Where to invest in costa rica?

Thank you for your interest in Costa Rica. As the most stable democracy in all of Latin America, sporting a beautiful climate and landscape Costa Rica truly lives up to it’s name.

The Switzerland of Latin America

In an effort to help you decide on where to invest in Costa Rica it is important that you understand the different areas of the country. Fortunately I have had the benefit of touring the entire country researching real estate along the way. Below is a summary of my conclusions for your consideration. Costa Rica is divided into seven provinces; Guanacaste, Puntarenas, Limon, Alajuela, Heredia, San Jose, and Cartago. If you want to be by the beach the first three provinces are on the coast.

Limon (Caribbean Side)

Although beautiful and less expensive the Caribbean side is not an ideal investment. The climate is too humid and as a result the area tends to suffer with severe flooding. Also the available infrastructure (roads, services, activities) are primitive at best. Finally the drive from the closest airport is over 3 hours and torturous even in dry season.

Puntarenas (South Pacific)

Includes, but is not limited to the following popular beach towns; Jaco, Quepos, Manuel Antonio, Dominical. Within the province of Puntarenas, but on the Gulf side is Samara, Norsara, Mal Pais and Montezuma. Given the number of areas mentioned I will address the investment potential for each area separately for your convenience.

Jaco This beach town is the most developed area in the country and offers good investment opportunities. But the Jaco market has in my opinion already peaked. Prices are very high and returns are lower than in other areas which are currently experiencing the same or better growth potential. Jaco was developed first as it was the closest distance to the coast from the airport. This all changed with the opening of the second international airport in Liberia. Now more tourists are opting to visit the coastal towns in Guanacaste. Although the country has plans to build a new highway reducing the drive time, this will not compete with the drive time to the Gulf of Papagayo.  Quepos and Manuel Antonio The Manuel Antonio area is known for its National Park and beautiful white sand beaches. The town of Quepos provides many of the services for Manuel Antonio and is popular amongst boaters. Depending on your budget Manuel Antonio is a wonderful place to live but the investment opportunities have already peaked. Prices are astronomically high and the returns are not as enticing. Beyond that the drive is even further than Jaco and even with the new highway one can expect to spend over two hours to reach your beach destination.

Dominical   This surfer town is poised to experience tremendous growth in the coming years. But given the strong surfing culture the area will never attract as many upscale housing projects or lucrative buyers. Beyond that the drive from Manuel Antonio is arduous and many tourists opt to not visit this sleepy town.

Palmar Sur If your investment strategy is a long term one you may consider Palmer Sur which rumor has it will be the location for the third international airport. Many prefer to live in such remote areas and for those individuals I can recommend a very reputable developer. Trying to develop your own property for services such as electricity and water can be very challenging. Also note that the area does not support any reliable communications including Internet, land or cell connection.

Drake Bay This region is one of the most beautiful areas of the country and worth a visit. However, unless you intend to run a tourist business many foreigners do not live here. To reach Drake Bay one must go by boat and thus it is very difficult to manage a property in your absence. As a very long term investment I suspect it could be very lucrative and worth considering.

Puntarenas (North Pacific- Gulf Side)

Includes, but is not limited to the beach areas of Samara, Nosara, Mal Pais and Montezuma. Samara and Nosara are getting more popular but both areas are a long way from being developed. Considerable distance from any airport these areas are often inaccessible during rainy season. Mal Pais and Montezuma on the other hand are much more accessible by taking a ferry boat across the Gulf of Nicoya. Like Dominical, Mal Pais is a surfer town but I believe this area has more investment potential given it’s proximity to Montezuma, which has some of the nicest beaches and is loaded with restaurants and tourist activities.

The Best Places to Invest -  The Gulf of Papagayo

I want to introduce you to the Province of Guanacaste (specifically the Gulf of Papagayo) and explain why many believe that the North Pacific is the ideal place to invest for optimum returns. The future development of the Gulf of Papagayo is evidenced by the number of developers and large resorts that have staked their claim here. The Gulf of Papagayo includes but is not limited to the following beach towns; Tamarindo, Flamingo, Ocotal, Coco, Hermosa and Playa Panama.

Playa Tamarindo This area is known for high rise projects which many feel is an eyesore and contrary to the ecological look and feel of Costa Rica. More importantly real estate is very expensive and has peaked in value. Water is also a big problem with no solution in sight. Finally, the areas in and around Tamarindo are still an hour from the closest airport on roads which are less than desirable.

Playa Flamingo is more upscale than Tamarindo but once again the drive is difficult at best and can be a problem during the rainy season. The distance from the airport is the same but the roads are worse. When considering Flamingo one should understand that it is not an emerging market so it takes a bigger investment and the returns are not as generous.  Fortunately the beaches are nicer and if you want to consider this area I have researched a project I would recommend which is managed by a sound and reputable developer.

Playa Ocotal The sleepy village of Ocotal offers a secure and tranquil refuge for residential communities. Already significantly developed, this area has countless luxurious residences which have already experienced significant price increases. Like Flamingo this area is not an emerging market anymore and typically top dollar is secured for re-sales. However, the area is uniquely safe given the topography and thus highly sought after. Beyond that Ocotal offers some the best ocean views and sunsets in the entire area.

Playa del Coco is more developed and a very popular beach town. The bustling city offers a variety of restaurants, lively clubs and countless eco-adventure tourism. Playa del Coco is a very hot emerging market and one to be considered seriously! Plans to build a marina are sure to bring significant increases to property values. Unlike Tamarindo or Jaco, Coco does not have the same drugs and prostitution problems, but it is not considered as exclusive as Hermosa or Playa Panama. The driving time to any of these areas is less than 25 minutes making it the closest drop off point to any beach in all of Costa Rica. The area is also teeming with adventure tourism and some of the best fishing and scuba diving in the country.

Playa Hermosa is considered to be the most upscale market in the Gulf of Papagayo. Development in Hermosa is set to explode & across the board property prices have doubled and even tripled within 18 months. Although more expensive than Ocotal or Coco, it is not as expensive compared to places like Tamarindo or Flamingo. Despite properties already enjoying significant increases the prices are still low compared to what it could be or what it is in the surrounding areas. Unlike Tamarindo or Coco, which have a blend of commercial & residential proprieties Hermosa will remain a bedroom community with nearby Coco providing the commercial assets. Hermosa is poised to be the most affluent and influential area on the entire North Pacific Coast where the minimum price for a home will be worth at least 1 million. Hermosa offers nicer beaches but still has the conveniences provided by the proximity to Coco. The wildlife is still in abundance and a home in the hills is sure to treat you to wide variety of monkeys and birds. Truly a paradise!

Playa Panama is just north of Hermosa and arguably has nicer beaches and more wildlife. The access road is in great shape and the property prices are a bit less expensive. It is a slightly longer drive to the city centre but worth it if you value more tranquility. This area may not prove to be as exclusive as Hermosa but given the lower price points it is a location poised to appreciate significantly. Increasingly higher end developers are committed to new projects in this area.

WHY INVEST in the Gulf of Papagayo

The popularity of this area is based on a number of factors not the least of which is its favorable climate. The North Pacific coast receives less rain and thus the off season (rainy season) is shorter. Consequently more hotels are staking their claim here and real estate values are seeing returns unprecedented anywhere else in Costa Rica!  Proximity to the relatively new Liberia airport was what started the real estate boom. Just 20 minutes away from the beach this airport is expanding at a mind boggling rate. Just 2 years ago, there were 3 weekly scheduled flights, now there are over 57. Some flight companies had to cancel flights this year due to hotel room shortages. Looking at the growing numbers of visitors through Liberia Airport is very encouraging; 90,000 in 2003, 194,000 in 2003, 300,000 in 2005 which is expected to be 352,000 for 2006. In addition to over 320 days of sunshine and proximity to an international airport, the Papagayo area has the best beaches in the country. The ocean is typically calmer and consequently the beaches have attracted most of the upscale resorts and residential developments. World class surfing is only a short boat ride away while excellent sailing, scuba diving and fishing are at your doorstep. Also significant is that next to the Central Valley the Papagayo area is known as the largest community of Americans, Canadians and Europeans. As a result there are numerous restaurants, good shopping, and required services through out the area. The Papagayo has some of the best infrastructure including roads, access to municipal water and high speed wireless Internet. Guanacaste is heading in the right direction, with recent government expenditures to improve efficiency of governmental institutions and continued commitment to environmentally friendly sustainable growth. Soon to come will be a few new marinas finally cementing Guanacaste as “The Place To Be”