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Don’t get me wrong, I did not mean this in a bad way. For me, if there’s loophole in the law and somebody takes advantage of it, then he is not breaking the law – the law IS broken. I’ve met quite a lot of parents here because of my kids going to school, quite a number of them are from other countries – Argentina, Chile, and those I mentioned. I think practically all of them have not applied for residency or pensionado but are here through other ways, child born here, married to a citizen, etc. Did they do anything wrong? Of course not.
With respect to those that are here via residency or pensionado, they are required to put in a certain amount of money into the economy. From what I see, they spend a lot of money here (I’d think at least $1500-2000 per month) and that money does help the economy here. So, I see CR benefiting from these residents much more than what they get from those that are not here with the residency/pensionado, purely from an economic standpoint. Now, with the proposed changes, all logical thinking would lead to the conclusion that it would practically stop all application for the residency program and greatly reduce those applying for the pensionado. Its definitely their prerogative to do this, but like I said, it defies logic.
Interesting thread. The issue here is that Costa Rica (which they obviously have every right to) can always change the laws at ANY time that would affect foreigners living here. Does it make any sense to me what they are proposing to do? Absolutely not, but that’s one of the risks we took coming here. But like I said, if they think this is for their benefit, then its just something we have to live with. From what I can see, the pensionados or rentistas are hardly taking away anything from the country and are rather bringing in money. Those that are taking advantage of CR are rather the Nicaraguans, Chinese, Columbians and lately Venezuelans who find loopholes to gain residency. I am not upset or anything its just one of the things that doesn’t make any sense here along with a lot of things.
Unfortunately or fortunately, we are moving back to the US at the end of this year after trying it out here for just over a year and a half. There’s a lot of good things, but also many negatives living here and just one example is this change in the residency laws. Again, for me this punishes those people that are actually trying to obey the laws. But its not up to me to judge if this right or wrong for the country, just not logical. Fortunately I realized early on that there’s too much of a risk investing here either buying a house or putting up a business because laws can be changed very easily especially against resident. So although it does not affect me anymore, I do hope that they realize that this new law would have a bad effect rather than help the country. If it does pass, I just can’t see a lot of Americans or Europeans qualifying for this, and if they do qualify, I don’t see why they would risk such huge amounts of money. ANyway, good luck to all and overall it has been a good experience for me and my family.
I’m always lost when people talk about opportunity. There’s always opportunity everywhere/anytime, all you need to do is do your cash flow computations and you’ll know if its a good opportunity. Would you buy a $400k that would rent for $1500??? That’s just an example, but you know what I’m driving at.
Do your OWN homework and figure things out yourself.
One of my co-workers just got robbed in San Jose Thursday night around 7:00 o’clock. He wasn’t coming from the bars flashing money, just walking a few meters to his car after work. ALL of the people I’ve asked have been robbed, mostly in San Jose, some in La Uruca, Bello Horizonte, Alajuela, ALL MORE THAN ONCE, these are Ticos. I leave work and never uses the bus at night because you are guaranteed to be robbed walking the 2-3 blocks to the bus stop. When I wait for a taxi in front of our building, which has 4 security guards, and typically 2 fuerza policia, I wait NOT on the sidewalks, but above the steps, always have my back against a wall.
You don’t know what you are talking about. Don’t give readers false sense of security, especially in San Jose. After 7:00PM, there’s much less people around San Jose – Paseo Colon, and it becomes very very dangerous.
On Tico Times, another american was reported murdered this week. For being only .8% of the population, Americans do get a big percentage of the crimes.
Somewhat of a bizarre problem here. We always say that crime is out of control because criminals get away, yet we are worried that the same courts that lets criminals walk would somehow be very efficient in prosecuting us, if we get in trouble due to liability.
By the way, here’s an interesting anecdote. I went out to lunch with fellow co-workers and somehow topic shifted to crime. I was curious because I wanted to see a typical Tico experience with crime. ALL 5 of those I had lunch with have been robbed, ALL more than once (one was robbed 4 times). So if you haven’t been robbed, you’re probably spending too much time in front of your computer…..
All the gringos that I have met has experienced crime. The last couple we met got conned by fellow expats. Its sad, but considering that there are about 40000 US/Europeans living here, we do seem to get a significant percentage of the crime. Are we targets, of course, but there are steps you can take to lower your odds of being robbed.
i will say this, i’m 46 and i’ve owned the home for 12 years and i’ve never put a second on the home. i’m a fiscal conservative and vote repub purely for that reason, not for any social reasons.
First of all, if you call the last eight years fiscally responsible/conservative then you are insanely blinded by your party affiliation. I’m a centrist, don’t like both parties, BUT I just hate it when people simply vote blindly just because they believe in the party (whether DEM or GOP). Its very unamerican quite frankly. I’m also from the Bay Area, where we definitely have more people with degrees than a thermometer. Use your head and decide for yourself, not your party.
For Maravilla, I always have a hard time when people bash the US. The same people that takes advantage of everything it has to offer, and then bites the hand that fed them. Ask yourself this, would you have even been able to apply for that residency had you not worked in the US? I doubt you could have saved that $60k working here in Costa Rica.
And explain to me ‘how’ far overpriced could it have been if someone just purchased it?
From an investment standpoint, its quite frankly a ridiculous investment. Let’s see, for a $415k house that at most could be rented out for probably $1500, then you factor in vacancy, ‘oy caramba. Any decent investor does not even need to put in these numbers in a spreadsheet to see its an awful ROI (return on investment). HOWEVER, if you are buying it not as an investment, then anyone can pay to their heart’s desire.
Surely we could only call “far overpriced” if nobody wanted to buy it at that price? Because we know that the buyers OBVIOUSLY didn’t feel it was overpriced.
Have we not learned anything from the real estate crash currently happening in the US? Hoards of people even lining up early in the morning for a chance to buy a house in new developments. OBVIOUSLY they didn’t feel that it was overpriced, now we see the same properties being auctioned off for less than half price. Public sentiment means nothing when you do valuation on anything. Its all about numbers, return on investment is key.
I am not saying all real estate here is overpriced, some are – some probably not. But the one you posted is way overpriced, at least to me and how I valuate RE investment.
Yes, it does not need to be deposited in a local bank. However, there is somewhat of a catch. To apply for residency, you need a bank letter that states you have this amount. However, the bank letter required is worded in such a way that it is very, very difficult to get any US bank to sign such a thing. I found it almost impossible to get a bank to write me the letter, I actually had to go to a different state and open an account where they would be willing to do such a thing.
I tend to agree that the house you have just shown on the link is way (almost insanely) overpriced. Saratica, recently posted on her blog and made excellent estimates on how to value an investment property. I am not going to argue if prices have dropped 50% or not, or as you have said even appreciated. All I can say is, as an investment, the buyers have left their common sense back in the USA.
Here’s saratica’s blog http://www.abroadincostarica.com (It’s not a business or real estate site, just a family’s experiences after moving here to CR).
I personally would not like to take advantage of anybody, even RE agents. My take is: they are not worth the 5% or even 3% of what they earn, BUT I will not try to use them and try to get away from paying commission. That in my opinion is definitely not “kosher”. So, if you are trying to avoid using an agent, then do your own research and find that house you want and negotiate yourself. If you can’t do that, then use an agent and expect that he/she earns a commission.
I think the post said Country Day School in GUANACASTE, not the CDS in Escazu. What you have to realize is, the school can only be as good as the student population and how involved are the parents with the kids education. The best schools are truly around San Jose and Heredia. I have my kids going to a school in Santa Ana called Saint Jude.
One thing you have to realize too is that school costs around $320 – over $500 per month. Plus there’s a yearly matricula of about $500. Extra costs are bus ($35/month), lunch (another $30) and after school activities (swimming/ballet/soccer/clubs) which is typically $20-$30/month. Anyway, it does add up, but still cheaper than US or Canada for private school.
Good luck, there’s lots of resources that you can check to find a good school for your kid/s.
Interesting article, but my goodness I’ve never seen so much unrelated advertising embedded on an article as this one. Having advertising on the sides seems ok, but when the text is cut and ads placed in between, it breaks the flow. Just my 2 cents.
Yes, I totally agree with you there 100%. It definitely has lots of good things about it, most especially the one you mentioned which is forced savings. I am actually now looking at real estate as possible investment in the US. I just always look at the math and if the numbers shows good possibilities of returns, good margin of safety, etc then I’d buy. Right now, even with 30-40% drops in some areas, surprisingly it still does not translate to a value investment.
But I’m hoping. Anyway, thanks for your insights, they are very well spot on.
Short financials, it was clear as day to me, but the problem is, irrationality can go on much longer than you think. I was both short home builders in 2005 (MTH, DHI, TOL) and a few financials (DSL, FED), but it was too painful and can really break your portfolio unless you have deep pockets (meaning lots of cash in reserve, which also translate to money not being put into use). So you can see the dilemma here. I finally gave up, taking some loss but kept FED short and after more than 2 years, its a 87% gain for me. So my point is: even if it was a no-brainer its still takes tons of patients and lots of pain in between (enough to rock your conviction).
My only consolation is I stayed away from all financials, big or small banks, lenders, mortgage REITS, etc. Just like going long term, shorting is also a long term thing with an even more difficulty factor.
Again to put a broad statement and say buy RE long term would make you money is not exactly true. I say this because I always believe investment returns has to be benchmarked with every other possible investment option available to you. Would buying RE beat putting your money in the bank after 15 years, I’d say most likely. But put the money in the stock market (not just US but other global markets as well), then I tend to have my doubts. How about comparing it with putting your money in commodities or gold and other precious metals? In the last 4-5 years, an investment in precious metals would have easily beaten any real estate investment without the property tax, maintenance and other hassles. I’m not saying this with 100% certainty, just saying that we each have to scrutinize investments very carefully.
Again, just my 2 cents (which luckily is worth much more now in colones, exchange rate is 554 colones per dollar, yeah baby).
