Guanacaste - Did I already miss the boat ?

[sunny_8]

All,
I am a newbie trying to invest some money (60K) in Costa Rica. Realtors point me to Guanacaste. I am only looking to buy a lot of land or somthing.

The realtors tell me to buy in the Surfside Estates development. ONe lot is about 480sq meters for 55K.

They say I will be able to sell for upwards or 80K when the mariner opens.About 2 yrs....or so is when they think the 80-90K mark will hit for lots. 

My questions :

1. Is it better to buy in a gated community that is nearly all done with homes ? Resale ?
2. Is Guanacaste still looking like it will provide double digit returns ?
3. Single lots a good idea ?

What do I need to be aware of ?
Are the realtors pulling my legs ? I see tons of condo's on the market, from 100K to 400K, SFH for 400K in the same area.

The Lot I am looking at is 3 blocks from the Beach, 3 min drive from the "Flamingo mariner", its at the Playa Potrero area. Its not in a gated community and  I will look to sell it in 2yrs.

I read that a lot of hotels are building there, and that Guanacaste is the hottest place right now for development, which began about 2-3 yrs back. Just not sure if I missed the boat and if prices will continure to rise ?

I am thinking I cannot lose being 3 blocks from the beach....where homes are 325K right now....what you guys think ?
I am not trying to double my investment, but simply make 10-20% in a yr.
Wondering what the market is right now out there ? Market hold time etc ?

Thanks to all.....sweet board !

[Russ]

Welcome to the forum "sunny".

I have asked our Flamingo Beach office to weigh in on the subject of Surfside, but I can definitely say that Guanacaste is still a good investment in a 5-10 year horizon.  I would point out an old saying in investment, which is you make your profit when you buy, not when you sell. You seem to have reasonable expectations for your investment and the lot you are looking at seems to be reasonably priced at $114.85 per square meter.  As I remember the Surfside Estates have good roads and all the services are in, does the lot come with a phone line?

This development had been stagnant for some time and there should be an increase when the marina is active again.  I believe that in 3 years, with the marina in service, people will have a hard time finding a building lot 3 blocks from the beach for $75,000. So your expectations are in line.

Also make sure that when you invest money in land that you plan to sell for a profit that you don't have a specific date you have to sell by.  For example, with a balloon note that you have to pay off on a certain date.  If you have to sell and it is still a buyer's market, like if the marina is delayed further, then that's where people lose money.

[sunny_8]

Thanks Russ, that gives me confidence. Just that Realtors can say what they want to sell a place.

What is the selling comission usually ?

Also what do you look for when choosing a lot ? Like you said phone line, water electric etc...as far as the lot I am not sure what to look for.

I plan to take a home equity loan for the lot, it has a fixed rate which I can afford for 5yrs, so I will be able to keep the lot for at least 5 yrs.

Anyone else's comments most welcome.


Thanks

[RE Attorney]

Hi Sunny,

I am not a broker but based on my experience I have seen commissions between 6/8%. In addition to the utilities, I will check that the lot has legal access (public road or right-of-way easement), if there is any encumbrance affecting the title to the lot that may restrict your ownership. Regarding the water, I will check where the water is coming from. There are several development with covenants, conditions and restrictios (CCR's) so you have to check if you can live them. If you desire, I can, at no cost, review the title to the lot for you.

These points came to me. Good luck.

Oscar

[Russ]

The normal commission rate is 5%.  Often developers pay less commission, and the realtor and the owner can agree to a higher commission, up to 10% is normal.  The higher commission rate is normally on farms in more remote areas, but can be agreed to on lots that have a lower value.