Real Estate plays undoubtedly a huge role in Costa Rica's economy and its development over the last decades. Real Estate has always been on high demand especially due to foreign buyers along the coast. With favorable ownership rights granting a foreigner the same ownership rights as it grants nationals.
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Real Estate plays a major role in both Costa Rica's development and its overall economy within the last few decades. If you are considering moving to costa Rica and possibly purchasing , simply renting, or building it may be helpful to have a little knowledge of the market before you decide to live in Costa Rica. Being aware of real estate terminology and having a basic understanding of the purchase process and the associated costs will be very useful and may help you avoid real estate scams.
Prime real estate has always been in high demand, often in areas with lush coasts. So, why Invest in Costa Rica? With property ownership rights granting foreigners the same ownership rights granted to nationals, buying real estate here is more favorable than most other Central and South American countries.
Many people find Costa Rica's nature and biodiversity to be very attractive, and is often the main reason inciting them to buy in a certain region. Another reason for buying real estate is to start a business. Costa Rica offers great tax incentives as well as an affordable and highly educated labor force. For others, the territorial tax system is an added motivator (it is recommended to consider legal council for the details in your area).
Similar to the United States, Title Insurance is easy to procure and is remarkably similar to the U.S. with many of the same title companies & title guarantees operating in both countries. However, unlike the U.S. in recent years, the prices in Costa Rica have remained relatively strong. Even though the world economy certainly effects the market, the downstroke has had a less pronounced effect on Costa Rica's real estate climate. This is the case especially when considering the areas such as Florida, California, and Arizona, which saw the huge inflation of prices and then suffered a rapid crash. This stability in Costa Rica may be due to the lack of financing available to foreign investors, thus avoiding the problems associated with over-leveraging. Cash buying has historically been a much more stable form of real estate growth.
Costa Rica have been very fortunate to have this growth in the real estate sector, and it has taken over as one of the main income streams for the entire country, however, the Pacific coastal regions seem to be the most preferred by foreign buyers.
Just as in developed countries, land can be both leased or bought, businesses are bought and sold regularly, and residential sales are almost identical to the United States process, with a few minor variations. Most of the properties are bought and sold via a legal entity often with a mother company based out of the United States. Therefore, the procedures and protocols within the office may feel very familiar to a first time buyer in Costa Rica.
Also with a similar growth to that of the foreign buyer sector mentioned, the central valley (especially San Jose) has benefited from the growth in several areas such as commercial, business and residential developments. Similar to many other countries, shopping malls, business complexes, residential developments and other high density development plans have become popular. Perhaps this phenomenon is due to the high paced growth and more educated consumers from around the world who need these types of developments to accommodate greater populations with incomes.
Key investments in strategic areas have transformed many previously unknown areas into high demand real estate. This boom, as discussed, can be mainly attributed to foreign investors who have the means to create joint ventures between locals and other foreigners, via REITS, though the real estate investment trusts remain a relatively new means of investing in real estate in the country. Costa Rica has indeed remained stable, but pay close attention to the coming years, as you may see the demand skyrocket here once again, creating a positive real estate growth outlook as the global economy strengthens.
Last year, the World Bank praised Costa Rica for its ability to cope with the global crisis forecasting positive growth in 2010, while CNN called it the happiest place to live on Earth. We remain confident that the many facets which life in Costa Rica has to offer will continue to strengthen demand, making Costa Rica an attractive real estate investment for the foreseeable future.