There is renewed interest in Costa Rican real estate, in part because some owners are willing to accept offers.
A new rental law is supposed to make evicting deadbeats easier, thereby increasing the value of investment property.
There even are more new firms that say they can help English-speaking foreigners make the transition to expat. Some are former real estate brokers emerging under a new name and with new business plans.
Costa Rica, of course, took a bigger hit than most nations with the economic downturn, and the failure of some development firms, like Paragon Properties, cost would-be expats millions of dollars and their dreams. Some high-profile firms and even some scammers gave the country a black eye.
Lawmakers passed the revised rental law July 30. The law covers the process of evicting a tenant for non-payment of rent or for failing to provide promised services, such as caretaking. Among other changes, the proposed law provides for a speedy and oral judicial hearing. The changes are designed to eliminate the way in which deadbeats could use the court system to live rent-free for months and even years.
Those in the rental business are optimistic, and real estate agents say they think that a speedy court process will increase the value of rental properties. Some lawyers, who have been disappointed by previous legal changes, are adopting a wait-and-see approach.
Among companies trying to take advantage of what may be a change in economic fortunes is International Living. The magazine announced by email over the weekend that it has created an online membership organization for would-be expats planning a Costa Rican move.
Also this weekend, Hanz Lepik, a 10-year resident in Grecia who has been involved in real estate, announced the beginning of his new firm, Your Costa Rica Advisor, which goes beyond brokerage to provide information and help on many aspects of life here.
Lepik joins the list of many individuals and firms that provide residency assistance, property tours and assistance newcomers will need.
The upward trend still has some bumps in the road. An increase in crime, particularly home invasions, has caused some expats to leave and others to consider doing so. One Puntarenas resident, shot by an intruder, is back in the United States and has cut the asking price on his beach view home by $100,000.
A Judicial Investigating Organization report last week said that all reported crimes were up about 11 percent. Many residents do not report crimes because they feel that no action will be taken. One home invasion victim said he clearly identified his attackers but they still are walking the streets.
The real estate recovery does not seem to be uniform. Although there are favorable indications from the Pacific coast, long-time San José broker Frances Chambers said Sunday “Guanacaste is like another country.” She said that real estate remains flat in the capital with more sales of lower-priced homes than of those in higher ranges.
International Living, in its highly uncritical, promotional message, describes the country as akin to an earthly paradise.
Publisher Jackie Flynn expends 9,000 words in a promotional video stressing that “Prices for everything — from food to real estate to a hip replacement…are more than affordable.” She also says that it is “incredibly easy to establish residency here and qualify for CAJA,” the nation’s health care and pension system, the Caja Costarricense de Seguro Social.
In addition to retirees, the message seems to be directed at young families. A writer for Ms. Flynn, identified as Jason Holland, is quoted as saying he moved here because he lost his job in Florida. He and his family now live in Tamarindo.
Ms. Flynn also cites the experiences of Tom and Kay Costello. Mrs. Costello operates the well-known Kay’s Gringo Postres in Atenas. Ms. Flynn quotes the husband as saying ” . . . if you focus on what’s important, you can live pretty well in Costa Rica for just $1,200 a month.”
Life in Costa Rica will give new residents “more time and more money to spend as you like…no taxes, no inflated prices, no more worries about outliving your retirement nest egg,” said Ms. Flynn.
Many expat residents would disagree with Costa Rica being a cheap place to live. In fact, several said they are moving elsewhere because of the rapid increase in prices and the static exchange rate that has kept the U.S. dollar in an unfavorable position.
Ms. Flynn does not discuss the costs associated with obtaining residency, which sometimes is a process of two years or more. However, she does ask would-be expats to spend $127 for membership in her Web site, which also has an annual membership charge. Her firm recently held a conference for would-be expats in Belén.
A flood of North American on tight budgets is a guarantee to swell the ranks of perpetual tourists and those employed here illegally, perhaps sufficiently to cause a government crackdown.
Adding to the uncertainty of the real estate situation is the change in government. Many in the property business favor Johnny Araya, the former San José mayor who is the nominee of the Partido Liberación Nacional. Some hope he will roll back legislation put forth by the Laura Chinchilla administration that they see as anti-business. They also seek a stimulus to tourism.
Elections are Feb. 2. The winner will take office in May.