Ask the Right Questions When Buying Real Estate in Costa Rica
Stranded asset is a financial term that describes an asset that has become obsolete, or non-performing, but must be recorded on the balance sheet as a loss of profit. The term has particular relevance to pricing long-term economic and environmental sustainability. Wikipedia
Many of us have heard of Real Estate scams or have had the unpleasant experience of falling for one. In truth, scams, rip-offs or just promoting way more than you can deliver is a bit like bio-diversity; it comes in all shapes, sizes, and colors, and tends to flourish in certain kinds of environments. The sophisticated promotion of Pura Vida in Guanacaste has led to a plethora of graceful gates, superb web sites, and an increasing number of disappointed buyers left “high and dry.”
Typical complaints, include, “no road to my lot” or “no water, power, bridge, etc.” We encourage buyers to do their homework, to look before they leap. Here is a punch list from our own developers who have helped many buyers find “mas Pura Vida y menos pesadillas” (More Pura Vida and fewer nightmares).
1. Water Supply
As Mark Twain observed “You only appreciate the value of water when the well goes dry.” Remember, Guanacaste is a extremely arid for much of the year. A reliable source (or two) of water is a must and should already be in place on the property.
Trust, but verify. Ensure that power, (again) water, and other must-have amenities on your hit list are in place. Promises of using your investment to complete utilities is putting faith in someone who in the end may not be able to deliver what you paid for.
3. Functioning Homeowner’s Association
Who are your future neighbors? How do they get along? How do they work out ‘issues’ that come up? If they can’t agree on budgets it can affect levels of maintenance and the livability of the project. There simply has to be sufficient funding and staff to guarantee that your investment won’t become a ‘stranded asset” and a broken dream.
4. Quality Road Access
Most visitors have no inkling of the flurry of road repair that goes on as ‘high season’ approaches. Potholes filled, gullies smoothed out and washed-out stream crossings rendered passable once again. Talk to developers about rainy-season repairs to the roads and find out what happens if a flood or other water-related emergency makes the road impassable – a near guarantee at some point. Are homeowners left to fend for themselves or is there a plan in place to take fast, corrective action?
5. Clean Title
Ensure that the property you are looking has a clean title before signing any paperwork. Even if everything else on your checklist is satisfied, a problematic piece of property (for example, taxes not up to date or inconsistencies in the national registry) will result in seemingly endless work with the courts, banks, and lawyers.
6. Proximity to Businesses
Restaurants, supermarket, mechanic, doctors, hospitals, banking, etc. Considering road conditions and gas prices how far you want to drive for a carton of milk, lunch, or the ATM.
7. The “Intangibles”
Is there a sense of community, a connection with local culture, and a shared concern among residents for the natural world that surrounds us?
The Internet provides unscrupulous promoters with a platform to present the best possible scenario. The problem with ‘virtual’ is that it’s hard to verify. And that’s why you want to learn everything about the good, the bad and the ugly before you buy a plane ticket and buckle up. Use this list to ask the right questions up front and save the headache for after your housewarming party in paradise.