What is Concession Land?

Several areas of the country, mainly the ones affected by the Maritime Zone Law and located adjacent to the ocean, are not subject to private ownership and their possession is granted as a concession which could simplistically be compared to a lease made from the government for a specific period of time.

Concessions are difficult to examine and in many cases the prospective buyer will not be able to get a good level of certainty on what is being acquired.

This type of transaction should be avoided if pieces of land with similar conditions and titled can be found; otherwise, additional caution must be exerted.

What’s the process of finding land in Costa Rica?

This is a fairly straightforward process with a hint of complication.  First and foremost, research and visit the country.  Don’t start the buying process if you’re not sure you want to live there.

Second, once you’ve decided to pursue this direction, find someone you can trust.  Preferably a referral from someone who has already purchased property in the area you’re looking at.

Third, create a budget and stick to it!  Costa Rica is beautiful and intoxicating and it is very easy to get caught up in the romance of living in paradise.  This leads to the, “I’ll take it no matter what.” syndrome.  I can’t tell you how many clients I’ve had that were willing to stretch themselves so far financially that they’d be eating beans and franks for the next 10 years in order to afford their property.  Not a good situation to be in.  Many times I’d simply tell them no and find something more affordable.

Once you have found a piece of property, due diligence is required to confirm that the current owner, actually is the owner.  By law all properties must be registered in Registro Publico. Most properties have a title registration number called the “Folio Real.” Once you have this number you can search the database. The Registro Publico’s Report, called the “Informe Registral,” contains information such as the name of the title holder, boundary lines, tax appraisal, liens, mortgages, recorded easements, and other records that could affect the title.

How Are The Costa Rican People to “Outsiders”?

I’m often asked: How are the Costa Rican people to “outsiders”?

In a word…fabulous!  I’ve never been to a place where the people are so courteous and polite.  I’m not just talking about the ones working in the hospitality industry either.  The gas station attendants, the auto mechanics, the landscapers and even the trash collectors are pleasant to foreigners on a daily basis.

Why?  Well I can only speculate, but I believe it’s because of the higher education that the citizens receive (96% literacy rate).  Meaning that they understand the concept that visitors to the country means jobs and a steady paycheck.  They recognize that progress will only benefit their families and community.

I have been to areas where employees of foreign developers have gone from living in shacks to living in brick homes and driving nice vehicles.  It is evident that they appreciate the fact that they have a job, as well as the opportunity to learn a trade and move up the ladder of success.  Many employees pass down what they have learned to their children, thus insuring that the future of their family is somewhat secure.

Others benefit from the increase of the local economy through a rise in the population and income brackets to secure jobs in service and repair businesses, as well as their own family businesses, producing long term and high quality jobs for all to gain from.  In other words, a local resident may love to build furniture, but hasn’t had the opportunity to make a living at it because there wasn’t enough business in the area to support him.

Now, add a few thousand jobs to the region, plus the addition of the foreign population and voila… our furniture builder now has a much larger market to sell to, as well as the ability to increase the price (and hopefully quality) of his goods because there are more people making more money.  Its basic economics that the residents understand, value and appreciate.

How Many People Are Moving to Costa Rica Now?

There are many, many people moving into Costa Rica for all different kinds of reasons.  Some for the warm tropical weather, some for the laid back lifestyle and others…

…..well we’re not sure about them.

No matter what the reason, the amount of people moving into Costa Rica has been on a steady climb for the last 8 years.

As a matter of fact, right after 911 we saw a substantial spike in both property sales and foreign residents.  Currently there are about 50,000 expats (a term referring to expatriates from other countries.  Although this terminology is rather harsh, everyone seems to get lumped into the category.  More on this in later post) in the country, which is a considerable number compared to the country’s small 4.2 Million population, with more than 700,000 American citizens visiting Costa Rica annually.

The residency laws are pretty straight forward, as well as their visa laws.  In a nutshell, if a person is visiting, they can stay in the country for 3 months at a time and then must leave for 3 days.  This keeps many of the border hotels quite busy with weekend visitors.

Once you apply for residency this rule no longer applies.  Residency in itself is another straightforward process, they ask that you fall into one of three categories; One, you have employment in the country prior to moving in.  Two, you can prove you have ample funds to live off of (i.e. retirement, IRA, etc.), Three, you are opening a business and providing jobs for the local residents.

What Should I Know About Buying In Costa Rica?

Assumption kills the deal. 

In my dealings in investing in foreign countries, assuming that something is included with a property usually will end in disappointment. 

It is always better to be safe rather than sorry, and one way to do this is to be crystal clear about what is included in the purchase, and what is not.

Assumptions will often end up in the seller’s favor, which, as a buyer, isn’t where you want the balance of power to be.

Things to consider:

• Public or private roads?
• Electricity?
• Water?
• Is the land clearable? (Many trees cannot be cut down)
• How does the region change from season to season?
• Does the seller own the property?  Can they prove it?
• If a development, will there be annual dues?

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