top of page

179 Advice for Investing and Developing a Vacation Rental in Costa Rica

179 Advice for Investing and Developing a Vacation Rental in Costa Rica
179 Advice for Investing and Developing a Vacation Rental in Costa Rica

Podcast Transcription

Richard Bexon
Good afternoon, Alex.

How are you doing?

Alex Albert
I'm doing great, Richard. How are you?

Richard Bexon
Very good. I appreciate you coming on the podcast. It's kind of odd that we've been working together for what, nearly two years, maybe even a little bit longer.

Alex Albert
Yeah, it's been quite some time and thank you for having me. I'm excited to be here. Not at all.

Richard Bexon
It's nice to actually have someone that I've worked with for two years to kind of give their perspective, you know, their unfiltered perspective of like what it's like to actually invest here, what it's like to buy here, build here, design, and yeah, just get it straight from the source.

Alex Albert
Yeah, absolutely. It's been a fun journey and yeah, we're getting into the exciting phase now where we're starting to do rentals. So yeah, it's been great.

Richard Bexon
Nice. Well, the first question I'd like to ask everyone, you know, is, you know, the market had a bit of a good comeback there in late 2023, real estate, you know, is still kind of somewhat flatlined or declined in like some areas, you know, of the U.S. I know. But I mean, what do you think is going to happen in the U.S. in 2024 and how do you think that's going to impact Costa Rica?

Alex Albert
Yeah, so it's a great question. I mean, in 2024, you know, I think if we look at real estate in the U.S., not that I'm a real estate expert by any means, but just taking a quick look, I would say, you know, I think the big thing in the U.S. lately has been interest rates, obviously, and very high interest rates. And I think we're going to start to see that settle a little bit, right?

They're still going to stay high. And I think really the key here with real estate in the U.S. is what does that look like? There's industrial real estate that's doing very, very well right now.

There's commercial real estate. I think that's the big question mark, especially after COVID and with regard to, you know, are people coming back to the office? Are they not coming back to the office?

And then if we look at just, you know, residential real estate, you know, I think that that's an interesting one, right? There are definitely some parts of the country that are still doing well. But I think for the most part, obviously, with high interest rates, it's hard for people to get into new homes or get that additional home or real estate property because of the interest rates.

And a lot of people don't really want to sell their homes right now because they have a very low interest rate locked in. So, you know, I think based on that, we're going to see the real estate in the U.S. probably stay relatively flat to where it is right now. I don't think we'll see any major increases.

I don't think there's going to be any major drops either, but I think it'll, you know, stay fairly steady. I think, you know, the prices will remain relatively high. And of course, interest rates, unfortunately or fortunately, depending on how you look at it, are going to stay high as well.

Richard Bexon
Yeah. Yeah. I mean, you know, there's been talk about, you know, a bit of a rate cut towards the end of the year, which, you know, if there's a, you know, with the election, that might well be.

But, you know, I was just chatting with someone where I was like, I don't think it's good that we do a rate cut, guys. I think like we kind of need to stay where we're at for the next couple of years to just really calm this inflation so that we don't drop it and have another spike, if you know what I mean.

Alex Albert
Yeah, I would tend to agree with you. I mean, I don't imagine there's going to be massive rate cuts by any means, maybe slight ones as a kind of a sign of good faith. But overall, I would think that, you know, we should be happy with just not additional increases.

I think just staying flat is probably what we're going to be seeing for the rest of it.

Richard Bexon
So what do you think is going to happen in Costa Rica? I mean, what impact do you think that's going to have on Costa Rica, its real estate market, investing down here?

Alex Albert
Yeah, you know, I think it's going to be interesting. I mean, you know, thinking about Costa Rica, I think one of the things that came forward for me is, you know, a lot more people are looking at where they really want to spend their time, I would say. And that includes work time, right?

I think after COVID and a lot of people staying at home for long periods of time, I think people have gotten more and more interested in working from a place that they want to work from and that the employers are starting to make that more of a reality as well. So I think it's actually an opportunity for Costa Rica. I think obviously Costa Rica is a beautiful place.

I think a lot of people would love to be there either full time or longer periods of time. And I think, you know, in the U.S. right now, cash is going to be king to try to buy any type of real estate since interest rates are high. And if that's the case, you know, why not look at places in Costa Rica?

I think there are some great opportunities in Costa Rica, depending on where you look and what you're looking for. I think, you know, you can get great returns. And of course, one of the big things that I always say is that real estate is a great hedge against inflation, right?

So if people are starting to worry about the stock market or, you know, other vehicles like that, and they don't want too much of their portfolio to be in the stock market or the like, I think real estate's a great opportunity for them. And as I say, why not Costa Rica? I think Costa Rica is an amazing country.

Richard Bexon
So, yeah. I mean, why did you invest here? Because I mean, you're in the investment world, but like, you know, why did I mean, and you did this as an investment, I suppose, right?

Alex Albert
I did. Yeah. I mean, I would say it was a combination of things.

But to go into why Costa Rica? I think, you know, I visited Costa Rica several years ago. I had high hopes for the trip.

It was the first time I was going and I fell in love with the country. And there were a couple of reasons for that. I think there's the obvious reason that people, you know, they see the nature, they see the beauty of the country.

That's the more obvious one. I think the less obvious one or people one that people may not be as familiar with is the people and the Pura Vida lifestyle. And, you know, one of the things I noticed right away was how excited the Costa Rican people were to show off the country.

They were really proud of the country. They were proud of, you know, all of the beauty that it has, the natural beauty. And they just wanted to share that with me.

And I think that was what really caught my eyes. I was like, wow, these people are really proud of their country. They're really proud of what it stands for and and what it can offer.

And they just wanted to share that. And I think that was a huge, huge one for me. Yeah.

Was there anything about the country that nearly stopped you investing here? Not really, no. I mean, I think, you know, besides that, other ones that really kind of stood out for me and particularly what I will say is I did look at some other countries in Central America, Latin America, and I think really one of the things I noticed as well was the relative stability of the government and the economy that was important to.

You know, Costa Rica has pretty good infrastructure and it's something that they're working on on a regular basis to improve. So that is was another reason. And, you know, I think the other big one for me was I was very interested in wherever I was going to invest in becoming a resident.

And so they have very good opportunities and options in Costa Rica. And I went through that residency investment option. And so that was an important one for me, too.

And I'm currently in the process of obtaining my residency there. And then I'd say one other one that I really actually stood out for me, of course, was as I was going through this process, this was during COVID, right? This was during a time where there was a lot of lockdowns and there was a lot of, you know, difficulty in traveling and so on and so forth.

And I think one of the things about Costa Rica that really stood out for me was while they were responsible and they made sure that people were safe, they also realized that complete lockdowns and complete restrictions was probably not the best way to go. And one of the things that I noticed and saw and I think you saw it, too, and noticed it and mentioned it to me was there were many people who were coming from extreme restrictions with COVID to Costa Rica and they ended up never leaving.

Richard Bexon

Alex Albert
They came down. They were intending to be there for a week or two for vacation. And next thing you knew, they were selling their place back in their home country.

They were buying a place in Costa Rica and they were setting up shop there and they never left. So, you know, it was a combination of seeing all of those things that really became attractive for me to to to invest in Costa Rica.

Richard Bexon
Yeah, I mean, look, it's a government here that's kind of a very laissez faire government. They don't get involved in your stuff much. You know, they really don't.

And, you know, we have a lot of freedoms and like title ownership is very strong here. You know, and again, during COVID, we had freedom of movement. They couldn't lock us down.

So we were able to go to places and go to the beach, even though they tried to lock us down on the beaches, you know, it was inconstitutional. So that got removed. You know, at some point they try to put in this QR code, as you know, we fought back on that one and got that one removed.

And even if people like the freedom of choice of being vaccinated or unvaccinated, if you are unvaccinated, you just need to make you had the insurance here that if something was to happen, you know, that you weren't a burden on the people here in the government here. So, I mean, I think that's the beauty of Costa Rica. And you mentioned it is its people and the way this country works.

Yeah, I couldn't couldn't say it better myself. I agree with you on that. I mean, you know, you and I work together, so this is kind of where this is a bit of a weird, weird, you know, podcast just usually I don't have.

Well, I mean, I suppose I do have people I work with a lot on it. But like from a client perspective of just like from start to finish, I mean, where did you look and why did you choose Hacienda Panera in the end?

Alex Albert
Yeah, so I was pretty set on Guanacaste in just kind of the initial research I had done and, you know, there were various reasons for that. You know, I think it kind of fit the lifestyle I was looking for as far as adventure and exploring and being active. But, you know, where where I looked was kind of, I would say, as far north as about Peninsula Papagayo in that area.

And then I kind of came down the coast all the way from there, all the way ultimately to Hacienda Panera, which is just south of Tamarindo. So, you know, there were places like Las Catalinas that I looked at, looked at Playa Hermosa, Playa Flamingo, Playa Conchal, Playa Grande, just to mention a few. And so basically up and down the west coast there in Guanacaste.

And, you know, the thing about Hacienda Panera, I think, and how I chose there was I asked myself the question, do I see myself here long term? You know, I originally am doing this as an investment property, and that's the initial goal for this is to rent this property out and then use it from time to time. But longer term, I would like to spend more time in Costa Rica.

And so for me, it was important to build a place not only that was great as far as rental property and so on and so forth, but it was important for me if, hey, if I'm going to stay here for a three month stretch, do I feel like there's enough activities, enough restaurants, you know, enough outdoor things to do that I would want to stay here and I would feel good about working from here and playing from here for longer periods of time?

So I'd say that was that was a key factor. I would say also, you know, I I grew up in upstate New York. I'm kind of more of a country guy, you would say.

So for me, I wanted to stay a little bit away from the cities, per se, but I wanted the convenience of having a city that has a little bit more hustle and bustle close by. And, you know, I think Tamarindo serves that purpose very, very well, has plenty of restaurants. There's fun things to do there.

You can get the nightlife if you want it. But once you're 15 or 20 minutes out in Hacienda Pinilla, it feels like a totally different world. And it feels like you're pretty much all on your own in kind of an exclusive and quiet environment.

So that's that that was really what kind of swayed me to Hacienda Pinilla.

Richard Bexon
If you were to give a percentage of what percentage was because I'm going to use the word lifestyle and what percentage was investment, what would you say it is?

Alex Albert
Yeah, that's a tough one. I, you know, I'm going to say at least 50 percent of it was heart. It may even be more.

And the reason I say that is. While I want to get a good return and a great ROI and all of that, if I don't believe in the place I'm building, if I don't believe in, you know, where I'm investing, I'm the type of guy who I wear my heart on my sleeve. And we're going to be able to tell immediately if I am really, truly passionate about it and into it or not.

So for me, it was important to pick some place that I was excited about. And I think that's where the heart comes in. Now, obviously, after that, yes, you know, I had to run the numbers and I had to make sure it made financial sense.

I had to make sure that I was going to get a reasonable ROI. But again, if if I talk to people about this and I'm not passionate about it and the location, it's going to become very obvious very quickly. And then it's all about the money.

And that's just really not how I operate my business.

Richard Bexon
Well, I think it's important that like, you know, anyone investing in Costa Rica, there has to be a lot of lifestyle, emotion and heart in it, because it's that's what Costa Rica is about. Absolutely.

Alex Albert
It is the Pura Vida lifestyle for sure. It is a true lifestyle. And the more time I spend in Costa Rica, the better I understand what it really means.

Richard Bexon
Yeah. OK, if you if you could go back and tell yourself one thing, like we were to go back, you know, right to the beginning, you know, and tell yourself one thing, what would you tell yourself and why?

Alex Albert
So this one is simple for me. Why didn't I do this sooner? That honestly is my answer, right?

Yeah. You know, I I worked in corporate America for 21 years before I founded this company. And it was great.

It was good to me, but it wasn't really where my true passion was. And as I started going through this process and I started talking to friends and colleagues about it and whatever, they were all like, man, why didn't you do this sooner? And I'm like, yeah, that's the exact same question I'm asking myself is why didn't I do this sooner?

It's been a dream of mine for a long time. And I've talked about it a lot to people, but I never really started going into that action mode and actually making it a reality. And so once I finally did that and loved the process and went through it, that's really my big question is, man, why didn't I do this sooner?

Richard Bexon
Well, I wasn't expecting that one, to be honest with you. But I mean, from real estate prices, for sure, even though that you got in at a great price, in my opinion, I mean, you know how well, you know, I mean, you know, we went through the whole thing together. And, you know, so I mean, again, you said we went through the whole process there of buying land, designing a home, going out to bidding, building it, you know, and we probably managed to build now renting it.

I mean, what part of the process was easier than you thought and what part of the process was more difficult?

Alex Albert
Yeah, so this this was this is an interesting one for me. And and this was in big part in dealing with you and spending time with you. But I honestly thought it was going to take me way longer to decide where I wanted to invest in Costa Rica or even if I wanted to at all.

And I think I remember correctly, I think I only made two trips down there with you. Correct. And we, you know, we aggressively went up and down the coast and took a look at all these different places.

And that part was really simple for me. And generally speaking, you know, large decisions like this, I generally take much more time. I think it out more, all of that.

But this one, you know, talking about the heart, it just spoke to me very, very quickly. And so I was really surprised at how quickly I decided to move forward and how easy it was for me to make the decision on where I wanted to invest.

Richard Bexon

Alex Albert

Richard Bexon
Yeah. I mean, you know, I mean, we went we looked at a lot of stuff, didn't we? I mean, I remember it coming down to like it was between I think it was a place in Las Catalinas, a place in Las Ventanas or Hacienda Penilla, right?

With the three. I think it was those three, if I remember correctly.

Alex Albert

Richard Bexon
And then I think it went you decided that Las Catalinas really wasn't for you because it was kind of a little bit on top of each other. And then it was between Grande and Hacienda Penilla. And I think you just felt that Hacienda Penilla was kind of a little bit more of what you were looking for.

Alex Albert
Yeah, I think so. And I, you know, both of them have great growth opportunities. But but yeah, when I just looked at the layout and the potential and, you know, some of that, again, the outdoor activities like surfing, for example, things like that, the mountain biking trails, those types of things really spoke to me.

Richard Bexon
So if I remember correctly that we weren't intending on building a house at all, like we know that the house that you made an offer on and they came back with a counter and we were like, well, I don't know. And I was just like, Alex, we can build you one over there if you want to. Exactly the same.

And you were like, you can do that. I was like, yeah, of course I can.

Alex Albert
Yeah, no, exactly. That that was the interesting part, too, is at the beginning of this project, I had absolutely zero intention of actually building and constructing a house. My intention was to purchase an existing house.

And as you mentioned, there was one that we were looking at and we did put a bid on it. And unfortunately, we we we did not win that. But then the one lot that we eventually ended up getting and we looked at that and we said, hey, man, this is a great location, you know, great size lot.

Why not just build exactly what we're looking to do? And, you know, I probably had a little bit of apprehension at first. I've gone through the building process in the States and I was like, oh, man, is this really what I want to do?

But I I am so happy that I did. I mean, the end product is fantastic. You know, it far exceeds what I was wanting to do.

And I think the house is much more me than the house I was looking at to buy. Right. That had been built by someone else.

So, yeah, yeah. You know, no regrets in in deciding to go through the actual construction process.

Richard Bexon
What about I mean, again, you mentioned it was easier, but I mean, thinking about the whole process, was there anything that was a little bit more difficult? I mean, I'm sure the banking stuff is banking is always a nightmare here. And I think people don't understand that.

Alex Albert
Yes. So, I mean, I'd say one of the toughest things, if we look at something very specific, was the banking. I think we made an attempt three different times, if I remember, to try to open a bank account.

And every time, you know, there was more paperwork or there was more things that needed to be done. And that definitely was surprising to me as to how difficult it is if you aren't a resident or a citizen, how difficult it is to open a bank account there. I was really surprised, particularly because years ago, Costa Rica had the reputation of kind of being the Switzerland of Central America.

So there was that. I think the other one that maybe surprised me a little bit, and I think this is, you know, me dealing with in the States was just the logistics, some of the logistics of getting everything together. Right.

So, you know, my experience in real estate in the States, particularly from a construction standpoint, is, you know, you pick your lot, you pick your elevation and then pretty much you have everybody you need at your fingertips. You go to one location or maybe just a couple locations to pick out everything that's going to go into the interior of the house and then you move forward and it's done. And, you know, this, of course, was a little bit different where, you know, there's a specialty shop almost for every single thing that you're going to put into the house.

So you had to spend a lot of time going to these different places, determining what you wanted. You know, as you know, I spent part of my time in San Jose, part of my time in Liberia, part of my time in Hacienda Pena in the surrounding area. So there was a lot of logistics and movement.

And I tell you that without your help and your team's help would have been incredibly difficult to do on my own.

Richard Bexon
Yeah, I mean, I said to my guys the other day, I was just like, how do people do this on their own? Like, how do people not have project managers, interior design? Like, how do they do this?

Alex Albert
Yeah, I mean, when I look back at it, there's just, I mean, when I think about and reflect on everything we went through, all the people we talked to, you know, the inspections we needed to do, getting approval from the COA and Hacienda Pena, all the different things we needed to do. If I had to do that on my own, particularly being in the States and trying to manage that, it would have been nearly impossible. Yeah.

Yeah. I mean, I have a question here. How important is having a good team and why?

But like you just kind of somewhat answered it there, right? Absolutely. I mean, critical.

To me, you know, anybody out there who's listening, who is thinking about doing this, I mean, my recommendation would be you have to have a solid team. You absolutely have. You have to have the right people who know the right people, who know, you know, legally how things work, how the real estate market works, how, you know, working with construction companies works and the various suppliers, etc.

You know, again, it's not exactly the same as doing a project in the States. And I imagine, you know, I haven't built real estate anywhere else in any other countries, but I imagine, you know, you need to have local expertise who really, truly understand how things work in that specific country to ensure your success. And, you know, I think I think we talked about maybe once or twice and I think a couple other people mentioned a couple of like horror stories people had where they didn't decide to use a team and they tried to do it on their own and they ended up paying for it.

Richard Bexon
So, you know, I always say to people, I'm at this because, again, you know, hiring a project management team to do this for you, you know, there's an expense in that. But if I look at the bids that we got back from construction and how we went through it and then value engineered it, probably our fees were not like the savings that we like were made during that construction bidding process far outweigh the fees of project management. Oh, absolutely.

Alex Albert
Yeah. No, without question. Right.

I mean, it was money well spent. We, without a doubt, I feel if if I had not had you and your team, we would have spent way more money. You know, what you all would have been on is is a little bit hard for me to determine because I, you know, I wouldn't have known what I didn't know.

But throughout the process, all the things that were brought forward through the bidding process, as you mentioned, and everything else, absolutely. I mean, long term, it was definitely well worth the investment. Yeah.

Richard Bexon
Yeah, definitely. Well, I mean, if this goes well, which I know it will do, Alex, because, again, you've bought a you know, you've built something that is unique and you've bought something in a unique it's uniquely designed in a unique location, steps from the beach in a thriving community. I mean, where else do you see yourself investing in Costa Rica?

Alex Albert
Yeah, so I've kind of, you know, looked a little bit at some different areas, and I think I can probably break it down into, you know, like two major categories. One would be more beach and that type, and the other would be mountainous and mountain regions. And I think if we look at the beach side of things, you know, NOSARA has always been of interest to me that that that area, for various reasons.

Also, the Manuel Antonio area is another one that I find very, very interesting. And I know you're, I believe, starting a new project in that area as well. That is very interesting.

And then I'd say the third place on the beach side would be the Caribbean side. So that's somewhere I don't know much about. I haven't done a lot of research, but but I have heard some good things.

And that's a place that I would want to do a little bit more research, look a little bit more and see if there would be any place interesting. If I look at the mountainous side, you know, the ones that immediately come to mind are, you know, Arenal and that that region. That was, in fact, where my first vacation was in Costa Rica.

Fantastic area and, you know, totally different kind of ecosystem up there than you get down at the beach. Monteverde is another one that that's a potential possibility that I've kind of looked at real briefly. And then I'd say a third one was Atenas and and that area as possibilities, too.

So, yeah, I kind of, you know, I've kind of thrown a large blanket out there just kind of looking and speculating different places. But I think those are good potential locations that I might be interested in in the future. Awesome.

Richard Bexon
Awesome. Well, my last question for you, Alex, which I love to ask everyone, if you inherited five hundred thousand dollars and had to invest it in business or real estate in Costa Rica, what would you invest it in and why?

Alex Albert
So this is this is an interesting one. I love this question. So, you know, if I'm being honest, most likely I would probably invest in real estate again.

And, you know, that is because that's what I know best in Costa Rica. But there's actually two other industries that kind of fascinate me that I found out about in Costa Rica. One is the agriculture industry.

Obviously, you know, Costa Rica is very well known for coffee. But one of the things that I discovered in my trips and stuff is there's actually a lot more agriculture that that happens within Costa Rica. For example, dairy.

I did not know that Costa Rica provides a tremendous amount of dairy to the rest of Central America. So that or cattle ranching, you know, I do a little bit of that type of stuff here in Texas where I live. And then the other one that I find fascinating that apparently is growing extremely aggressively in Costa Rica is ghost kitchens.

So I had never. Yeah. Ghost.

Are you familiar with ghost kitchens?

Richard Bexon
No, I'm not.

Alex Albert
I'm not.

Richard Bexon
I've never. Yeah.

Alex Albert
So ghost kitchens are basically where you have a kitchen and you create food, but you don't actually have a brick and mortar restaurant. It is exclusively done so that you can do takeout and delivery only. And apparently that is growing tremendously within Costa Rica.

And I just read about that not too long ago. And I really know next to nothing about the food industry. But apparently this is the new the new big thing.

And I found it fascinating. And it's something that, you know, I don't know that I would necessarily invest in, but something that piqued my curiosity. And I would love to learn more about and see if something like that would make sense.

Richard Bexon
It's funny that you say that, because I had a conversation about 30 minutes ago with a guy from Canada who was like, look, Rich, I think I'm going to be providing like takeout food like it's down in the southern zone of Costa Rica. There doesn't seem to be a lot of it. I don't want a restaurant.

I don't have to deal with it. I just want basically like I want to produce the food in a kitchen and then just deliver it everywhere. And I'm like, wow.

Yeah. So, yes, yes.

Alex Albert
So that apparently is is taking Costa Rica by storm. So that would be another one that I would potentially look at.

Richard Bexon
But that was not one that I that I was aware of. Well, Alex, it's been great getting you on here. I appreciate you taking time out of what I know is a very busy day here to kind of just, I suppose, give some information to people looking to invest in Costa Rica about what it's like.

And yeah, I just really appreciate you taking time, sir.

Alex Albert
Yeah, absolutely. Thanks so much for having me, Richard. It's been great working with you and I really appreciate you inviting me on.

Not at all. Have a good one. Cheers.

Let's Get in Touch!

Advice for Investing and Developing a Vacation Rental in Costa Rica

Contact us:

bottom of page