Hi,
I’m thinking of investing in a 800sqm plot at costa rica country club and resort, this would be my first property investment, online it all looks good, from what i can see construction is under way and everything looks good. Does anybody has any insight on this development or has invested there themselves? Any advice would be appreciated,
Thanks,
Laura
Laura,
You said this would be your first investment.
Which country do you live in? If it is not Costa Rica, how much do you know about the legal system there, the tax structure, the currency and the stability of the government? If this is an investment, how will you earn a return from the investment? If you expect to rent the place, what are the laws covering a rental property?
I happen to invest in two countries (USA and UK). It is not as simple as it might sound. At least my situation implies the same language even through there are a number of RE terms that do not mean the same between the two countries.
I’ve been investing since 1991 and have secured and resold hundreds of property. I would say that investing in any property that you cannot drive to within an hour or so of your home could prove to be a mistake. There are many exceptions such as if you are buying multi units or commercial property where you can afford in your budget to hire local management. But, if you are managing yourself and especially if this is a first time investment, all my instincts and experience shout out that to be a mistake.
Start small and make sure each deal stands on it’s own…personally, I like mobile home notes. I like being the bank and not having maintenance or repairs. I like small deals and lots of them.
I hope this helps.
Rob
I have yet to see a good reason why it’s a good investment. From a quick google search, I found that the average monthly wage is $400/mth and a basic small house starts at $100K. I don’t see on the face of it how the math works or how you could build a money making pro forma on that. Plus it’s tough to be cost-effective managing from so far away. I don’t see land appreciating there and I don’t see any benefit to investing in a third world foreign country like this. To top it off, what if there’s a change in government?
There are 10 income tax free countries in the world like Turks and Caicos, a self-governing British commonwealth colony, that even if the rental returns aren’t that great there’s some great side benefits. If nothing else, you pay no personal income taxes and inheritance taxes in Turks and Caicos plus they speak English and it’s only an hour and a half flight from Miami. Obama is going to be raising taxes on the wealthy again. Guess who’s going to be moving money offshore and buying offshore real estate again and appreciating the value of land there? If you’re going to invest in a foreign country, invest in an income tax free zone. Costa Rica sounds like a disaster waiting to happen to any real estate investor.