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157 Where would a Costa Rica Real Estate advisor invest 500,000 dollars

157 Where would a Costa Rica Real Estate advisor invest 500,000 dollars
157 Where would a Costa Rica Real Estate advisor invest 500,000 dollars

Podcast Transcription

[Richard Bexon]
Good afternoon, Simon. How are you doing? Hi, Richard.

Good. How are you? Very, very good.

Thanks very much for joining us from the, I mean, I suppose the Uvita area is the Central Pacific?

[Simon Brinkoff]
Yes, Southern Pacific. Yeah.

[Richard Bexon]
Okay. Southern Pacific. I'm always like, does it stop at Manuel Antonio and become the Southern or?

[Simon Brinkoff]
Pretty much. Dominical. Yeah.

Okay. Dominical forward and south.

[Richard Bexon]
Cool. Well, there you go. I learned something new today.

So in the Southern Pacific, but well, the question I always like to ask to begin with Simon is, you know, world economies are somewhat stalled. There's a lot of uncertainty. What have you seen happening here in Costa Rica, but especially as it pertains to the volume of inquiries you're seeing on your end?

[Simon Brinkoff]
Yeah. I mean, this year it's slowed down a little bit. Last year, the market was booming.

It's higher than ever, but sales are so ongoing. Yeah. It's still doing pretty well, I would say this year.

And I don't really know about the markets and other parts of the world, but here it's been pretty good. Yeah.

[Richard Bexon]
I mean, how would you compare it to last year saying like, Hey, look, I was inquiries as a percentage of last year or sales as a percentage of last year. Like, you know, I was doing full sales a month last year. Now I'm doing two.

I mean, just to give the listeners a rough idea there.

[Simon Brinkoff]
Yeah. I mean, if, as far as like percentage goes, I would say probably dropped about 10, 15%. Okay.

Depends on the area a little bit.

[Richard Bexon]
Yeah.

[Simon Brinkoff]
But here in Evita, it's been about a 15% decrease, I would say. Wow.

[Richard Bexon]
Well, I mean, that's very different to what people are seeing up in, you know, Northern Guanacaste area where, you know, I think it was Rebecca Clower, who we had on one of the previous podcasts before this was like, they're down on inquiries, 50% compared to last year. So I think it's a big difference. I don't know why that is maybe because I think that Southern area still has a lot of opportunity and value.

And also a lot of families are looking to move there as well. I've seen.

[Simon Brinkoff]
Yes, correct. The market here is a little more accessible. I think prices in Guanacaste are very high.

I think last year their prices were extremely high. So it could be there's less inquiries. The prices have to kind of even out a little bit.

[Richard Bexon]
Yeah.

[Simon Brinkoff]
So, yeah, it could be part of the reason.

[Richard Bexon]
What product is still selling, Simon? And what type of product has slowed down?

[Simon Brinkoff]
That's a good question. A lot of a lot of it's a lot of turnkey homes, like new homes, somewhere in the four or five hundred thousand range are the ones that are selling the most frequently. Yeah, I would say small townhouses with like three bedroom, a pool, something like that.

Those are going very quickly. Some of the luxury homes are going a little bit slower.

[Richard Bexon]
Okay. When you say luxury, you mean like anything over a million or like 750 and up?

[Simon Brinkoff]
Yeah, 750 and up. Yeah, correct. Anything usually ocean views and yeah, a little more luxury category.

[Richard Bexon]
I mean, and I think we're seeing that a lot. A lot of people are saying that there's like this sweet spot around the 500 to 650 mark. There's a bit of a slowdown between 750 to 1.4, 1.5. But then beyond that, though, it seems to move still pretty quickly. I don't know whether you're seeing that as well.

[Simon Brinkoff]
Yeah. Well, yeah, I would say that below below the one million mark, we're seeing a lot of a lot of movement. I don't have a ton of experience in the luxury market myself.

I haven't sold a lot of very expensive homes.

[Richard Bexon]
Not yet.

[Simon Brinkoff]
Not yet. Correct. But yeah, I would say that the higher the price of the home, the harder to sell, generally speaking.

Yeah. Yeah. From my experience here in this area, it's usually the four or five hundred thousand dollar range that are going very quickly.

And then the closer you get to a million, the more it slows down a little bit. But yeah.

[Richard Bexon]
And that four or five hundred thousand dollar range. I mean, are we talking that's in Uvita downtown? Does it have an ocean view?

Is it in Oaxaca? Is it further up in Playa Hermosa, Dominical? I mean, I mean, what's what's what's typically what typically does that look like?

[Simon Brinkoff]
A lot of a lot of these homes are closer to the beach here in Uvita. Yeah. They're closer to the restaurants, stores, everything.

So very easy access to all the amenities. And they're usually not ocean views or, you know, quiet little neighborhood where it's a safe part of town, close to everything. And a lot of those homes have swimming pools.

It's very hot here. So it's plus. And yeah, I would say they're more like the affordable townhouses, not not necessarily luxury, but they are quite nice or modern homes kind of designed for that for that type of client that's looking for something in that that price range.

Yeah. A lot of people here in this area are building just as an investment to cater to that market that that's kind of booming here in this in the southern zone.

[Richard Bexon]
Yeah. I mean, it's just for a lot of people that are looking to invest or to live. You know, I mean, it's a good price for a for a home.

I mean, it's, you know, years back that would be expensive now, you know, with the price of construction and the price of land, it's kind of pretty typical for like a three bedroom town home with with no view. But, you know, in, you know, I mean, what, probably an eighth of an acre or something like that, maybe even a little bit smaller.

[Simon Brinkoff]
But yeah, exactly.

[Richard Bexon]
When should someone buy land without a legal water source, Simon? You know, because that's always the thing in in in Costa Rica, and especially in that area, that there are some bits of land that don't have legal water sources.

[Simon Brinkoff]
That's a great question. I would say the only time I would buy a farm without legal water is if you know that you can find like have a well, put a well on it, or if it has spring that you could potentially get a concession on. Other than that, I would say never.

We don't recommend it. Most of the farms that we sell properties that we sell, sorry, are always with legal water. It's one of our prerequisites for, especially for exclusives.

[Richard Bexon]
Yeah.

[Simon Brinkoff]
So yeah, it's not the most recommended thing. It just depends on the type of property. Usually, from my experience, if there's many springs on the property, it's a large parcel, then legal water is not such a big issue, because you can work around it.

But yeah, I don't know if that answers the question.

[Richard Bexon]
No, definitely. I just always like to ask that question, just because I've known people that have bought land with no legal water source before and really don't have a solution for it, which is crazy, because you've just basically bought cattle land.

[Simon Brinkoff]
So yeah, I would not recommend buying cattle land that does not have legal water. It could be a big problem, especially when you're trying to build.

[Richard Bexon]
I mean, you can get electricity. That's easy. You can do solar.

But like, well, that being said, I think we had someone on the podcast a while back that was like they were taking water out of the air by solar panels.

[Simon Brinkoff]
Yeah, or you can catch rainwater. There's some little loopholes. Yeah.

Not really recommendable, I would say.

[Richard Bexon]
No, I mean, I tried a while back to kind of go down the rabbit hole on catching water. And the municipal engineer was like, no, I don't allow that. Okay.

Because it's pretty incredible how every municipality is a little bit different, meaning that like in Osa, if you have a concession on water in process, they'll give you a building permit. But in Qepos, they won't like, you know, those kind of things. In an artisanal well, you know, in Dota is different than artisanal well in Santa Teresa, like of what they require for it.

So I mean, I think that that's the thing that drives people crazy sometimes of the rules in different counties of Costa Rica is just different.

[Simon Brinkoff]
Yep. A lot of it depends on who you know, as well. Sometimes you have a close relationship with someone in government like that can help speed up the process a little bit.

[Richard Bexon]
Yeah.

[Simon Brinkoff]
Yeah, I would agree with that.

[Richard Bexon]
I love the smoke on your face when you said that. What listings do you have, Simon, that excite you and why?

[Simon Brinkoff]
Well, I currently just got a listing in Atenas, Alajuela. It's a multimillion dollar home, 5.7 to be exact.

[Richard Bexon]
Wow.

[Simon Brinkoff]
Yeah, so very excited about that one. It's my first luxury listing. It's a little bit out of our area where we operate, but it's a big listing, so I was excited to take it on.

And yeah, other than that, I have some ocean view properties here near the coast, beautiful mountain and ocean view properties within the $400,000 or $500,000 range. So yeah, those are the kind of properties that excite me. I know a lot of times the clients are going to want to build.

If it's a property for building, I can assist in that process as well. Recommend people who I know that work as builders, contractors, things like that, so it helps grow the network. I'm interested in development and, of course, luxury as well.

[Richard Bexon]
Yeah. Tell me about a particular property in the Uvita area that you have that you think is a good buy, that's a good value.

[Simon Brinkoff]
Like the details about the property?

[Richard Bexon]
Yeah, just give us an idea because again, people listening here may not have an idea where it is. They may type Uvita in a map, but just okay, you've got a property that's X amount of money. This is why you like that property and this is why you think there's value in it.

[Simon Brinkoff]
Okay. Right now I have a 20,000 square meter lot, about 10 minutes from the center of Uvita. Legal water and electricity is really close to it.

It's not on the property yet, but it's very accessible. Some of the neighboring lots have requested water and electricity, so within the next year or so it'll be there on the property. That particular listing is 550,000 negotiable.

Ocean View, it's on a public road, so it can be subdivided into smaller lots or commercially eligible for commercial build. Those are the type of lots that to me are very exciting. It's close to town, has ocean view, touches public road, so it just ticks all the boxes as far as if you want to put a hotel or you want to purchase it as an investment and then subdivide it.

It's very versatile type of property. To me, I think that is the ideal investment property.

[Richard Bexon]
I love a subdivision myself. Actually, after this podcast, I have a meeting about a subdivision that we're actually doing in the Southern Pacific. I love it because most of the time it's worth more than the sum of its parts, meaning it's like slicing up a pizza and then selling the pieces of the pizza.

If you put a home on it, it could get very interesting, meaning if you took a 550, split it into four 5,000 square meter lots, that's 1.2 acre lots, sold each one for 200,000, you've got 800,000 there out of it, plus if you put a home on it, it goes even more. It's just very interesting.

[Simon Brinkoff]
It's easy math, easy numbers.

[Richard Bexon]
What are the destinations that you personally would be investing in over the next five years and why? You know the area very well. You've lived there for a long time.

Where would you be putting your money for the next five years?

[Simon Brinkoff]
I'd be focused a little bit more on the South, so starting at Uvita and even going farther South, probably close to Ohochao in that area, basically between Uvita and Ohochao. The reason for that is there's still a lot of land to be developed. The prices are still accessible, especially the farther South you go, the little bit cheaper it gets.

So me personally, I would be investing in this area. You're close to the beach, close to amenities, very central kind of location. You want to go to San Jose, you're only a few hours away.

Me as a surfer, I like to go to the South, Pavonis, Mauna Pala, my hometown where I'm from. So I like the central kind of location and I like the layout of the land here. I think the mountains coming up to the beach is a very unique attribute.

To me, I would say between Uvita or between Dominical and Ohochao is where I would put my money.

[Richard Bexon]
What are the big misconceptions that people have in that area, that Dominical to Ohochao area?

[Simon Brinkoff]
One of the misconceptions, let me think about that.

[Richard Bexon]
Something they're surprised by, something they thought that really wasn't there. I had a client the other day was like, wow, I didn't realize it would be this busy and this cool with bakeries and French cafes. They were expecting a little bit more rustic.

[Simon Brinkoff]
Yeah, that's a great point. I think that people would be surprised at how developed this area is starting to become. Maybe 10 years ago, the South didn't have much to offer.

At this point, Uvita is the fastest growing city in the South. And so it has banks, supermarkets, restaurants, hotels. So there's a lot on offer here.

And I think that for some people who are used to the South being very quiet, they would be surprised to find out that it's actually growing quite quickly and every year there's more and more access to amenities and entertainment, if you will.

[Richard Bexon]
Simon, where do you like in Costa Rica? When you want to get away from everything, where do you go?

[Simon Brinkoff]
That's a great question. I mean, I'm from the South, a small town called Cabo Montepala. It's where I was raised.

It's very off the grid there. There's no water, electricity or supermarkets. That's where I go to kind of forget about everything.

It's also my hometown. So it's very, very easy. I like Pobonas as well.

Very, very quiet down in the South. So I usually go down there or I'll go to the opposite end all the way to the North, like Witches Rock. A very famous destination, but very isolated out there.

And so, yeah, I usually tend to go to either the North or the South. And I also like the area of Chiripo. It's very, such a tranquil kind of vibe, if you will, energy up there.

It's just very different from the rest of the country. And the temperature is nice. So, yeah, that's kind of my three points.

[Richard Bexon]
It's amazing the development happening in Chiripo. Like I hiked it, like probably, when did I hike it? Was it March?

I think early March. And I just couldn't believe like how it had changed in like seven years since last time I did.

[Simon Brinkoff]
Yeah. So that's actually funny that you mentioned that because my godparents, they have a place up there. They played a big role in the development of that area.

They basically single-handedly influenced the whole community by the style of builds that they were doing. And a lot of their friends ended up coming in and buying and building through them. So they played a pretty big role in that development that you've observed, especially in the last seven or eight years, which is when they came in and started building their place.

It basically had a huge effect on the development of that area, I'd say in a positive way. Because the type of build that they do is very beautiful aesthetically. And the town needs a little bit of that development for opportunity for work and for growth.

Because historically, there wasn't much there. It was always very quiet, lots of coffee and farming going on. But now tourism is growing, and more job opportunities through that development.

[Richard Bexon]
I mean, I was on a podcast yesterday of a business associate of mine. And he asked me the question, Rich, if you were president in Costa Rica, and you had one wish, what would you do? And I was like, look, I would create free trade zones for tourism in certain specific areas of Costa Rica that allow tourism to develop.

Because it's amazing what happens to locations when there's tourism. And it's sustainable. Yeah.

[Simon Brinkoff]
I think the new generation is learning how to take advantage of those opportunities. Yeah. For some people, it's a difficult transition.

They think, oh, the prices are being driven up. And they kind of tend to see it as a negative thing. But I think it's all the contrary.

I think it brings so much opportunity for growth. It's a new culture as well that's coming in and teaching different ways. So opportunity to make money, to learn new cultures, and for the locals.

So yeah, I think overall, it's a positive thing.

[Richard Bexon]
I agree.

[Simon Brinkoff]
It's just sometimes a little difficult for people to adjust to that change, especially the older generation. But the newer generation seems to be catching on quite quickly.

[Richard Bexon]
Yeah, definitely. Well, Simon, I've kept you long enough. But my last question for you, 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?

[Simon Brinkoff]
If I had $500,000 to invest, I would buy probably a plot of land somewhere in the $200,000 to $300,000 mark. And I would put a home for another $200,000 or so. And I would flip it.

I would sell it for about $750,000 and repeat the process. Good for you.

[Richard Bexon]
That's a good answer. Where would you buy?

[Simon Brinkoff]
In the Uvita area. Personally, I would choose Uvita.

[Richard Bexon]
Okay. So, I mean, if anybody had $500,000 and wanted to do the $250,000, you have land available for $250,000?

[Simon Brinkoff]
I do. Absolutely.

[Richard Bexon]
Awesome. Awesome. Well, Simon, I really appreciate your time.

It's been great getting you on the podcast. I'll put all of your contact details in the description for anyone that wants to contact you. But I appreciate you taking the time out of what I know is a very busy day, sir.

[Simon Brinkoff]
Thank you so much, Richard. It's been a pleasure.

[Richard Bexon]
Have a good one.

[Simon Brinkoff]
Take care. Ciao.

[Richard Bexon]
Nice work.

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