CD type of interest accounts with these you just buying time but losing money doing it.
Please note: I’m not a realtor, and don’t sell real estate, just trying to suggest an alternate.
Here were the Regional rates as of May 2010.
This is for the nondeductible policy, you could pay less and get a 5,000, 10,000 or 15,000 deductible.
First # is male, the second is female (this is per year)
40-44 726.00 904.00
50-54 995.00 1.131.00
60-64 1.402.00 1.418.00Anyway this gives you an idea. In any event, I would say this is a big time bargain compared to what you would pay in the states for private insurance……and if they will cover a preexisting condition and charge you 60%, still a great deal compared to the states. Its at least worth a phone call.
One last note: Check out the CAJA hospitals and CIMA, no question which one I would rather be in when I’m sick, I would rather stay in a place that resembles a 4 star hotel then a dormitory style with a bunch of roommates (not very good infection control is it?).
This is a different topic but I couldn’t help myself in bashing the American people on this:
In Europe, The home country of the Expat takes care of healthcare in other countries. USA… even though the government will get a huge discount, if Americans were to get care in CR. They pay nothing in CR. They rather pay nothing or pay a ton more. (by the way, I’m an American)Just to add to this……check with your current insurance policy, they may cover you. Our BCBS of NC (blue options plan) covers us completely at CIMA. My wife is currently getting PT there. For doctor appointments you have to submit the claim yourself but for anything major that you are admitted for, CIMA will bill directly.
I disagree with David, I would check into the INS regional plan, Even if they add 60% surcharge for a preexisting condition, it still maybe much cheaper then the US and you will be able to use the private hospitals and doctors, which are probably better then using the CAJA. The president of Costa Rica doesn’t use the CAJA, She uses CIMA……that should tell you something. In any event, its worth talking to the CIMA billing folks (they do speak English), You can ask them what the Regional plan covers, when we talked to them it seemed to cover alot.
Just met with ShipCostarica (Barry) to get the title for the car.
Shipcostarica paid for lojack installation and the under engine cover repair and also supplied 4 security lugs. My wife and I are very satisfied with this solution. However, I still hold that shipcostarica needs to get insurance (perhaps they already have) or alert you do the fact that they don’t. They could even point you in the right direction on how to get it or even offer it as an option.
Hope this thread helps you.
Thanks!
http://ezinearticles.com/?Exchange-Rate—Costa-Rica-Colons-and-Dollars&id=4785695
How to Ruin an Economy?
The short answer to that question is: overvalue the national currency. That is exactly what Costa Rica has been doing for more than two decades. Throughout the years since 1984, under a system of daily mini-devaluations, the dollar exchange rate for the Costa Rica colon was gradually increased. But in most years the domestic rate of inflation exceeded by several percentage points the devaluation rate. In 2006 the Central Bank replaced the mini-devaluations with a system of bands in which the colon was allowed to float between lower and upper limits with the upper limit gradually increasing, in July 2010 reaching 610 colons for one dollar with a floor of 500. Then, beginning in October 2009 the colon gained value precipitously, the exchange rate falling from 590 in October 2009 to 510 in May, 2010. From May to July 2010 the rate has fluctuated between 515 and 530. If this continues for any length of time the Costa Rican economy will greatly suffer.
An overvalued currency harms exports, subsidizes imports, exacerbates balance of payment problems, negatively effects tourism and foreign residents with dollar incomes, deters foreign investment, inflates real estate prices, and invites currency speculation.
Costa Rica has an economy highly dependent on export earnings. If exporters try to increase their prices to compensate for a weak dollar a strong colon means less competitively priced products on international markets. If prices cannot be increased, as is usually the case, businesses must nevertheless pay their operating costs in colons while receiving fewer in return for the dollars earned– 92% of export earnings are in dollars, but 70% of costs are in colons.
With an overvalued colon imports become relatively cheaper. This has the adverse consequence of encouraging import of goods that compete with locally based production. The consumer goods industry in Costa Rica is relatively well-developed, with some sectors also geared to exporting to Central America. Historically, national production has been to some extent protected by import tariffs. These are now largely being eliminated under the provisions of CAFTA, the Central American Free Trade Agreement with the United States implemented under the Arias Administration. The combination of an overvalued colon and the elimination of protective tariffs could mean that some sectors of domestic industry will go under.
While the economy began to recover in late 2009 from the internationally induced recession, Costa Rica maintains a chronic problem with balance of payment deficits. The combination of reduced or lower valued export earnings and increased import expenditures impels the balance of payments into further deficit. During the first Quarter of 2010 exports, lead by pineapple and bananas, grew 11% with respect to Q1, 2009. However, as might be expected with cheapened dollars, imports increased 24% in the same period, widening the current account deficit.
The principal foreign exchange earner in Costa Rica is tourism, an industry with income in dollars but expenditures in colons. For visiting foreigners Costa Rica is no longer a bargain. When word gets around in the United States and elsewhere that their dollars don’t go very far, tourism will suffer.
An overvalued currency is a deterrent to foreign investment, a central element in the development strategy of the Arias government and the current administration. For a foreign company to establish and operate a business in Costa Rica they must exchange dollars for colons and these won’t go nearly as far as they should.
There are many thousands of foreigners resident in Costa Rica that depend upon pensions or other income in dollars. In the months since late 2009 foreign residents have been hit hard in their pockets, a 15% decline in value of the dollars they exchange, plus suffering additionally from a 4% domestic inflation in the cost of goods and services. The nation has programs to attract foreign retirees that will fail if their dollars won’t go very far. So too will programs like medical tourism suffer.
The real estate market is negatively effected by overvaluation of the colon. Sellers almost always list their property in dollars, so there is now a higher price. This is a problem in that many real estate sales are to foreigners. This problem is seriously compounded by the appreciation of real estate values over the last decade. Even during the 2008 and 2009 financial bust and international recession, when real estate most everywhere in the world was falling in price, this was not generally the case in Costa Rica. There has been a highly inelastic price response to abundant offerings of properties of all types and falling demand. All real estate companies report a substantial decline in business.
The current exchange rate opens the door to currency speculation. Windfall profits will accrue to those who buy dollars when the rate is near the floor and sell them for colons when the rate returns toward the upper limit, as should eventually happen, assuming the Central Bank authorities have any sense.
In fact, the drop in the value of the dollar when the same currency is strengthening against the Euro is related to an apparent influx of speculative capital and wealthy Costa Ricans changing currencies. In the United States and Europe interest rates are very low and the economies stagnant, whereas in Costa Rica interest rates are quite high and the economy, so far at least in spite of high interest rates and tight credit, is modestly recovering.
Why the Central Bank maintains high interest rates while the economy needs stimulation is one more indication that something is wrong in the higher circles of power. So dollars and Euros enter and the local moneyed elite move around their liquidity, but not necessarily into productive investments. The interest rate on bank issued Certificates of Deposits has fallen in the last nine months to an average of 2.5% so this is not where capital is flowing. Both private and state banks here carry their accounts in dollars and banking assets have fallen as the devaluation is recorded as operating losses. However, this does not mean that banks and other financial entities are not in receipt of these dollars. Data is just not publically available to determine where the dollars are coming from and where they land– or how much money is entering and being laundered from illicit activities.
In reading what little is available on the Costa Rican exchange rate there are some innuendos that the wealthy friends of Central Bank officials and the PLN hierarchy are scheming to enrich themselves through currency speculation. It is certainly the case that PLN personalities have a cozy relationship with the moneyed interests; this became very clear in the great debate over CAFTA. However, I have found no evidence to lend these assertions any credibility. After all, Costa Rica has indicted three former presidents for graft, so it is difficult to believe that corruption on this scale could be involved. Rather, it is the ideological blindness of official thinking that is the problem.
It is important to keep in mind the experience of Argentina in 2001-2003. That country experienced a complete economic collapse due in good part to pegging the peso to the dollar so that the peso was overvalued by a wide margin. Dollarizing meant surrendering control over monetary and fiscal policy. Then to make matters worse productive state enterprise were privatized at bargain prices to local and foreign capital. State policies allowed a great inflow of foreign loans and speculative capital. Argentina under the left of center Kirchner government recovered in subsequent years by devaluing the peso, defaulting on foreign debt, ending speculation, renouncing the neo-liberal policies that created the disaster and reorienting its monetary and fiscal policy toward national development.
The overvaluation of the colon is a direct consequence of the policy of the Central Bank. According to the President of the Central Bank where the colon falls within the band is a strict function of the number of dollars as versus the number of colons in circulation. More dollars exchanged on the Monex, the money market for the large players, and at the state and private banks, means a fall in the value of the dollar.
I suppose such narrow criteria for establishing the exchange rate is to be expected from Costa Rican economists with a U.S. education and business administration graduates of Harvard, Wharton or other bastion of monetary orthodoxy. They are fully indoctrinated in the conventional wisdom of neo-liberalism. Two of key elements of this narrow thinking are that the purpose of monetary policy is to control inflation and that state guidance of the economy is contrary to the economic principles of free enterprise.
Central Bank officials have stated that the elimination of the mini-devaluations and adopting the system of bands was to have better control of inflation, moderate the trend toward dollarization, and to avoid Central Bank injection of dollars to protect the exchange rate, causing Central Bank deficits. Actually, the mini-devaluations worked reasonably well. For businesses the rate was predictable and it facilitated the export development strategy adopted since the 1980s. The rate was adjusted on the value of dollars and other traded currencies in relation to domestic inflation, although the spread between inflation and devaluation in most years meant an appreciation of the colon. Contrary to Central Bank spurious rationales, Costa Rica’s high rates of inflation, as well as the partial dollarization of the economy, have been consequences of its export-led integration into the global economy and really not to exchange rate policies. The current 4% rate of inflation, down from double digit levels previously, is a consequence of the slow economy, certainly not an overvalued colon.
One of the more absurd pronouncements by international business publications espousing the doctrines of monetarism and globalization is that every country should peg its exchange rate for dollars to the price of a McDonalds hamburger in the United States. Well, today a Big Mac in Costa Rica is about the same price as in the U.S. In this wisdom, it does not matter that the cost of labor that serves up the burger in a local franchise is 1/5 the cost in the U.S., or that the cost of constructing a fast food joint is 1/5 that in the U.S., or that buns and meat are lower priced, or that commercial land to locate a franchise is cheaper.
The McDonalds idea has more relevance if it is reversed. An intelligent exchange rate policy would at least in part evaluate the cost of the factors of production– labor, materials, and capital–in the national economy in relation to the values in the economies of trading partners. If these were the criteria than a $3 Big Mac in the United States would cost the equivalent of $.60 in colons. This price would have the added virtue of making the Big Mac affordable for the low-waged Costa Rican servers who dish out the burger. It would also help the deteriorating standard of living of ordinary Costa Ricans if the government development strategy would provide incentives for domestic production of food staples like rice and beans, also helping to keep famers on the land and out of the urban slums, instead of removing tariffs on the import of foreign foodstuffs.
Certainly controlling inflation and adjusting disequilibrium’s in the supply of currencies need be factors in monetary policy. But the essential goals of the policies of the Central Bank should be those of development of the national economy. This is accomplished by fiscal policies that allocate resources into chosen sectors vital to economic and social development and monetary policies that support the development goals established. The current and past political administrations in Costa Rica, blinded by their neo-liberal ideology, have no idea how to go about this.
An undervalued national currency is better than an overvalued currency, at least in relation to export booms. Perhaps Costa Rica should look closer at the example of China. The United States charges that China undervalues the Yuan to the detriment of the U.S. economy by the flood of cheap Chinese imports. While this is no doubt overstated, it is true that China carefully controls its currency exchange to promote its own economic development. Of course, this is not the main factor in China’s unparalleled success story. China rather turned Marx on his head; socialism laid the groundwork for a transition to a raw but vital capitalism. Not the neo-liberal global capitalism of the West, but a capitalism that utilizes the socialist tradition of strong state institutions that centrally plan the social and economic development of the nation.
Establishing an exchange rate that makes economic sense is just a first step for national development. Costa Rica would do well to strengthen its state institutions and define development goals, not by emulating China, but by leaving aside the dogmas of monetarism and neo-liberalism and replacing the Central Bank personnel with figures that look to Costa Rica’s strong tradition of social democracy and social justice and to its South American neighbors who have learned their sad lessons from 20 plus years of globalization orthodoxy and taken new, progressive directions.
China’s export-led development has meant that tens of millions of peasants are displaced to barracks in the industrial centers, work for a pittance and live in the most unjust of social conditions, while the bureaucrats and businessmen accumulate incredible wealth. On a lesser scale than China, growing inequality and social injustice are prime features of Costa Rican society. And this is mainly a result of the export-led development strategy, the abandonment of programs of genuine national development, such as food sovereignty, the permissive attitude toward business regulation and business activity while strong arming labor unions, the lack of effective ameliorative programs for the increasing problems of social inequality, and now the privatization of the very state enterprises that once formed the economic basis of Costa Rica’s social democracy. It is time for real change.
We have opened two accounts in the last couple of months at BCR, one is a personal account and the other is a commercial account. We are not residents. They both required the same thing, Passports, a utility bill and the first two pages of our 1040 (for the commercial account it was the companies 1040), the 1040 is so an accountant can certify your income, which allows the bank to know how much to allow in. I think our local lawyer also had our corporate documents with him. We were able to use the accounts the same day. It was easy but time consuming, took about an hour for the personal account and 2 hours for the business one. but we did have our local Lawyer with us, who seems to have a great relationship with the bank staff.
Now why would you have a bank account in CR? If you have a house you can pay most of your bills from anywhere via online. Lower fees to withdraw money then using your American ATM card. There are others especially if your running a satellite office in CR but this question was about personal, thus I won’t talk about the business end.
If you own a house here and have to pay bills, the trouble to open the account is well worth it at least IMHO
oops, one thing I didn’t mention is be cautious with wind in Costa Rica, It may actually be too windy for safe operation of a turbine, I have seen several get blown away in the states with much lower wind then you can expect in top of a mountain in Costa Rica especially during the dry windy season.
Hi,
I’m no expert on this but I do know a bit about solar. As we have a 4.3 KW system and 64 square feet of hot water panels in North Carolina. Yes, you can do this, don’t let anyone scare you off. Our system is grid tied but the only difference is the charger and the batteries. The most important thing to start though is a site evaluation. This will determine solar, wind or hydro or a combination. If you go with Hydro and have a good clean reliable source with great head, I would not even get a backup system, for the other two I would get a small propane generator. Anyway, study your site, I’m sure you can get it to work and for $25,000, you should be able to get enough batteries and equipment to supply a load of at least 12kw per day. We only use 6kw on sunny winter days (as have passive solar) but in the summer with AC and a pool running 5 hrs a day, we use a little over 20KW. Of course you can get a large propane tank and use it for cooking, backup hotwater, dryer and even refrid. decreasing your power greatly. If your not into TV and you use efficient appliances and a little propane, I bet you can live on less then 6 kw per day. A high efficient refrid about 21 cubic feet uses about 1kw per day, figure on a KW for your water pump, A high efficient washer gets about 250 watts per load. Anyway you get the point.
CIMA does take some US insurance plans including BCBS. I can tell you this for Physical Therapy its $32 per session including ultrasound. In the US its $100 per session without the ultrasound.
Stats are difficult sometimes to really understand…..Serious crime is probably reported in CR (murders etc.) accurately so it definately appears Costa Rica is safer but petty crime is probably not reported here and I have not seen any stats on that, but I bet CR would be significantly higher then the states and most other countries. I can’t speak about Panama, I have never been there but surely CR does have a problem with petty crime, Just take a walk in any part of the country and look at the bars on the windows, I have been told this is a cultural thing, No I don’t believe it, they are there IMHO to prevent crimes. There is also private security guards in just about every major store, Bank, etc. and I’m not talking about the normal complement expected as in the states, they wouldn’t be paying these folks for security if there wasn’t a crime issue. Every country has its pluses and minuses. Costa Rica has many, many pluses but on my list petty crime is a big minus (the biggest). I don’t think many people move from the states to CR because they feel safer. I would think most of us living in CR would pay a little extra tax if it would make the country safer from such petty crime. I personally don’t like locking up the house and turning the alarm on every time I leave. But you sure can’t beat the nature here and they can’t steal that from you.
[quote=”DavidCMurray”]Imxploring’s experience does not exactly mirror our own.
Cars are much more expensive to buy, own and operate here because so much of what’s involved is imported. We pay four times as much in car insurance for one three year-old SUV as we paid on the beach in North Carolina for two similar vehicles. And the annual marchamo (what you pay each December to keep it on the road) is $800US.
Electricity rates are climbing and close to a par with what we were paying in 2005. Cell and landline phones are much, much cheaper. Internet access depends on how you do it. Postage is cheaper than in the U.S., even for mail to the U.S. (go figure).
Anything that originates in Costa Rica (food, especially) will be much cheaper but anything imported (food, especially), toiletries, appliances and imported furniture, imported tires, electronics including computers and printers, printer ink cartridges, shoes and other clothing, will be more due to Costa Rica’s high import duties.
Housing prices are all over the place. You can probably spend a million dollars on a high-end condo (if you could get the financing) or fifty thousand for a Costa Rican-style home that may keep the rain out but which you’ll find otherwise to be none too comfortable.
The cash cost of medical and dental care is ridiculously cheap. Enrollment in the state-run CAJA medical system is startlingly cheap. A private insurance policy from INS will be much more expensive (especially if you’re older and/or have any pre-existing conditions, which INS probably won’t cover) but it will afford you more freedom of choice of care providers and more timely access to care.
Costa Ricans work for a minor fraction of what Americans work for, so you’ll be very pleasantly surprised at what having things done for you will cost. And generally the quality of the workmanship is pretty good. And you’ve not previously met such industrious workers.
Real estate taxes are absurdly low, but there is a national 13% sales tax applied to virtually everything. And American citizens continue to be liable for income taxes in the United States regardless of where they live. There is, however, a foreign earned income tax exclusion which may provide some relief.
Edited on Apr 11, 2009 12:33[/quote]
I know this is an old blog but wanted to share our experience with comparing price with that of Atenas to that of chapel Hill North Carolina. I’m quoting David because He seems most on target for what we have seen based on location. but here are some further details.
The Farmers market fruits and vegetables are 1/3, process foods, sodas etc. seem to be slightly more expensive in Atenas. Don’t know the price of beef as we don’t eat it, we eat very little chicken and typically at a restarant, not sure the cost difference other then do say chicken in Costa Rica is more tender and taste great. If you do things legally (INS rates etc.) hiring people to do general office staff (considering taxes etc.) you can hire 3.5 Atenas workers for 1 chapel Hill worker. Car Insurance is 4x as high in Atenas, Real Estate taxes are about 10x lower in Atenas, Homeowers insurance is about 40% of that in Chapel Hill. Electricity at the low usage is the same per KW at higher usage Atenas can be significantly more expensive, however, over all Electricity tends to be cheaper as no need for A/C or heat.
A session of Physical Therapy is $32 (including all modalities, ultrasound, electric simulation) at CIMA. In Chapel Hill, charges are $100 for the same treatment without the modalities. The Caja is extremely cheap but won’t pay in the private hospitals like CIMA. The INS regional plan (accepted at CIMA) (our age 39-43) is about 10 times less then our BCBS policy, the INS international plan is about 40% of the same policy. Not sure though how good the INS pays it claims or their denial rate or the red tape to get reimbursed. Gas is about 35% higher in Atenas. Laptops 2x higher in Atenas, most other electronics 50-75% higher. There is Gringo pricing, meaning Gringo pay higher in many stores. This can be expected in stores that don’t have prices on their items. Send a TICO (which is what we do for almost all our major buys) and you will save. Here is an example, the price for a wireless router decreased in the same day by over 10,000 colonies when we send in a Tico to buy it. Of course you can experiment for yourself, we have been using Tico friends for such stores, Of course don’t let the store keeper see you with the Tico. For DSL in Chapel Hill $35 for 3M down and .5 up. Atenas Cable Tica, for cable internet 4m down and 1 up $130. Yellowstone National Park $25 per car or $12 per bike or walker. Manuel Antonio $10 for non residents, significantly less for residents.[quote=”2BNCR”]I paid $400 to have my car insured from Port canaveral to Limon.
Like I said you have your skivies in a knot for very little considering all the things that do and will go wrong in Costa Rica. Remember Pura Vida Happens. No I do not work for the shipping company but you are so typical gringo with the attitude that people in Costa Rica are going to make you whole after you complain. You ain’t in Kansas anymore and although you can fuss and fume and bang the table all you want that doesn’t play here.
I know you itellectually understand this, but can you accept it?
The ansewer to that question will determine if you can make it here or not.
Costa Rica is not for siisy who cry foul for whatever small reason.
Just wai until you get involved in a court battle here, or even try to get compensation or even a fair bill form ICE or the AyA. If this shipping episode has you playing the “Ive been wronged” card, just you wait.
I suspect after several month you will be thinking “Jeez, that guy on the fourm was right – Pura Vida happens everywhere here…”
Prepare yourself or don’t cancel that return ticket![/quote]
Your right on here, I was hoping that the People of Costa Rica would buy me a new car and I do expect it to be personally delivered by Laura Chinchilla. Hey if I’m big enough “siisy” maybe they will give me some of your Pura Vida that you like to use and buy me a house back in the United States. I expect I will need that house after they charter me a plane to the US after I am “involved in that court battle”. You could even be an expert witness at the “court battle” the answers to your questions no doubtingly will determine if we can make it here or not.
Can you please enlightening us on an insurance company that would insure an individual for such transport. I just did a google search and found a company that will insure you if you go with a licensed company (I’m guessing that means licensed in the states). Are there any licensed shippers that ship cars to Costa Rica? I know shipcostarica is not registered in the state of Florida (thus not licensed). Also you may want to check with Crowley as they do insure your vehicle on their watch (of course, I don’t know if that is worth anything) but at least they do a before and after inspection. Wouldn’t it be just easier to have the shipper have a contract with an insurance company to cover any loses that they may occur during the process? Thanks for your insight.
It is true that our Car insurance company would not cover the car out of the USA (Geico), I’m guessing most others won’t.
Actually my research on this site suggested shipping cars here, at least that was my take when I searched the topic.
I will say this, just because it didn’t work well for me doesn’t mean it won’t work for others, but I personally would not go with any shipper that wasn’t highly recommended (this shipper was on this site) and most importantly a shipper that wasn’t fully insured).By the way, Crowley (the actually cargo ship, where the car is placed and processed) is fully insured and does do an inspection on your car when its dropped off while you are there and I’m told does the same when the car is dropped off in its destination country, it is inspected with either the owner or agent representative of the owner. If the car is damaged by Crowley, there insurance will take care of it. I’m not sure though when the final Crowley inspection is (before or after customs). but I bet you can’t get to your car before the customs inspection, thus the Crowley inspection is done after customs. If I’m wrong about this please correct me. If there is any doubt, I can call Crowley about this. Basically, I am disagreeing with the above post, If items were damaged or stolen on the boat or in the ports where Crowley is you are covered. I assure you Crowley ships thousands of cars a year all over the world, and if you ever have been to their port in Florida, its extremely secure. Of course nothing is 100% that is why there is insurance.
