Investing in Costa Rica: What's the best area for me?

Investing in Costa Rica: What’s the best area for me?

As we have reinforced in past articles, the art of investing has two very important components: the technical/financial research analysis and your choice of lifestyle. If you’re able to pick the areas where both of these are met at the highest level, then the first stage towards achieving a well-balanced portfolio would be complete.

Costa Rica is one of the most economically and politically stable countries in the world, however, like any other country, we have our challenges to improve laid out in front of us. We need to improve government efficiencies when it comes down to public institutions (even closing a lot of them).

We also have to do a major restructuring of how education is brought to all levels so we can fulfill our growth path and most importantly we need to further strengthen our democracy as the backbone of our country. Costa Rica is a small piece of land but very very diversified in lots of levels including idiosyncrasy of its people, geography, climate, and economic growth. In this article, we will describe the three major areas of interest taking into consideration these variables.

GAM (Great Metropolitan Area)

This area is composed of the major cities in Costa Rica, San José, Heredia and Alajuela. More than 2.5 million people live in the Central Valley accounting for 50% of the total population. The mountains surrounding the GAM are beautiful, filled with volcanos and forests, it only takes a short drive from the city to enjoy nature and get away from the busy week life of the city. Education levels are really high. The best colleges, both public and private are located in the valley.

Currently, this area of Costa Rica is experiencing an economic contraction due to several reasons which include the fast rise of interest rates, an increase in the tax base and also the rise of prices of raw materials in different industries. Overall, people are being more selective on their spending patterns which leads to the contraction we’re currently living. The real estate market has changed and we have seen an increase of long term rentals being predominant over transactions. It’s a great time as an investor to take advantage of this and make good real estate deals happen (always remember that cash is king, more so in moments of distressed, also a healthy debt/asset ratio will enable you to stay ahead of the game).

Guanacaste

Currently, the best spot to be investing your time, energy and money. Guanacaste has everything an investor dreams for. Geographically, is one of the most beautiful places in the world, with breath-taking beaches all over the Peninisula. It only takes one sunset in Playa Grande to understand what I’m talking about., but who doesn’t know that right? So let’s focus on the two not so obvious things on why this an investor’s paradise on 2019

– Guanacaste is a mixing pot of many nationalities, living and working together. Born and raised guanacastecos that were born after 2002 have grown playing, fighting, studying, hugging, kissing and more with people from different countries. You want to always invest in a place where these type of social interactions happen at a really young age. In 5 years, they will be part of the active labor force of Guanacaste, which means as an investor you will have access to a really qualified, socially skilled, educated population.

– Guanacaste hasn’t figured it out yet. This is a huge opportunity not only as a real estate investor but an overall one. A region with this potential on early “true” growth years rewards business creativity, intelligent work and dedication 100%. Why? The bar is not set high enough on many different industries, hence allowing an investor a couple of more strikes on early stages. It’s a great time to diversified your portfolio! So, if you’re a succesful real estate investor, why not start another venture? If you’re that type of person this is the right time to do it.

Central Pacific Area.

Another great area in the country to live happy and invest wisely. This is one of the first major beach areas that developed faster in Costa Rica, mainly because of the closeness to the city, currently it only takes a 1 hour and 30-minute drive to get from the airport to Jaco, Herradura and Hermosa, which are the main places where expats have decided to live and invest in the last 20 years, and also a lot of costarican people from the city have decided to build their weekend homes in places like Punta Leona, Los Sueños and other gated communities in the area.

There’s a bit for everyone here: great surfing, fishing, and vibrant nightlife make the Central Pacific an all in one stop for everyone. In the last 3 years, the area has seen a big growth in the residential projects available, not only on the number of projects but on the target audience for them. There are good opportunities for early-stage investors with limited capital as well for the more experienced, networked individuals. We foresee steady growth in the area with more expats and nationals looking at Central Pacific again as a great place to settle.