207 Jaco market update

[Richard Bexon]

Good afternoon, Travis. How are you doing?

[Travis Comstock]

Doing good. How are you, Richard? Thanks for having me on.

[Richard Bexon]

Not at all. I know that you've been a longtime listener of the podcast, so it's always good to get people that have supported the podcast since we've started on.

[Travis Comstock]

I've been listening for years, and as you're probably well aware, I definitely used up my 15 minutes of free consultation, so I appreciate it. Not at all, not at all, any time. Well, I mean, you've been down here in Costa Rica now, how long?

Since October of last year, so going on nine months now.

[Richard Bexon]

Awesome, awesome. Well, I always think it's great to get a viewpoint of someone that's kind of a recent transplant, as they say, and not ask people that have been jarred by 20 years of being here in Costa Rica. But I mean, look, I think stock markets have had a pretty good start to 2024.

It's not been amazing compared to previous years, but I think worldwide real estate is kind of slowing down with the interest rates. I mean, what are you seeing happening here in Costa Rican real estate, Travis?

[Travis Comstock]

I mean, I think I've heard you say it several times. It's going to be interesting to see what 2024 brings at the end of the year to kind of gauge where we're at since COVID happened, since we're out of COVID. Like what I'm seeing and what I'm asking around with the other agents I work with, it seems to be going good.

It's not gangbusters like it was COVID. But as you know, COVID was absolutely- Crazy. Crazy here.

I mean, it was offers coming in, sight unseen, over-asking price. You're not seeing that anymore. I think what you're seeing is still people buying, people selling, but I think you're seeing more realistic asking of prices.

I think you're getting more realistic offers. I think things are sitting on the a little bit longer, but I do think things are moving. So it'll be interesting to see where we end the year and kind of what we can forecast at the end of this year moving forward.

[Richard Bexon]

Yeah, I agree. I agree. I mean, I think there are some markets that are still doing very well.

I mean, land in Playa Grande, we've just recently made an offer for a club, actually two offers for two different clients on land there. And it's just, there's just not much available, but I know there are other markets where I think that there is more of price settling, should I say, especially like areas like Manuel Antonio. And I think the areas that have not the main core areas.

So like for you guys could be somewhere like Playa Hermosa, Bohuco or somewhere like that.

[Travis Comstock]

Exactly. That's exactly it. I think we're starting to see a lot of movement, which I know we'll talk about in Hakko and where's that spill out going.

I think it's the surrounding areas of Hakko, just like you mentioned. Yeah. Yeah.

So I mean, I think with the... Go ahead. No, no, keep going, Travis.

No. And it's interesting because like when we look at the worldwide events and what's happening post COVID, I was lucky enough or maybe smart enough to buy a lake house in the States 2016. Thank God I did.

I'd never be able to afford it now after COVID. But even what I'm seeing there is kind of what we're seeing similar to here. You're starting to see houses sit a little bit longer.

They're still selling, but it's not this asking price that's way inflated. It's not multiple offers coming in. So it just reminds me of that.

I think with the lake house here, with beachfront property here, it's a matter of time. You're going to get that long-term appreciation if it's bought in the right place and you're sitting on it for a long enough period of time.

[Richard Bexon]

Yeah. Yeah. So I mean, again, you mentioned that you've been in Costa Rica nine months now.

I mean, what has been a pleasant surprise for you and also what has been a bit of a shock?

[Travis Comstock]

Let's start with the shock. And what's funny is I've had, with your help being a resource, with other podcasts, I feel like I've had so much time to say, okay, this is what it's going to be like when we move to Costa Rica. This is what we've got to prepare for.

This is how I'm going to respond when I'm at the bank for six hours. But until you're actually here living in it, it's hard to know how you're going to feel, how you're going to respond. But I'll give an example.

So when I got here, I work with a lady. She's kind of the actor in Shawshank Redemption Red. She's kind of the person that gets things done.

So I took her to the bank with me mainly so she could translate for me, have all my documentation, all my paperwork. We went early in the morning. We were there about four hours.

At the end of the four hours, congratulations, Mr. Comstock, you are now part of our banking system. We need you to come back next week. We're going to give you your ATM card.

One will be for clone. So the other will be for USD. We'll show you how to log into your account.

It's very neat. So awesome. Great.

Well, I'll see you guys next week. So I go back and like, hey, you know, I'll wait in line again. I'm here to pick up my cards.

Oh, well, shoot. Those are actually in San Jose. They didn't get delivered here.

No problem. What do you guys want me to do? Come back next week.

We'll have them next week. So same thing. I go back the next week.

They're not in San Jose, but they're not here. Sorry. Oh, man.

Richard, can you hear me? Yeah, I can hear you. Hang on.

I lost you here. No worries. I can hear you perfectly, man.

There we are. I'm sorry about that. I had a call come through.

It wasn't muted. So anyways, after the third time going back and they're not they're not in San Jose, they're not in HACO. I go back to the States because I do exhibits at medical conferences, kind of like what I used to do.

And I get an email from them. Travis, guess what? We found your cards.

Everything is good. I emailed him back. Thank you so much.

That's great. I appreciate the effort. I'm actually away out of the country until next week, but I'm going to come in at Wednesday at nine o'clock.

Perfect. Show them this email. The guards, you won't have to wait in line.

So, OK, great. So I get back. It's Tuesday afternoon.

I send them an email. Hey, just confirming tomorrow that I'm coming in at nine or whatever, ten to pick up the cards. Oh, actually, we have a problem.

We destroyed your cards about three days ago because they were here for too long. So I am still dealing with it right now. But that's one of those unpleasant surprises.

And I've heard you talk about a lot. It's a lot of bureaucracy. It's a lot of not knowing how to get things done or just the time that it takes to get something done can be a lot longer than, you know, what we're used to or what I'm used to in the States.

And we'll just be the other example. The other funny one is we have an ATV that we that we got. We love it.

It's one of the side by side buggies and it's got the decal on the front. It's a front license plate, but it's just a sticker. Well, after years and years and years of humidity, sand, rust, you can barely see it.

So I had to take it for an inspection. So I had a local mechanic come over because he was going to drive it to Punta Rentis to take it through Decra to get it inspected. And he sees that and he's like, this isn't going to fly.

Like you can't go in with this plate. You can't even read the number. So it's like, all right, well, what do we do?

It's going to take time. Like this is a process. It's going to take you so much time to get this, that, you know, you can't pass unless you get this plate and it could be two to three months and you don't want to be caught driving this without the correct inspection sticker.

I'm like, oh, what do we do? You know, this kind of sucks. Just got the thing.

We want to use it. And it was like, well, I know a girl in San Jose for 350 bucks. She can go talk to this person, talk to this person that can be here in two days.

So I didn't want to go that route, but we went that route and sure enough, we got it pretty quick. So I would say to answer your question, the bureaucracy, the slowness of everything, you know, the laid-back lifestyle, which is great to some degree, but when you're impatient and you're coming here and you're not really used to it yet, it can be a little deterring.

[Richard Bexon]

That's where I think that, again, it becomes about your network here in Costa Rica, you know, about getting stuff done.

[Travis Comstock]

So yeah, a hundred percent. It's, I exaggerate when I say this, but now I'll call like an accountant that I know. It's like, dude, I'm going to the ATM.

Can you come with me? And he's like, I don't think you need me to come with you, but, but no, I've learned grow your team, grow your Rolodex, find out who you work well with and, you know, leverage each other to get things done. Absolutely.

[Richard Bexon]

Definitely. Well, Travis, I mean, if you don't want me to ask him, why did you choose like real estate consulting in Jaco of all places in Costa Rica?

[Travis Comstock]

Yeah. So Jaco, we kind of found, you know, by mistake, if you will, kind of traveling from North to South, decided to stop in this little beach town, a party town, it kind of gets a bad rap. As you know, I am here to defend it a little bit and say, it's not for everyone.

It depends what you're looking for and where you're coming from. Coming from Chicago for us, the stuff that we see on the streets here that aren't normal to people, it's not a big deal to us. We're kind of used to, you know, seeing a little bit of everything.

So Jaco to us, it's a phenomenal place. There is just so much to do outside of Jaco, of Jaco is not your jam. We kind of use it as a city.

I know it's a beach town, very condensed beach town, but for us, it's kind of a city. It's a main hub, but it's so easy to get out of it. It's easy to go up into the mountains, easy to go to Estrella where there's no one on the beach.

It's easy. You know, it's so close to everything, including San Jose, which you will absolutely have to go to San Jose to get things. And it's an hour and a half from the airport.

So it's in a great spot. We kind of use it as an anchor as well. Like within a day, we can go Arnal, we can go Guanacaste, we can go south to Evita, you know, maybe just spend the night and come back the next day.

So it's much easier to do that living in the central coast than it would be, you know, Guanacaste trying to come south and vice versa. Also kind of what attracted us to Jaco and selling here would be the fact that you can get title beachfront property sitting right on the ocean. As you know, most of Costa Rica, that's not the case.

It's a concession sale, basically, at least from the government. So here in Jaco, there is the exemption from concession sale. And I think that really helps with a lot of people who don't want to hear about concession sale, or they just don't quite understand it, or they don't quite trust.

What do you mean I have to form a corporation where I'm 49% owner? So that is one of the advantages, I think, to Jaco. And I think that's one of the reasons why it's not going to stop anytime soon.

So that's primarily why we chose Jaco and, you know, both personally and for business purposes.

[Richard Bexon]

Cool. You know, when foreigners look to invest in Costa Rica, as quite a lot of them do, you know, what are some of the surprises that you think that they should be aware of?

[Travis Comstock]

I would say a good surprise that I get a lot of feedback on, hey, Travis, this wasn't much different from a purchase I just made in the United States. It was very simple. Like I was amazed.

A lot of people are amazed with how you have the same property ownership rights if you're a foreigner as if you're a national. So I think those are good surprises to people. Some of the bad, I would say surprises is the lack of, I guess, I guess financing, or as you know, you can get financing, it's just harder, you know, you're going to pay more, it's a longer process, it's not a fun process.

There are ways to get lending outside of Costa Rica Bank. So you know, I know some of those people I can connect some of my clients to, but predominantly it's a cash market. So then you've got to kind of help people come up with ways to find the cash.

If you don't have it, maybe there's a rental property in the States that you can sell to liquidate. And I see a lot of people doing that. The obvious answer would be a home equity line of credit from a property that someone owns in the States, they bring that down, they can use that money to make their purchase here in Costa Rica.

Another surprise, I think, and it's a big one is the property tax here. You know, in Chicago, I think we're paying close to $11,000, $12,000 for a two bedroom, two bath condo. Here it's 0.25% of the appraised value. So normally $400,000 is a year. So I think people can't wrap their mind around that. And I think that's one of the advantages to investing in Costa Rica is the low, ultimately the low holding costs with such a low tax structure.

[Richard Bexon]

Yeah. I think one of the things that comes to me is just closing costs, you know, where people are like between four to 5%, they're not used to that, like, you know, lawyers fees being a percentage of, you know, the taxes, I think they understand and the transfer tax, but typically I don't think they're used to paying such high closing costs.

[Travis Comstock]

I think you're right. I think there's a trade-off there. It's a little bit higher closing costs with certainly less taxes.

Absolutely. And here, you know, as you know, it's very attorney driven. You need the attorney to do everything, to do the due diligence in the States.

It's not so much like that in some States, like Illinois, for example, very, very similar, but yeah, there are a lot of, when you look at a closing statement here, there's a lot of line itemized charges. Like what's, what's that stamp stamp fee. Come on.

[Richard Bexon]

Yep. Exactly. I mean, look, I've spoken in HACO before, because we've had David Carr from Coldwell Bankers, you know, on here, there's a lot of new apartments coming online in HACO, you know, I mean, maybe even a doubling of inventory over the next three to four years, you know that, I mean, what's that gonna, what impact is that going to have on an investment as a vacation rental, because I don't know whether there's demand for double the amount of, you know, inventory coming online.

[Travis Comstock]

You know, and that's kind of a, obviously it's a talking point right now. And we just had a monthly newsletter that I put out that kind of addressed this issue. And I think it is scaring some people saying, well, where's the demand going to come from, you know, looking at tourists, are there going to be more and more and more people every year coming?

So I think what we're seeing in HACO is already the buildings that are off of the beach where developers can get them a lot cheaper and build, but now we're starting to hear of project one, project two, project three happening on the beach. So a lot of people that come down here are saying, okay, I want a, as you say, a lifestyle investment where I can use it myself. I don't want to lose money, but I want to make enough to, you know, cover my net.

So basically I think people are a little bit nervous with the occupancy rate, you know, is that going to go down? So in the newsletter, we addressed that basically, if you have an Airbnb property, you're just going to have to tighten it up a little bit. If that means better pictures, maybe a unique offering you can give guests, maybe a concierge service that comes with it, better photos, I mean, better competitive pricing.

The one thing I'm starting to see quite a bit is the shift though, from a short-term rental market to a long-term rental market. And it kind of makes sense with what I'm seeing too, like, you know, with the 180-day extension on the travel visa, more people can come down here for a longer period of time. A lot of the clients I work with right now are at the point of their lives where they're either remote workers, digital nomads, or they're near retirement and they want to figure out a way to do six months here, six months there.

So with that being said, I know I'm on a thread of tons of realtors that are always looking for a longer term unit. So I think some of the short term people are shifting to the long-term and finding it's less of a headache and maybe at the end of the day, the same amount of money. And also I think the last thing I'll add is just the opportunity that comes with it.

So what we have is a lot of condos here that are built 2004, 2005, 2006, and guess what? Those are so outdated now. So I think there is opportunity for renovation, construction.

So on some of the recent deals I've had, it's like the property got low enough because it wasn't getting enough looks. So someone got it, what they thought was a cheap amount, they put a little bit into it and voila, there's equity there. So I do think there is an opportunity to renovate some of the older things that haven't been touched.

[Richard Bexon]

I love a good renovation, man. If you get it at the right price, it can work very well. I mean, I think that what's going to happen here is the demand in high season is so high anyway.

So there's always going to be demand. I think what we're going to start to see is the high season still going to be high, but then in those more competitive periods, you might see a run on lower rates. I think you're just going to see this higher highs and lower lows.

But I still think there's a number on the line.

[Travis Comstock]

I do too. And honestly, I think it depends on who's buying and what they want to use it for. A lot of the conversations I'm having are, like I said, people are willing to find something that they want, whether it's modern, whether it's deco style.

And once they find what they want, it's for them. And then what they get from renting it, it's just, it's great. But they're looking for their own personal place to be in Costa Rica and then renting it as secondary.

[Richard Bexon]

Well, I mean, the interesting thing about HACO is it has a strong local market as well, which a lot of locations don't have. I mean, I've been in this industry for 20 years and just seeing the amount of Costa Ricans that go to HACO because it's the closest kind of like decent beach town from San Jose.

[Travis Comstock]

It is. On a Saturday morning, it is crazy. And it's great to see.

I mean, and that's a good thing to know, depending on what your model is for renting, is you have a central valley there with over a million people that do come to HACO on the weekends. Absolutely. And I think it gives it a cool local flair.

Of course, there's a lot of expats here. I think that's becoming everywhere in Costa Rica, but definitely we feel like in HACO, you get much more of a kind of a local, local flair, if you will.

[Richard Bexon]

Definitely. Definitely. I mean, I always like to, you know, kind of get people's opinion on kind of the next beach town to develop.

I mean, HACO is a city. I mean, it's classified as a city, hence why it has all the towers on it. But what are the markets around HACO that you think will develop the most of the next five years?

[Travis Comstock]

I think it's going to push South. I really do. And I think it's going to push up.

I have clients in town just yesterday and we were in Hermosa HACO up in the hills, the mountains. And it's just amazing to see over the last nine months since I've been here, just the amount of large equipment up there, moving dirt, the amount of for sale signs, the amount of sold signs. So I feel like, you know, as there's no more opportunity on the beach anymore because everything's bought up, that a lot of people will experience when they come here, going up in the mountains, whether it's a tour and they absolutely love it.

So, you know, up there, cooler temperatures, you get expansive views of the Pacific Ocean. So I think areas like that are going to do well. And then, as you said, like areas like Estrella, all the way down to Capos, really.

I mean, with the marina going there, it's, I think the whole area between HACO and Capos just has potential to really explode. And I think the more the HACO explodes, the more it's going to fall out. Yeah, I agree.

I agree.

[Richard Bexon]

Well, my last question for you, Travis, I've kept you long enough. If you inherited $500,000 and had to invest it into a business or real estate in Costa Rica, what would you invest it in and why?

[Travis Comstock]

You know, it's funny because I have this ringing in my ear, I'm sorry. It's funny you asked that because I know you were going to ask that. So I kind of been prepared, like, what should I say?

And my cousin was just here yesterday. He and his family, they were here for a whole week. They stayed at Los Cuenos.

We had a great time. They absolutely love that place. And he drove yesterday from Los Cuenos to San Jose airport.

I didn't talk to him. I didn't talk to him at all about how the drive was, but I got a text from him that basically said, hey, dude, I'm going to start a bicycle reflector company in Costa Rica. I'm imagine what his drive was like and how probably some of the things that he saw.

But no, I thought that was a pretty funny thing because driving at night, it is hard to see a lot of the bikes out there. For me personally, real estate wise, I think you can't go wrong on if it's bought oceanfront, I think ocean always prevails. I think people come here on vacation for the ocean.

I do think as I spend more time up in Biacoal and some of the mountain towns, it would be so cool to see more like Airbnb community or someone do somewhat of a project where you're attracting people because the ocean's right here, but you have this 15 minute drive up this beautiful mountain. And I honestly think it's maybe the first person that comes down to figuring out transportation, whether that unique rental comes with a side-by-side with an ATV, a driver or insurance waivers that they can drive it. But I do think the first person to figure out kind of how to have transportation up there.

So it's convenient, but you're also taking advantage of everything on the coast. Best of both worlds, honestly.

[Richard Bexon]

Cool. Well, Travis, this has been great to get you on here and share your experience and just your viewpoint as a, I would say a somewhat newbie here in Costa Rica, which is always good to get that viewpoint. Because again, our perspective is very different for a lot of us that have been here for a long time.

[Travis Comstock]

No, 100%. I thank you for being a resource to me over the years. And honestly, as you say, I pass the clock quite a bit because it's funny, I'll talk to people and they'll be like, hey, what do you know about construction and retail?

Like, well, what I do know is from this podcast I heard and I sent it to them and everyone gets back and says, man, that's great. Thanks for turning me on to this. Just last week, I sent your podcast to someone who was wanting information on digging for wells.

And I found the, I found a good episode you did. And he got back to me like three hours later. He's like, dude, I'm on episode number five.

I'm, I'm binging it. So I appreciate the support. No problem.

I appreciate you having me on. It's been, it's been great. Not at all.

Not at all.

[Richard Bexon]

Well, Travis, again, thanks very much. Anyone that wants to contact you, I'll put all of your contact details down in the description, but appreciate you taking the time to join us on the podcast.

[Travis Comstock]

Thank you, Richard. Talk to you soon. All right.

[Richard Bexon]

Bye-bye.