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160 How did Nosara Costa Rica become one of the most expensive Real Estate markets in Costa Rica

160 How did Nosara Costa Rica become one of the most expensive Real Estate markets in Costa Rica
160 How did Nosara Costa Rica become one of the most expensive Real Estate markets in Costa Rica

Podcast Transcription

[Richard Bexon]
Yeah. Good morning, Brandon. How are you doing?

[Brandon Richardson]
I'm good, man. Nice to talk to you.

[Richard Bexon]
Yeah, you too, man.

I really appreciate it. I was actually thinking the other day, I think, I don't think we've had anyone that works in real estate in Nosara on the podcast before. So you're our first after 160 episodes, which I can't believe.

[Brandon Richardson]
Well, you got the right guy.

[Richard Bexon]
Exactly. That's what I said. In the intro, I said we got the number one guy.

I'm sure I offended quite a few people by saying that. Let's get straight into the podcast. Just because, again, it's an area that's of great interest.

It's very well known. And I think over the last 15 to 20 years, it's really developed heavily. But the question that a lot of people are asking at the moment, with inflation rates worldwide creeping up, economies slowing, how is this?

Have you seen this hitting Costa Rica, but more specifically, Nosara and Nosara real estate?

[Brandon Richardson]
Yeah. So, I mean, I'm definitely very Nosara centric. My whole career has been here going back to 2001.

So I know this market very well, the greater Costa Rica market, not so much. But, you know, we had obviously post pandemic was, you know, a wild ride. We had two and a half, three years where the market was just on fire.

And it was a lot of fun. And there was some great transactions. And then last year, we definitely saw a slowdown.

But it was really not too much of a slowdown in interest. It was more we had, I think, with the Fed, you know, adjusting the interest rate and things like that. We had buyers coming down expecting to find or maybe hoping to find really deep discounts.

And our sellers weren't interested in doing that. And so what we had was just kind of a stalemate. Thankfully, in the last month or so, we've really started to see that fall out where it's just gone back to more of a standard market where sellers understand they're going to have to negotiate.

Buyers are making reasonable offers, and we're starting to get deals done again.

[Richard Bexon]
Yeah, I think the whole country kind of is starting to see that. I mean, I think the interesting thing about NNosara is it's probably some of the wealthiest people in Costa Rica and to some extent, potentially the world, you know, have relocated or have property in Costa Rica, and the majority of them are cash buyers. So it doesn't have a huge impact for probably a lot of them, you know, heavily discounting properties to sell it.

You know, they're just willing to sit on it.

[Brandon Richardson]
Correct. Correct. And, you know, our market is always bolstered by the fact that there's just always a lack of product.

There's just not that many properties in NNosara. And so that is just like a backstop for stability in a lot of cases.

[Richard Bexon]
Yeah. No, we've seen that in other markets as well, where, you know, the demand certainly outstrips the supply. And I don't see that changing for NNosara.

Again, I think a bit of a leveling off, but that tide is certainly higher than it was pre-pandemic.

[Brandon Richardson]
Definitely. And, you know, so what we're seeing is normal kind of growth where we've had the post-pandemic rush really brought some communities that were considered on the fringe into the spotlight. And so we've seen some of the outer markets.

There's a community just outside of Playa Garza called Delisius that's gotten very popular. You know, the sales agents love to refer to it as the Brooklyn of NNosara. It's become the more affordable hip area, which I love.

And then even north, as far as Osunol, we're seeing Osunol start to gain traction as well. So, yeah, there's always a demand for that prime time, you know, in the original, you know, Guiones downtown. But definitely people are starting to find and understand the value of being a little further out.

[Richard Bexon]
Yeah. I mean, where do you think there is opportunity still, Brandon, in the market? Where are you personally investing or where would you be investing?

[Brandon Richardson]
So I'm an active investor locally and I mix it up. I think that if you're going to invest in Guiones into the main part of the original community, that the investment almost has to be construction. It's harder to find raw land deals, but you can drive value by designing and building something that's attractive and on brand for the community.

And then I also have properties both north and south. In particular, I really like Osunol. It's a cute little Tico community.

And the trick with Osunol is there's not very many small properties, but that's also part of the attraction for the people who are investing up here is that they're ocean view properties. You can walk to the beach, but they're larger. You know, most of them are at least two acres in size.

So a little more expensive, but great value long term, I think.

[Richard Bexon]
And I mean, when talking about these areas, to just put it in perspective, I mean, how much would you say a square meter is in NNosara, you know, in Guiones compared to say Gaza, compared to Osunol, just so that people have an idea of, you know.

[Brandon Richardson]
So I'm not a huge fan of price per square meter because I find it to be deceiving depending on the size of property, but as a range, Playa Guiones, the main part of the community is probably between 500 and 900 a square meter, where if you move out into Osunol, you're probably looking at 150 to 200 a square meter. Delicias is probably in the 90 to 130 a square meter.

[Richard Bexon]
Okay. Okay. Well, I think that that gives people an idea of just the variation there between NNosara.

I mean, you know, people always ask me, they go, Rich, how did NNosara happen? You know, and I'm always like, well, from what I see and understand is, like, it was already subdivided years and years and years ago, right?

[Brandon Richardson]
Yes. And NNosara has a really kind of fascinating history, especially if you're, you know, a real estate geek like I am. You know, the community was Costa Rica's first expat community.

So in the late 1960s, a group of developers came down, they bought up about 2000 acres of land, and they set about subdividing and creating their original plan was, you know, a golf course retirement community. So a big part of our value and what draws people here and the communities built around this is that the community was master planned. So it wasn't just a fishing village that was kind of developed haphazardly.

And thankfully, somebody smart in the 80s decided that the golf courses were a bad idea. And all of that land was converted over to parkland. So our community has large tracts of parkland that are wound throughout the community, including our beachfront and maritime zone that was donated to the Osuna turtle refuge.

And so we are a conservation community. There are large sections of our main community that will never be developed.

[Richard Bexon]
Yeah. And, you know, a lot of people like to compare NNosara and Santa Teresa. And I'm like, you can't compare them.

They're very different people. And it's a very different vibe. You know, Santa Teresa is more of kind of like a beach surf town.

And probably throw some party in there as well and disorganization. Yes. Whereas NNosara is a little bit more organized.

Not that you'd know sometimes driving down the roads, but like in it with regards to its beachfront, its natural parks, like I think in Santa Teresa, you could start a chainsaw and not much would happen. You do that in NNosara, in two seconds, someone's going to be there.

[Brandon Richardson]
Yeah. You know, one of the things I love about NNosara is it's not everyone gets it. And I think the best brands are like that.

You know, the people who understand NNosara and want it, I would argue nowhere does it better. But there's definitely people that show up and just don't get it. And that's great.

In terms of Santa Teresa, yeah, they've been our, you know, kind of competitive sister community for a long time. And Santa Teresa has some incredible components to their community. Their restaurants are amazing.

The natural environment. If you're a high level surfer, they've got incredible surf breaks down there. But yeah, it's definitely a very different vibe within the community.

I think they're a little more party centric. NNosara is very wellness driven, very family oriented. Not that you can't find wellness in Santa Teresa or that you can't find party in NNosara.

But I think overall, that's how I would kind of separate the two.

[Richard Bexon]
Yeah, I agree as well. I always, you know, I always, for, you know, Playa Grande always reminds me of NNosara years back. I don't know if you've been in, because of the subdivision, because of the subdivision, because of the national park.

I'm always like, you know, could Playa Grande one day be NNosara? I think what Playa Grande potentially is missing is those, the hotels, like the Harmony. And, you know, it doesn't have that yet.

And I don't think it has the water infrastructure in order to be able to develop that. And what's existing there? You know, I spoke to one of the hotel owners there who has a hotel up for sale and he's like, Rich, this place will never make money.

Like, this is like something that people do for conservation and love. Like the property won't, you know. So I think that that's kind of the thing that where I'm with Grande, where I'm like, look, I think the thing holding it back is that that linchpin hotel, because it just doesn't have it.

[Brandon Richardson]
Yeah, I mean, NNosara, again, I've been kind of in it for a long time. And so it's been this fascinating, we've spent a lot of time trying to find out what the secret sauce is, right? And I think it's a little bit of, we got, you know, there was some early planning and some smart people at the helm that set a tone.

We got lucky with, you know, high quality investors, like the owners of the Harmony Hotel that came in early, even though it was extremely painful for me, the 2008 downturn was really healthy for the community. It scared away some investors that were, you know, on track to do some poor projects. And so, yeah, I mean, I think one of the things that I'm not sure people really understand, but as a surfer, you know, the Guayaguillones is an absolute phenomenon in the world.

And the way that I talk about it to my clients, because people are more familiar with like snow skiing, is Guayaguillones is like a green or a blue run every single day of the year. And there's not very many, if any, you know, beaches in the world that you can literally surf every single day on any tide, no matter what. And it doesn't mean that the waves are always gonna be perfect, but you can literally paddle out and catch a wave every day.

And the wave itself is ideal for beginners, intermediate, families learning together. If you wanna teach your kids to surf, you know, I mean, it's just, it really is incredible for that particular surfer. Whereas I love Grande.

I go up there, I can get barreled. The offshore winds are great, but my wife doesn't wanna surf in Grande. And so that to me is also a big factor.

I mean, Nassar really, where Nassar is now is for mostly factors that the original developers could have never predicted, which I think is kind of amazing.

[Richard Bexon]
I think that's the beauty of Costa Rica, of a lot of it's all organic. Like it just happened. There were these elements all put together.

There was no, it was like a good foundation, but there was no 30, 40 year vision that someone was hammering. Like a lot of it organically happened on this just great foundation.

[Brandon Richardson]
Yeah. Yeah. And I think it's also, one of the things I like about the community is even though Nassar has had all this growth and it's grown, it's still very much a community where people need to participate.

There's still things that need to happen to keep the community on a good path. And I really think that that's what makes Nassar special is that people who live here and move here take that seriously. People are contributing and engaging and that's a big part of life here.

[Richard Bexon]
Yeah, I agree. I mean, and I think that that's what makes beach towns really succeed is having a really strong community.

[Brandon Richardson]
It's not always easy.

[Richard Bexon]
Especially where the rest of the world, like community is being, and COVID didn't help kind of is eroding away slowly. Whereas in Costa Rica, I mean, community is a big part of the culture here.

[Brandon Richardson]
Absolutely. I mean, that's a big factor for us that I've seen over the years, which is, I mean, regardless of where you are politically, people are uncomfortable in North America. I mean, because we also have a huge Canadian contingent that has bought and continues to invest in Nassar.

And a lot of it has to do with just feeling uncomfortable. COVID politically, there's all these different things that have people, I want to say nervous, but just seeking. They're looking for something that, hey, I think there's maybe a better way to do this.

And whether that's full-time or part-time, the lifestyle is here for sure.

[Richard Bexon]
Yeah, I agree. I agree. Well, let me just change gears a little bit because I always like to bring in the vacation rental element of things.

And especially in Nassar as well. I mean, if you were to create, if there is such thing as a perfect vacation rental in Nassar, what attributes would it have and why? And then I'll ask you the second question after that, which is like expectations on returns, but what would it look like?

[Brandon Richardson]
So definitely our best vacation rentals are three to four bedroom homes, newer construction and architecture design. We've seen a strong push in the tropical modern direction for architecture, renters love it. My theory on that is that that type of architecture in the U.S. is a lot of times out of reach financially for most people. And so to be able to see a really cool tropical modern home and rent it and experience it for a week, I think is a big driver for people. That's not to say it's the only architectural style, but that's definitely the trend right now. Walking distance to amenities and the beach trumps everything.

People on vacation love to not have to get into a car. And so that's definitely our dream rental scenario. In terms of returns, I think it's not too difficult to hit that five to 10% return.

But as you mentioned earlier, our clientele is a little bit different in Nassar. We, three years ago, joined forces with Sotheby's. And so our clientele, I'm dealing more and more with clients who really are only interested in renting a few times a year to help cover their costs, or in a lot of cases, not at all.

There are people who are definitely running that Airbnb business and churning clients through and the cash flow can be really, really good. But definitely we're seeing a shift in the community where I think more and more people are moving away from that too.

[Richard Bexon]
Yeah. If you were to do something out of the ordinary, if it was to be a vacation rental in, let's just say in Costa Rica, rather than just Nassar, just something that's not there or something that you've ever thought of, does anything come to mind? In terms of what I think would be an interesting thing?

Yeah. I mean, for me, I've always thought about tree houses. Nobody really does luxury tree houses in Costa Rica.

We have luxury tents with Nyada Resorts, but where's the funky, cool, Robinson Crusoe style tree houses?

[Brandon Richardson]
Yeah. To me, it's waterfalls. I think there's something so magic about waterfalls.

We have a spot that we love to go to in the mountains called Carolina Lodge. The cabins are very, very rustic, but we have a cabin we love and it's right on this river. You can walk down a path, jump in, there's waterfalls to play in.

There's something just really magic about that. And being Costa Rica, we go to waterfalls in the US and the East Coast and the water's freezing in North Carolina or something like that. And so here it's comfortable and I think they're really special.

So I would say people targeting that for vacation rentals is a really interesting angle that I've never seen.

[Richard Bexon]
Yeah. I was on a property in Manuel Antonio a few months back and I think it had like 15 waterfalls and the client was talking about doing lodges with its own private waterfall and swimming hole. That's right.

[Brandon Richardson]
That's cool. Yeah. Yeah.

Part of my love for real estate is that creative component and Costa Rica is so good for that. I mean, compared to most places in the States, the zoning and constraints that we have here are so much less than what most, especially Americans are used to dealing with. And so to be able to come down and invest and create something, both incredible local materials, you know, sustainably farmed hardwoods, all of that to me, if anyone is in that kind of creative space, like that's, you know, it can be super fun.

That's the best part of investing here is not only can there be great returns but also it can be super fun.

[Richard Bexon]
Yeah, I agree. I mean, I usually say I don't do anything unless it's fun. And I let like anyone that I work with know that I'm like guys, but I like it's part of our philosophy here is to have fun.

So if you're not gonna have fun, don't come.

[Brandon Richardson]
Well, and it's so important because that's a through line. You know, if you have fun creating it, the chances of you connecting with an audience or a market that wanna rent it, they're gonna feel that or see it or get to experience it. So yeah, I agree.

[Richard Bexon]
I mean, you've probably seen quite a few people make some mistakes over your 20 plus years here in Costa Rica. I mean, buying property in Costa Rica, what are the common mistakes that you see people make and how can they be avoided? Or what advice would you give them?

[Brandon Richardson]
So, you know, I think one of the things is not working with the right professionals. You know, I do think that there is a lot of value in working with a realtor or somebody to help guide you that not only knows the local market in terms of being able to show you around but can speak intelligently to the legal process and the risks and the liability and this type of stuff. I think that is the surest way to kind of get right footed from the beginning.

Outside of that, you know, I think people tend to come down and fall in love and they get excited. And we see this a lot where, you know, they come down and they've got an $800,000 budget. All of a sudden, well, if I did this and I got fat and I talked to my cousin, we could spend maybe, you know, a million or a million too.

And I always encourage people like, stay within your budget, keep it fun to our earlier point. You know, if you reach to make it happen and now it's stressful because it's not comfortable financially, you know, that sucks the fun out of it. And then it's a job versus, you know, great investment.

So those two things, I think, yeah, working with vetted professionals and staying within a budget are two things that I think would be great, you know, to keep you on track.

[Richard Bexon]
That's great advice. What listing do you currently have, Brandon? I always like to ask people this.

What listing do you have that, you know, interests you and that you still believe delivers value?

[Brandon Richardson]
Yeah, you know, we, it's funny, it's a good question. I, for me as an investor, I always have my eye on at least, you know, three or four things that are interesting. But right now we've got, let's see, in Delisius, the community I mentioned earlier, there's a 50 acre farm that has a waterfall and a swimming pool that is, it's raw land, has no utilities on it, but it's very much right on the edge of where everything is going.

There's some developments coming up around it. That's on the market for about $10 a meter. It's a bigger chunk.

So, you know, but I think that's a great value for somebody that either wants to do, you know, a ranch where they have a home and 50 acres for their kids to run around and just have a ton of privacy. It could be four families that want to join up and take it down together. Or it could be a developer that wants to create a project and it ticks all those boxes.

So that's one more on the edge. And then more in town, we have a client who's worked with us over the years and he has a handful of lots in K section. And he's my favorite type of seller and that he's knowledgeable.

And, you know, he's not, he understands the market and actually wants to sell. And so I think those lots are fantastic as well.

[Richard Bexon]
Will Awesome. Awesome. Well, if anybody's interested in the NEM, I'm going to be putting all of Brandon's contact details in the description anyway, so you can reach out to him.

But my last question that I'd love to ask everyone, Brandon, if you inherited $500,000 and had to invest a business or real estate in Costa Rica, what would you invest it in and why?

[Brandon Richardson]
Brandon You know what? I love raw land. Will With you.

Brandon Low carrying costs, no operations. You know, I joke often that my two main investment strategies are buying yellow houses and painting them white and I buy overgrown properties and I clean them. And it's amazing how much value you can add just by making something, you know, look a little better.

[Richard Bexon]
Will Yeah, I agree. I agree. Well, Brandon, this has been amazing.

I really appreciate you taking time out of what I know is a very busy day with us here. Again, as I mentioned, I'll put all of your contact details in the description, but really appreciate you coming on the podcast.

[Brandon Richardson]
Brandon Yep. I enjoyed it. I enjoyed it.

Thank you very much.

[Richard Bexon]
Will Awesome. Have a great day.

[Brandon Richardson]
Brandon All right. You too.

Let's Get in Touch!

How did Nosara, Costa Rica, become one of the most expensive places to own Real Estate in Costa Rica? We chatted with Brandon Richardson of Sotheby's International Realty - Wanderlust Group about Nosara's history and where the value in surrounding areas remains. Plus, Brandon gives us his advice on investing anywhere in Costa Rica.

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