Costa Rica Real Estate Market Conditions in 2024-2025
Richard: Good morning, James. How you doing?
James: I’m doing great, Richard. Thanks for having me on the show.
Richard: Not at all. An absolute pleasure. When I look through your resume of things you’ve done here in Costa Rica, you have your finger in many pies.
James: I do, I do, it’s true. I stay busy and I enjoy it.
Richard: Yeah, look, I’m in totally the same boat as well. We have our fingers in many pies, you know, from everything from development to investing, real estate, project management. So yeah, car rentals, if you can believe it. But yeah, it’s keeps us busy, but. Well, the first question I’d love to ask James is just kind of get an update of what you’re seeing happening. Regards, you know, to your work and also kind of volume of inquiries just because, you know, western markets recently have had some volatility. You know, we’ve got a US election and like it’s kind of a little, you know, kind of, I would say all over the place. I think it’s know, volatility is probably here to stay for a little bit. But I mean, what are you seeing happening with regards to volume of inquiries on your side and also transactions?
James: Sure. I, you know, I’m based in Tamarindo. I focus mostly from like Catalinas down to say Marbella. That’s the general zone where I work in. I would say, you know, we basically hit a high after Covid 2001, 2002, and we’re definitely off the volume of those numbers. We’re probably back to pre. Pre Covid numbers at this point. You are, I am starting to see some price reductions on properties. I would say middle of 2023 is where I really started feeling things. You know, I hate to call it a slowdown. I think it’s just, you know, return to normal. Return to normal. Yeah. And in the beginning that started about the middle of 2023 and I think at that point lower end properties still. And now I would say the volume of those across the board, things are kind of back to pre. Covid levels at this point.
Richard: Would you, and you know, I, I mean, would you say it’s. It’s at the 2019 level or it’s a little bit higher than pre. Covered. You know, pre.
James: Covered number prices are definitely higher. Yeah, I would say still it is probably a little bit higher. It’s just there’s a ton of building going on here. You know, I, I love Costa Rica. I’m a big believer in Costa Rica, especially this area. I think it’s a very special area. I can get into that briefly if you want to, but it’s people. The foundations are still here. Right. The fundamentals are still here. And people want to come here for the lifestyle and change, whether it’s to have a vacation home here or live here permanently. And so because of that, tamarindo is growing. And when I say tamarindo, I mean the whole, this general Gold coast area. And it’s becoming more acceptable or more livable for more people because we’re getting more infrastructure, we’re getting more schools, roads are being improved. And you know, you have people who were here 20 years ago, 30 years ago, who were more adventurous pioneers that were able to deal with the, the dirt roads. But now you’re having more families that, that say, no, we can go do this for a year, see if we like it and decide if we want to stay.
Infrastructure Development and Government Bureaucracy
Richard: Yeah. You know, I mean, just talking about development there, you know, I mean, people are like, wow, Costa Rica is developing really quickly. And I’m like, I don’t think it’s developing that quickly. Like, if you go to other parts of the world, I mean, you know, it’s, it’s insane in some of those areas. You know, my local, I was just in the, in Europe and like the development there, even in my local town, you know, is pretty crazy. But I think, you know, I was having a conversation with a client yesterday where I was like, look, the God. I mean, the bureaucracy in any government institution or like whether that’s a sad as governments, you know, Sinac Mini, like any of those really does slow down stuff here and make stuff a little bit more difficult for people. But I go, that’s a good thing. Because then I always say it’s a natural filter because this is not a country to make quick money in, if that makes sense. Like.
James: No, I, I totally agree. And, and the, the crazy part, it’s way better than it used to be.
Richard: Correct? Yeah, and. Yeah, exactly.
James: You know, I remember back in 2003, 2004, going into the municipality in the old, the old Muni building before the, before the earthquake, and they had one inspector to grant permits and there was just stacks and stacks of applications sitting there, you know, and they only had one person working there. You know, I said this, that this isn’t going to get done, you know, so, you know, Costa Rica does move Slowly. And it’s. That’s maybe a benefit, not. Not a flaw for the reason it’s still, you know, the natural beauty is still, still here and we still enjoy it. So.
Richard: Yeah, well, the interesting thing there, you said that there was one municipal engineer. Kepos has one municipal engineer. So I’m dealing with that at the moment. So that’s always fun.
James: But, yeah, good to know that person, right?
Richard: Yes. Ricardo’s a good guy, but still, things move very slowly, man. Many people, like, look to Costa Rica as a second home or to move permanently to Costa Rica. I mean, you’d mentioned there about, you know, infrastructure getting, you know, better. But what is your advice to people looking to do this?
Critical Due Diligence for Costa Rica Property Purchases
James: If you’re looking to buy a second home.
Richard: Yeah. Or to like, move permanently here in Costa Rica? I mean, what advice would you give to people, you know, looking to do anything in Costa Rica?
James: Sure. I mean, I want to be specific on some stuff because I, I’ve listened to your podcast and you always give great advice that you need to find good professionals. And I would, I would repeat that as well. You know, from the law side, I would say you need either a good lawyer or a good real estate agent. Right. If you have really good one of those, a kind of average of the other will get you through. Right. But you don’t want to have 2 average of both or worse. Right. Because then, then stuff can fall through the cracks. So how do you do that? You know, I think you need to talk to people that have, have used that agent, you know, and really. And ideally, where something didn’t go right in 98 to 99% of our deals, they’re fine. Everything goes as we hope. Right. It’s when things don’t go right that you find out if you’re, if your professionals are worth their salt, you know, so go out and find those people. If. And just, you know, we have a half hour podcast so we can get deep into the woods on this. But when I do due diligence on a home, a single family home, for example, the two most important things or the things I worry about are a legal water source, okay. And then a top. A topographical study of, of the property. Okay. Because those are, are the two most that someone coming from Europe or someone coming from North America, they just assume you can get water, you know, and, and that’s not always the case, you know, and I has IA is the, the public water company here. And if they have a service area, then most likely you can get water, but you don’t know, until a meter or you actually have a water letter. Okay. And it’s, you know, I feel for it. And, you know, you’ve been here a long time. I’ve been here a long time. And this gets ingrained to us and we just know it. But if you go on a property and you see a well and you see water flow and you’re like, well, it has water, you know, but that, that source may not be legal. Right.
Richard: Which means you don’t get a construction permit if you want to build.
James: Exactly. You know, so these are the type of things that are not intuitive to someone from, from the more developed world. Right. So. And as far as the topographical studies, each property in Costa Rica will have a cadastral map. Okay. That will define the borders of the property. The property system was formed in the registry system in 1977. And before that there was no registry system and you had individual topographers were making maps. Then people notaries started transferring properties and inserting these cadastral maps into the registry. And they always, they didn’t always line up, you know, in fact, I would say 20 years ago, more often not. They didn’t line up. So if, if you’re going to buy a property, even if it’s in the developed neighborhood, have a study done by a surveyor, your own surveyor. Okay. Because oftentimes the seller will say, oh, I have a survey. Here you are, you know, you want to have an independent survey to confirm the survey that the seller has. Make sure there’s no overlays from your map to the neighbors or the neighbors, because yours could be fine. Right. But if your neighbor believes they own half your property, that could become a problem as well.
Richard: Yep.
James: And I’ll just give again. People will, they’ll have. Sometimes realtors will say, you know, why are you doing the survey? You know, it’s fine. Or it’s in this established development, I had a buyer buying a property in one of the larger gated communities here. And we did the survey and it turned out that they had a right of way easement that went right through the house, you know? Yeah. You know, and who, who would have thought? I, I didn’t have that on my, my bingo card, but it came up and it took us four months to resolve it. Right. But as a buyer, you want your seller to resolve that before it becomes your problem. Correct. We left the funds in escrow. We got it resolved. And, you know, he’s in his house now and he’s happy, but when he goes to sell his Property, he has a clean cadast and it’s not going to have any problems selling it.
Richard: Yeah, I mean look, I’m going through with a client at the moment just on that with water where like they’re like, hey, here’s the water letter. And I’m like, dude, that’s not a water. That just says that there’s two bit, there’s tubes outside the front of your property. Like I know it’s got the Asada header and everything on but like it’s not for construction. Like that’s useless. That just says there’s tubes out front, you know, and they’re like, I’m like. And some people would accept that so that you’re aware because they don’t know better.
Condominium Purchases and HOA Considerations
James: That’s exactly right. And that gets back to having a good professional right to really. It’s not just about ticking the boxes. It’s about making sure you have what you need in order to, you know, achieve your goal. If someone’s interested in buying a, a condominium, because as you know, I’m, I’m co owner with my wife in trade, Wind Properties. One of the things I’m really surprised about is no one goes and talks to the property administrator, you know, the HOA here about the, about the condo and we manage over 10 HOAS in the Tamarindo area and you know, everything from entry level properties to multi million dollar properties. And I would say in 15 years of doing this business, we’ve had two or three people come and talk to us. And I can tell you in most cases your HO administrator is more than happy to tell you about any problems that are going on because they don’t want a new owner to come in and be blindsided by this and then have to deal with them at that time. You know, administrators are not there to kill deals, but they are there to tell the truth. So just go to them and ask and say, hey, is the, as a lawyer, I do this whenever I do a due diligence. I’ll ask the administrator as part of the certification, as you know, we receive these certifications that the HOA fees are up to date. Do you have any assessments planned? Right. Is there any litigation, current or pending litigation? You know, and I like to ask if I was just going to buy a property, an open ended question. You know, what problems you have, what, what’s the issues going on? What do you guys talk about in the HOA meetings? You know, a lot of times people will request the HOA minutes. The problem is those are usually written by a lawyer’s assistant. And they don’t include basically all the back and forth that was going on in the meeting. Right. So again, knock on your neighbor’s door if you’re going to buy a condo. Go next door and knock on the door. Meet who’s going to be your neighbor. Make sure that someone who you’re going to, you’re going to jive with and you’re going to enjoy spending either living or spending your vacation time with.
Richard: I think that’s great advice. I think it’s the first time I’ve ever heard that of going to speak to the hoa, you know, directly. And yeah, I mean, again, you know, the HOA there will give you that information. I mean, I’ve done it before in another property where it was actually property in Langosa we were looking at. And I asked them, I was like, hey, what’s your problems that you’ve got here? And they were like, well, you know, we’ve got this and that. And I was like, look, I, I don’t, I’m not taking that liability on because it becomes your liability when you, when you, when you purchase.
James: That’s exactly right. The, the, the, the condo, the finco filial is the debtor, not, not the owner, you know, so you’ll take that on if you, if you purchase it.
Richard: Yeah.
James: And, you know, obviously, as HOA administrators, we won’t give away any personal information of other owners, but if we’re just talking about general, you know, issues with the condominium, we have no problem talking to realtors or to prospective buyers.
Running a Business in Costa Rica: Challenges and Opportunities
Richard: Yeah, I mean, you’ve got, again, as you mentioned there, you keep yourself quite busy here in Costa Rica. How hard is it to run a business here in Costa Rica, James?
James: Oh, it’s a great, great question. I think it’s, let’s say, comparative to, you know, North America or Europe, and you mentioned bureaucracy. There is sometimes stifling bureaucracy here. So that’s more on the development side. But I think there’s less regulation than, say, Europe. You know, I’ve lived in, in Europe and my wife is from Holland and most of her friends are not entrepreneurs. The idea of starting your own business there is a very daunting prospect. You can land in Costa Rica in 24 hours. I can have a corporation set up for you and, you know, we’ll go and apply for your patente at the, at the municipality and you’ll be up and running, you know, so in that sense, there’s low barriers to ent for that. I think as a Developing country and developing. I just don’t mean in the sense of infrastructure, but just people are moving here and building new neighborhoods. You know, there’s, there’s great need for any kind of quality service.
Richard: Yeah.
James: You know, so if you can provide a quality service to anyone and, and be solid in that, I think you’re, you’re going to be successful here as opposed to, say, doing it in Los Angeles where if you open it, there’s maybe a thousand plumbers that are, they’re listed in the Yellow Pages, you know, or on your, your Yelp here. You know, you’re going to stand out and do well.
Richard: I mean, what are some of the, you know, I mean, you’d mentioned the bureaucracy kind of challenges there, but I mean, I think that I agree with the regulation. I mean, it’s so much more easier to open a business here and just kind of just get started. You know, there’s that, I mean, there are. Again, you know, I think if you don’t speak the language, I think it can make it very difficult as well, especially if you’re going to be stuck. You’re like, you’re going to have to rely on your accountant, kind of your lawyer to do probably a lot of the heavy lifting with like, you know, opening bank account down, Social Security if you’re going to have employees, those kind of things.
James: Yeah, I, I totally agree. And, and this is kind of the bias of, of when you’ve been here and you’ve been living so long, it becomes easier. You know, the, the, the, the, the, you know, pain points are we’re aware of them and we know how to avoid them instinctively. You know, So I, I think one aspect is people bringing their, their cultural perspective on business to Costa Rica and especially the Tamarindo area, because here we’re not only just dealing with one new nationality being Costa Ricans, but Tamarindo is a melting pot. You have people from all over the world. You know, in my climbing gym, I have someone from Spain working there, I have someone from Argentina, I have Ticos, you know, so those are all people from very different cultures, very different work economies. You, then you have the labor law. You know, labor law is very different here than it is, say, in, in US or it’s, and I will say this as well, that people from Europe will probably feel more comfortable with the law because Costa Rica is a civil law jurisdiction, and most of Europe is, is civil law as well, whereas the US Is common law.
Richard: Yeah. It’s funny, you know, mentioning that still hurts me, though. I had to let a staff member go the other day and it cost me a small fortune, you know, and I mean in the UK we have to something very similar. It’s just, you know, it’s being a business owner never let to like to let go of someone but like even then having to pay everything out as well as it can be quite painful sometimes. But I mean you’d mentioned there about your climbing gym, Tower Rocks. I mean, you know, I understand how you could get into the legal and even in property management, but Tamarack seems very, very different. James, how did you get into that business?
Entrepreneurial Success Story: From Passion Project to Thriving Business
James: Well, climbing is my passion and I don’t know, maybe eight or nine years ago I built a climbing wall behind our office at the Trade Winds office in Playa Lagosa. And I kind of opened it up to the community, you know. So anyone who wanted to use it if you came, I made them, being a lawyer, I made them sign a waiver and but they were free to use the climbing wall and I was really amazed at how many people came through and how many people became aware of, of it with zero advertising. A person who’s now a friend, Ronnie from South Africa, he got my number, rang me up and he’s like, hey mate, I heard you got a climbing wall, you know, you might come use it. And I’m like, yeah, come on. And he’s a digital nomad that moved, moved back from South Africa and lives here now, now is a member of Tamarack’s. But he just started, started showing up and so this we’re talking about 2016, 2017 and of course being a climber and it being my passion, it’s something I wanted to do. But in those days Tamarindo area was much more seasonal. You know, you had a low, low season and, and much more high seasons. People would make their money in all businesses and high season and then the low seasons you would kind of hang on. There are labor law implications with that. It’s not easy to just let people go and as well as practical implications, you know, people want full time job, you can’t just tell them, hey, go take three months off or four months off and then come back and see me. No, they’re going to look for stable employment. Right. So. So after Covid, we were working on, on the Journey school’s relocation, the Journey Schools here and we were sitting on the site and we were, it was October and I was watching the amount of cars that were driving by and I turned to my wife Susan and I said, I think there’s enough people here now that we could support a climbing jet. And she said, of course you do. But then she thought, but then she thought about it and she’s like, you know what? Maybe, maybe you’re right. I think it would. And I’ve seen you ask this question about, like, what do you think is a good business? So I won’t jump into that yet. But we felt that there was a need for alternative to, say, just surfing and bar life. You know, we wanted to create a community, a place where many of the people that are moving here are in their 30s and 40s with young families, and they’re very excited, they’re very active. And we felt like a climbing gym would provide like a community space for them where they could meet new people. You know, you move your whole family here, you’re new. It’s a place to meet new people in a healthy kind of fun type of activity. So that’s, that was kind of the, the, the seed that. And the vision that we started with.
Business Opportunities in Costa Rica’s Developing Market
Richard: I mean, it’s amazing how many businesses here just come out of people’s passions, which, you know, is great to see. I mean, where do you think the current, you know, the opportunity currently is in Costa Rica? You know, I think more people are starting to move here and look at a potentially moving here. You know, I always say there’s money in the street here in Costa Rica. You know, you just need to pick it up. I mean, there literally is like so much opportunity here if you, you know, and I always say to people, like, look, take six months and like, acclimatize the country before jumping straight into a business, because your perspective is going to change completely. But I mean, where do you think the opportunity currently is, James, for. For business?
James: Do you mean from geographically or do you mean from the type of business?
Richard: Either, or. Either or James. I mean, or both. You know, I mean, it’s. We have people looking on the pot, listening to the podcast that are looking all over Costa Rica.
James: Again. My experience is in the, the Tamarindo area. And what I believe here is you have a unique situation in that you had an incredible wealth injection into this area. You know, you have people, multi. Multi million dollar houses and they have families and they have, they’re willing to pay for quality. Okay. So if you can provide a service that’s not currently provided and give them quality, the people will come and pay for it. Yeah, something that I. When I first came to Tamarindo in 2003, it was more of a backpacker, surfer town. Right. So I think there’s opportunity on the high end in that sense. Again, what I mentioned, any kind of service that’s needed, any kind of trade, if you can do a good job of that, you’re going to be in demand. As an HOA manager, we do lots of repairs. We’re always looking for quality people to do the repairs. And I always feel like there’s a golden period where someone comes in, they’re new, they’re kind of getting their feet wet, their prices are reasonable, then they’re, they’re just fantastic for like three years and then they have so much business, their prices go off the. So you gotta, after that three years, you know, our HOA members, they want us to keep costs down so we start looking for that new person who’s moving into their, their golden period, you know. So I, I kind of reiterate what you say is that I would say that any, anything of, of quality, especially recreation, but also just less, less exciting fields. You know, I would say property management is not an exciting or sexy field, but if you do well at it, you know, people want to do it. That, that might, might be a little bit saturated right now, but any kind of other trade would do well. And I’ll give you two examples from the leisure aspect. The climbing gym we came in, I had no idea how it was going to do. You know, there’s no other climbing gyms or similar facilities in the area. And the reception blew away our expectations. You know, people who never climbed before just saw this massive structure on the horizon and just stopped in. Ticos came in and they’re like, can we come and look around? Like, yeah, come on in. You know. And many of them have now become members and now considered themselves climbers. You know, it’s something new to something exciting. That’s something I love about Tamarindo is that, you know, and people had never seen a climbing gym before and now they are members and they’re climbing in a climbing gym, you know, so that’s fun. Another one, my friend Pete, Italian guy, he opened a padel.
Richard: Yeah. Yep.
James: Okay. I’ve played on it. There you, There you go. You know, and so there’s just two examples where you, you know, you got to decide, are we going to go for the volume? The volume play and do something very affordable that’s perhaps less quality and that can work as well. There is a market for that. But on the other end, I do still think that the high end, you know, top quality facilities are still lacking and there’s, there’s room for that.
Data Limitations and Investment Decision Making in Costa Rica
Richard: Yeah, I Mean, it’s funny that you, you mentioned there because sometimes I get investors that like, hey, I’d like a feasibility study done. And I kind of giggle because it’s like, you know, on a new business in Costa Rica, I’m like, man, there is really not much public data available. Like, I mean, you know, we swim in data on our side, but we’re getting it from private, like locations. But like on a public level to go out there, it’s like, it’s just not even really.
James: I, I had to do a feasibility. So I got a bank loan for my, for the climbing gym and we needed a feasibility study and it was only people from San Jose and I was getting these outrageous quotes for it. And so finally I, I found a guy in Guanacaste that mostly does feasibility studies for agriculture.
Richard: Yep.
James: And he’s like, I’ll do it, but I don’t even know. He had no idea what a climbing gym was. I essentially gave him all the information he needed and he report and we headed to the bank and they ticked their box. But yeah, it wasn’t very useful from, you know, there are no other climbing gyms. So where are you going to get the data from? You know, Central Valley, but not in Guanacaste.
Richard: Yeah. And I mean, even if a business exists, it’s not like that data is public either, if that makes sense. Like, you know, like. Yeah, you know, population sizes, I mean, maybe you could get. But like, you know, it’s not easy to get hold of data here. And I think that’s what people need to understand if, like, you have to trust your gut on quite a bit of stuff here in Costa Rica as well.
James: Yeah, I would. It’s. And it’s scary. But you, you do, at some point you just go, yeah, I’m going to put a stake in the ground and see if it works.
Investment Recommendations for Costa Rica
Richard: Yeah, definitely. Well, my last question for you, James, and I’ve kept you long enough. If you inherited $500,000 and you had to invest it into a business or real estate in Costa Rica, what would you invest it in and why?
James: Oh, I mean, I’m about to build a commercial center. Yep. My gym. That question. It depends. I think it very much depends on the person. Like, if you.
Richard: Oh, you. What would you, what would you do though?
James: Yeah, yeah, I would put it towards my, my commercial center. I think I, I pick my, my location for my gym because it’s between two international schools. It’s within 300 meters of two international schools. We have over 600 parents coming to pick up their kids there every day. So I see a need for. There’s not really a lot of commercial there and most commercials built between say 50 and 70 meters. Okay. So we’re going to build 90 meter units that are a little bit bigger for occupational therapy, you know, professionals, office doctors, dentists, things like that. So if you’re going to pick up your kid from school or if your kids climbing, those type of offices will be available. And we’ve already had people, you know, pre construction that are interested in doing it. So that’s my personal answer of what I would, what I would invest in.
Richard: I think it’s a great idea, James, because again, it’s. Every single one of those parents going into Journey as well is going to need, you know, I mean, otherwise they’re driving, I don’t know, to Tamarindo, to Flamingo, to go to the gym or somewhere else, like drop your kid off at school, then go and you know, use all these services or after school. So. Yeah, very smart, James.
James: Thank you. Yeah, we, we think so. And I think if you’re looking for an opportunity, it should make sense like that. You should be able to tell, tell yourself the story why your plan is going to work. You know, why, why are we going to rent in your commercial center and not the one down the street? Right, yeah.
Richard: 100. Well, James, it’s been an absolute pleasure having you here on the podcast. I’ll put all of your contact details down in the description, but appreciate you taking the time to share your knowledge and experience with us.
James: Well, thank you very much, Richard. It’s been very much my pleasure and I plan to send a lot of my clients to listen to your podcast because you give such great information.
Richard: I appreciate it, sir. Thanks very much.
James: Have a good one.
