Introduction
Richard Bexon: Good morning, Becky. How are you doing? I’m super.
Rebecca Clower: How are you?
Richard Bexon: Good. I was actually looking back. I think it was like more than 50 podcasts ago that we had you on. It’s been too long.
Rebecca Clower: It’s been a while. We’ve been around for a while.
Richard Bexon: That’s very true. Too long. Well, let’s jump straight into it. I mean, I think, I mean, as we can see here, there’s some volatility in Western markets recently, you know, with all these tariffs and the changes in political winds. And I don’t think that that’s going to change anytime soon. You know, I think we’re going to see a foreseeable future. But I think what a lot of our listeners are looking to get an idea of it, like, how is that impacting Costa Rica? What are you seeing happening here?
International Buyer Sentiment
Rebecca Clower: It’s ironic that you say that, because literally, I had a zoom call with a couple that are from Toronto. And they told me that they had spent a month last month in Florida, thinking of purchasing a condo there for retirement. And now with everything that’s going on, especially between Canada and the US, and like you mentioned, the political volatility that’s going on in the world, but right now, definitely in the US, it’s affecting people’s changing their decisions and their outlooks on what they want to do with their future.
So it’s been really interesting, because literally, yesterday, I had that conversation. And they said, you know, when we decided that Florida wasn’t going to be for us because of what’s going on right now, we didn’t feel comfortable purchasing there. All our friends, there’s so many of our friends that have gone down to Costa Rica, and I didn’t speak to one person that didn’t say they had an amazing time.
And I asked them, have you been to Costa Rica before? And they said, no, but all our friends say we need to go. So I think it’s fantastic. And they’re coming down for a month. They’re going to check out areas based on, you know, what I felt for them made the most sense based on their wish list and what was important to them. And they’re going to check it out and make sure that it’s right for them.
And so, you know, a lot of brokers might tell people, come on down, let’s buy. If you’re if you’re moving to retire, I definitely would say, come down, come down if you can for a month and see, you know, pick your top four places, stay a week at each. Usually you know, within the first 24 to 48 hours that that place calls to you. And then you can decide, okay, this place is for me, because all we can do is give suggestions. I can’t, you know, I’m good, but I don’t have, you know, a crystal ball and I can’t tell people that this is where they belong. So I think that if you’re moving here permanently, definitely float around and check out places and see how you feel about them.
And if you’re buying for an investment and you’re buying based on a spreadsheet, that’s a different conversation. Right. You’re not living here, you’re just renting out.
Guanacaste Market Slowdown
Richard Bexon: But I mean, like comparing, I mean, you know, I mean, just recent, I suppose, post-election U.S. election compared to like, are you seeing that things are starting to slow down a little bit in Costa Rica? We’re starting to see a little bit of price setting in some areas, like because it got pretty crazy after COVID, right?
Rebecca Clower: There has been a tonne of price reductions.
Richard Bexon: Yeah.
Rebecca Clower: We’re still selling, but I think that the sellers finally are getting real with their pricing. Yep. You know, I’ve had to pass up listings because some sellers are just very unrealistic and they’ll come back to me as, I just had a listing where I met with this seller two years ago and I told him back then that his property is way overpriced and then he just came back to me after two years and yeah, I should have went with you from the beginning.
Well, you know, sometimes they don’t want to listen to you. And this is an area that I was very well versed in and I lived in that community, so I knew it better than anybody, but there’s always going to be, unfortunately, sorry, sellers that think their house is worth this much when the data shows us that there’s nothing here. Although we’ll always have the most expensive home on the block, you know, you always have the cheapest and the most expensive.
You’re always going to have one that’s setting the bar for the rest, but it’s hard for us when we’re data people to say, we can get you this because of the current market conditions. And it has absolutely slowed down so much so that on our MLS system, which is so great to have now, by the way, we pulled data and we saw just a tonne of price reductions in the first quarter.
Richard Bexon: Yeah.
Rebecca Clower: A tonne. So, and also off market, people pulling their properties off the market completely, price reductions and days on market has increased significantly as well.
Richard Bexon: Wow. Yeah. I was, you know, somebody told me the other day that I think it was, there are a hundred homes over a million dollars for sale at the moment between Dominica and Ochoa, which is, you know, nuts.
Rebecca Clower: It is nuts.
High-End Market Evolution
Richard Bexon: That’s a lot.
Rebecca Clower: And if I go back 10 years, I think about 10 years ago was when I sold my first million dollar property and selling the first million dollar property was an incredible milestone. And incredibly, it’s something that was really hard to do. And now it’s crazy. It’s almost a norm. Right. Like I think I told you, like the ultra high end buyer is still here. And then we have our sweet spot too. Right. I mean, the things that are going to move no matter what’s going on in the market. And obviously that’s going to be more between 300 and 700. Like that range is fluid to move for sure.
Richard Bexon: Yeah. I mean, it’s just when you look at stuff on paper now, it’s like buy land and build, like getting under a million dollars sometimes it’s very difficult if you want like good piece of land you’re in for like 250, 350 plus, you know, a four bedroom house, you’re probably looking at $800,000 and up, if you know what I mean. And I’m talking a pretty basic house, $800,000. I mean, you’re already over a million just there.
Rebecca Clower: Right.
Exchange Rate Impact
Richard Bexon: You know, it’s just the exchange rate is not helping at all.
Rebecca Clower: The exchange rate’s not helping. Obviously, it’s made things more expensive here, which obviously is not good. I hope that we’ll catch up because I’ve never in all of my life that I’ve been coming to Costa Rica and living here for the last 19 years. Every time that we dip down, it always came back up, but it’s been down and it’s been down for what, like two years now. So that makes everything more expensive because obviously I make, you know, I’m getting paid in US dollars, but I’m still paying my electric in colones, my, you know, my water in colones and the exchange rate. Sure. It’s making everything more expensive down to simple things like food and medical.
Richard Bexon: Yeah. Well, the central bank says it’s not going to change. So it is where it’s at. It’s at $4.98 today. I watch it because again, I have to buy materials constantly.
Rebecca Clower: Yeah. I know. You’re like, what’s going on today?
Richard Bexon: Correct. I was pretty happy though. I bought quite a bit of colones at $5.20 a while back. So that one, that one helped me, but, but yeah. Where have you seen kind of more, I would say, price settling in the market, kind of more reductions in kind of what markets in Guanacaste are, and then which ones are just doing ridiculously well, where it’s like, it doesn’t matter kind of really, you know, it’s in kind of a bit of a league of its own.
Regional Performance Variations
Rebecca Clower: It’s interesting because it’s very area specific and sometimes even development specific.
Richard Bexon: Yeah.
Rebecca Clower: And so, you know, we definitely, for example, we have five offices along the coast. Nosara is just starting to move, which is good. We’re getting some traction. We just had a couple of sales there, which is great. But for example, the Nosara market is slower moving because they have a higher price point. So generally speaking, it takes longer to sell a million, $2 million, $3 million property.
Again, we have properties that are less, but that’s the trend that we see there. The areas south of Tamarindo also are longer to market, such as Playa Negra, Avianas, Junkial, you know, and all the areas in between over there. And then, of course, Tamarindo always has its market and people looking for things there.
Tamarindo Beachfront Condos
What I’ve noticed is that, like, for example, this is an example. I have a condo at the Deria and they rent so well, there was only one in the market and I had the only one in the market. The sellers aren’t motivated because it’s constantly rented. They’re asking $6.50. I had an offer at $6.15 and $6.20 and they just basically countered back, you know, full asking price. And so we’re not really motivated because it’s always rented. So it’s equally difficult to show.
But in Tamarindo, the Deria, the Sunrise condos, just because of their location right up on the beach, right, are always going to be popular. And they’re the top rentals in town because of the location. And then one of my agents, Lorne, were representing a project called Monolux, which is a brand new project, oceanfront on the way towards Langosta. And this is almost sold out. So I can’t say that there’s not buyers out there. I think the buyers are just more refined. They’re more picky. They’re looking for something that they feel that there’s still upside potential, not like they don’t want to be buying and feeling like they’re buying at the top of the market.
Richard Bexon: Yeah.
Rebecca Clower: Because we’re not really there. So they’re looking for more value. And when you start comparing things, and I’ll give you an example of the new condos, Monolux, you know, $700,000, $800,000, but these are oceanfront. They have an incredible beach club and amenities and everything. Well, you can pay the same, let’s say, in the Sunrise condos, which were built 20 years ago that don’t have any amenities. So I think people are just saying like, hey, you know, this is a brand new project. I’m going to get a brand new condo with these fantastic amenities right on the ocean. Now, granted, it’s not right in the centre of town, but not everybody wants to be right in the centre.
Richard Bexon: I think it’s better, to be honest with you, Becky, you’re away from the noise. And, you know, I mean, it’s a great location.
Rebecca Clower: I agree. I agree. You know where it is, right next to the, when it goes to, yeah. And like I say, that’s a project that we’re doing incredibly well. And we’re not even having to do that much marketing. I think, you know, price point for sure. And also price point specific to a particular town, like getting a condo that’s the least expensive and has the most amenities. I think people are just looking for value.
Rental Income Importance
Richard Bexon: I agree. How important is cashflow, you know, for rentability, like the renting cashflow, when people are looking to buy something? Like, does it help meaning that if you’ve got a condo, two condos at 650, but one, you know, generates, I don’t know, I’m just going to pull numbers out a hundred thousand and the other one doesn’t rent at all. Like how much does that help you guys?
Rebecca Clower: I know it absolutely helps, especially in the area. If you’re purchasing strictly for investment, obviously it’s going to be more interesting if the condo is already in an active rental pool and you literally are just switching owners and you’re instantly making money the day after closing. That’s fantastic. Because you don’t have to reinvent the wheel. You don’t have to start from the bottom rung because, you know, as well as I do, I mean, I’ve been in the management business for decades and I have my own rental properties. And when I had to start with my rental properties, it’s always a little painful because you’re like, oh, and then you have to, you know, price a lower than everybody else because you’re trying to build up the reputation, get the five-star reviews and, you know, get the algorithm going and all that good stuff.
So yeah, of course, if it’s already a successful rental with its repeat clients, with its solid income, that’s always going to have the edge next to maybe an identical unit that’s not rented. Generally speaking, though, in Tamarindo, most of the units are short-term rented. And that’s what makes it a little bit difficult sometimes also to show those properties and eventually sell them because it’s hard to get in there, especially right now, since we’re in the middle of high season.
Tourism and Occupancy Trends
We also had a very strange, and I don’t know if you felt this too, we had a very strange February. And it was weird because I was out of town when I flew back to Liberia, it was like the plane was full. But then I asked myself, where are all these people going? Because everybody’s saying- Yeah, it’s weird, right? Yeah. So I’m under the impression that a lot of people are going to all-inclusive resorts and just trying to get the best bang for their buck and not necessarily going the Airbnb route.
And I also look at what my house is doing, my rental property, because I never had 10 days open in February ever, ever. And I had 10 days open in February. So I was scurrying and I started playing with the rates to fill some of the dates and I was able to fill five nights last second. But yeah, it was a little strange in February, but now it seems to be really picking up in March, thankfully.
Richard Bexon: Yeah. I mean, look, we looked at the data for January just from the arrival data and then also kind of vacation rental data. And it was weird because again, the US was kind of flat arrivals, but Canada was down, Europe was down. It was just very weird. But then when we looked at occupancy in certain areas, like Nosada got hit the hardest in January. Tamarindo got hit pretty hard as well. But areas like La Fortuna, Mamon Antonio, La Fortuna is killing it, just continues to do really well. I don’t know that. Monteverde is even starting to really come up.
La Fortuna Market Strength
Rebecca Clower: I love La Fortuna. That’s my favourite area next to the beach. I seriously would love to spend long weekends there all the time. I just like the climate. But that’s a really incredible area. But it’s also not an area that’s known for having super high annual short-term occupancy rates, right?
Richard Bexon: Well, that’s actually, Becky, it’s interesting you say that because when we look at the data, it’s actually better than the beach. We have 70% occupancy rates on properties up there, but there’s nothing luxurious. I mean, like 800 bucks a night there for a four or five-bedroom home is luxurious. So I mean, we’re about to start a build on a five-bedroom high-end home, but it’s $2,500 a night.
Rebecca Clower: Well, I think part of it is that there wasn’t that much inventory like that in a lake. Yeah. I mean, I would always say to Jose, I would love to have an Airbnb situation over there, build a house. That’s next to my bucket list, but I need to finish all my little side projects here. But that’s my favourite area. I think you either come for the rainforest or you come for the beach. Some people come for both. But if you’ve noticed the European market, they like the jungle setting. Some of them never even make it to the beach. And so they’ll do Monteverde, Arenal, Rio Celeste, whatever. They’ll go hopping around those areas. Some just don’t care for the beach, which I kind of understand too. So that’s interesting data for sure. But I think it wasn’t always that way.
Richard Bexon: No. I mean, look, we constantly look at tourism data because we just use tourism data to really dictate where we invest as a business. So we’re just about to start a build and we’re designing six brand new four-bedroom villas up there as well. High-end villas, just because that’s what the data is telling us.
Rebecca Clower: Where exactly at the lake?
Richard Bexon: It’s not actually on the lake. It’s actually close to La Fortuna. So we bought a whole ridgeline. I’m trying to buy the hotel next door as well to buy more land. But we’re basically putting Bali, Costa Rican-style villas up this ridgeline basically in La Fortuna and doing like managed vacation rentals with breakfast.
Rebecca Clower: I love La Fortuna.
Richard Bexon: Oh, yeah.
Rebecca Clower: It still has that like authentic Chico town feeling.
Richard Bexon: And it’s easy to operate because there are like, you know, Guanacaste is difficult to operate because it’s a very relaxed environment. San Carlos area is, it’s farmers. So a hard day’s work. You know, they’re pretty used to if that makes sense.
Rebecca Clower: Yeah, for sure.
Investment Cautions
Richard Bexon: Yeah. So, I mean, are there any things that you would be hesitant to invest in at the moment in Costa Rica or even Guanacaste? You’d be like, I think there’s too much of that or like I do my analysis on that one.
Rebecca Clower: I think right now, I don’t want to say I wouldn’t invest in it. But the thing that’s hardest for us to sell right now is development land and even single family home sites. And I think part of the issue right now is that with the exchange rate, a lot of people are finding that purchasing an already built home, they wouldn’t be able to even replicate that home today with the changes in fluctuations of currency and just the overall price increase for building. So that right now is the hardest thing for me to sell.
Richard Bexon: Yeah. I mean, you do the numbers and you’re like, wait, I can buy something that’s already existing for cheaper than what I can build it. And it’s like a couple of years old.
Rebecca Clower: I recommend the land to someone if you just really can’t find what you’re looking for and you have to have what you want. Sure. But you’re not going to have all this built in equity like you used to have automatically like 10%, 15% or more equity built in. It’s just not that way. Time will help us, I’m sure. But yeah, right now, it’s definitely like you said, you try to time it to buy your materials. I mean, we just don’t know. We need a little genie bottle and a crystal ball and we need to see what’s going on. Or a magic ink ball, something to tell us what the future holds.
Political and Exchange Rate Factors
Richard Bexon: I don’t think anything’s going to change this year. I think it’s going to be round where it is based on my conversations with people in politics and just the voice coming from the government. But it’s an election, presidential candidates are throwing themselves in the ring now because next year we’re going to have a new president. So I know that the exchange rate is currently being manipulated. And I don’t know whether the new president that’s coming in is going to continue with that or not. But yeah, I mean, the IMF said the other day, guys, you can’t keep holding this exchange rate back. They said it to Costa Rica. But this president is Trump-esque and he’s like, I don’t care.
Rebecca Clower: Well, but I think that’s part of what affects our tourism too, is that Costa Rica is not the cheap place it used to be. And let’s be real. I mean, the tourism and the real estate, rentals and real estate always go hand in hand. And when I, both rentals and real estate, I was always monitoring our calendars and seeing how full they work. And almost always that was an indicator of how we were doing in real estate. Are we full? Real estate’s good. Is it down? Real estate’s not so good.
And that was always an indicator. But it’s tough right now because like I said, I think people are looking for the cheaper options, i.e. all inclusive type situations, or they’re simply going to another place. I mean, I think there’s a reason that a lot of Ticos leave Costa Rica to go on vacation because it’s just cheaper for them. Like I was just in Colombia and I love Colombia. I wouldn’t live there. Loved it. Loved the vacation and everything. And it’s cheap. And I never tell people that moving to Costa Rica is the cheapest place because it’s not.
But for me, the people and everything else around it and the environment and the lifestyle is why I continue to live here for almost 20 years. Probably the same reason for you. I don’t know. Or maybe your wife keeps you here. I mean, my husband’s from here, too, but I’m not going to say he’s the reason.
Richard Bexon: Life is great here, Becky. Like, you know, every time I’m like, oh, Costa Rica, I just leave the country. And then a couple of days later, I want to go back.
Rebecca Clower: That’s exactly what I do. And I just did that last month. And it’s nice to get away and see friends and go shopping at the outlet malls and go to Target and then go back.
Costa Rica’s Microclimates
Richard Bexon: But I mean, even here in Costa Rica, I mean, if you want a change of scenery, you drive an hour, two hours, three hours. I mean, climate change, people change like it’s it’s there are multi multiple climates, but also different cultures in this country as well.
Rebecca Clower: It’s my favourite part about this country. We have so many microclimates. And like you said, you can drive an hour and the climate changes. I can drive two hours to get to the lake from the beach. It’s great. And, you know, where else you can’t do that in so many places around the world. And I think that’s pretty awesome.
How Would You Invest $500,000 Inheritance in Costa Rica?
Richard Bexon: Yeah, definitely. Well, my last question for you is I’ve kept you long enough, Becky. I mean, we could talk for hours always. But I mean, if you inherited five hundred thousand dollars and you had to invest it into a business or real estate in Costa Rica today, what would you invest it in and why?
Rebecca Clower: Well, as you probably know, I just finished doing a commercial centre and I can’t speak. OK, thank you. It was my first project, a very interesting one, but we got through it. We learned a lot and I already knew before we started that project that we had a serious lack of commercial space in Guanacaste. I’m speaking specifically to our province, but I feel like it kind of seems it might be the case in a lot of other areas, the Central Valley, et cetera. There’s just not enough, you know, and I don’t say just commercial space, but like nice commercial spaces, you know, well put out, well planned real parking, because, you know, parking’s an issue here, too.
We literally just started to go vertical and we were able to reserve all 12 commercial spaces right after we broke ground. So we had reservation agreements for everything, zero marketing, never marketing. I literally posted it on my personal Facebook and I got a tonne of people that reached out and one of my agents brought me a client and that was that. My light bulb went on and I said, man, if I could replicate what we just did, I would do that 10 times over. But as you probably know, the water situation is a little tricky. So just depending on the area, it took us years to get water, but it’s a fantastic investment.
We’re making about, gosh, I would say about 13, 14% return on investment, which is really hard to make. And, you know, and we don’t really do much because I don’t even manage it. I passed it off to a company because I wanted zero to do with that. I didn’t get out of that business to get back into it. So I’m very hands-off and I also have my office there. So obviously I have my ulterior motives as well, but it’s nice to have something that’s easy because with commercial, you don’t have to deal with what you deal with if you have a long-term tenant in that sense.
And they have to be responsible for a lot of the things like maintaining their ACs and paying for their utilities and things like that. So I think commercial is a great way to go. And also if you can get into any new projects where you can get a brand new product and the price point is good relative to what you’re getting, you know, it could be a thousand square foot condo or three or four thousand square foot home because like what we just talked about, the cost to build, then definitely that’s another way to go as well.
Richard Bexon: Yeah, I agree. It’s amazing that again, you know, not a lot of people talk about commercial in Costa Rica, but I’ve got a lot of friends that like are invested into like real estate funds here that do all commercial stuff, mainly here in the Central Valley. But, you know, my buddy’s dad, that’s all he does is commercial. You know, he does bodegas and office space.
Rebecca Clower: It’s less overhead.
Richard Bexon: It ain’t sexy. Boy, it ain’t sexy.
Rebecca Clower: It’s not, but you make more return on investment than general. I have a diverse portfolio like a lot of people. I have a house. I have a rental house. I have a rental condo. I have the commercial building. I’m getting ready to do the condo project in Pirates Bay. But the reason I like to diversify is because it’s always good to have a little bit of everything I feel in your portfolio. But are you going to go wrong if you just do commercial? Absolutely not. You know, I just like the idea of being able to put some of my family members in a house when they come to visit me and I need somewhere else to put them. But that’s not the reason that I do the residential.
But I really, now that we have the commercial project, I think it’s just a no brainer because the cost to build is a lot less than building a home because you don’t have to deal with all the detailed finish work. And so your cost per square foot or square metre is much lower than building residential.
Richard Bexon: Wow. Well, anyway, I’m going to have to take you out for lunch with dinner one day. We can discuss this because I’d love to learn your lessons learned.
Rebecca Clower: Yes. Oh, I could write a book. I will write a book.
Richard Bexon: Well, Becky, I very much appreciate your time joining us on the podcast, sharing this information and this knowledge. Anyone that wants to get in contact with Becky, all of our contact details will be in the description. But thank you very much for taking the time to chat with us.
Rebecca Clower: Thank you, my dear. Always a pleasure.
Richard Bexon: No worries. Catch you later.
Rebecca Clower: See you later. Ciao. Bye.
