Costa Rica Investments vs. other capital markets

With the uncertainty in today’s financial markets and US real estate markets, Costa Rica investments are concerned more so than ever about the value of their investment options. Markets such as Florida attract attention because prices are so drastically reduced, but the savvy investor knows the real value of the underlying property, not just the percentage reduction that is being advertised.

Because the capital markets in the US were so open to nearly anyone wanting to make an investment, real estate prices were driven to all time highs. The prices at the peak of the market were a function of the available financing more so than their actual value. Now that the financial markets have contracted, prices in various real estate markets around the world have made obvious adjustments. Despite all of the adjustments and concerns, real estate prices in Costa Rica investment markets have been relatively insulated. The reason for the Costa Rica Investments stability is found in the conservative investment approach. For foreign clients interested in financing, they should plan on a down payment of 30% while Costa Rican citizens can finance up to 90%. It is not uncommon for many buyers to pay for a property outright in cash. In fact, nearly 80% of Coldwell Banker Jaco real estate transactions are cash purchases.

The requirement of having a larger down payment reduces the pool for potential buyers and that pool of buyers is highly qualified and very knowledgeable. Because the clients that participate in the market in Costa Rica have the ability to produce conservative down payments, they also have lower principal amount on their mortgages (if they have one at all). Highly qualified clients with reduced carrying costs are well positioned to maintain their monthly payments even in the toughest of times. The result is that owners decide to sell, they are not forced to. Of course, there are exceptions to this, and when great deals come on to the market they do not last long.

From the perspective of an investor looking to move forward in today’s market, wouldn’t you rather invest capital in a market that has been one of the best performing markets during the good times and the bad? Or would you invest in a market that consists of properties where the values were falsely elevated and are now selling at a discount of that inflated price without considering the real underlying value?

How do you know the value of what you are really getting if you invest in the latter of the two? If one looks to historical performance to gauge future performance, hands down Costa Rica is better choice for investments. In Costa Rica you will find stability in the capital markets, stability in the real estate market, stability in the resale market, and low cost of living. There are very few locations in the world that have this type of performance given the current economic conditions in the world.

In Costa Rica, for sellers that do need to sell their property, although they may sell at a reduced price relative to competing properties, we have found that they been able to liquidate without losing money. If you are interested learning more about Costa Rica investment opportunities that have beat market averages or will act as stable investments in uncertain times, don’t hesitate to contact us. Coldwell Banker Jaco has helped hundreds of clients find their own Costa Rica investment opportunity, why not you? We can help you find yours.