The panel shared practical advice on how to invest wisely in Guanacaste, especially the Northern Pacific area of Costa Rica known as Guanacaste Gold Coast.
Relevant topics:
Current advantages of Guanacaste
The right timing for investment
Tips and ways to invest in Guanacaste
The intent of this article and the original webinar is to frame thoughts on property investment in Guanacaste with real information from the ground. It’s meant for people interested in investing in the Guanacaste real estate market, to explore the challenges and opportunities.
Advantages of Guanacaste for investment
Specifically, this area with the highest boom within the province, focuses on the coast, from Las Catalinas to Los Pargos. This region of Guanacasteoffers a healthy infrastructure combined with lifestyle and closeness to nature and beaches. In recent decades, it has witnessed major development projects, including infrastructure such as bilingual schools, medical clinics, airports, restaurants, supermarkets, and high-quality housing. In addition, of course, it is a highly attractive area for both foreign and national tourists, so the cultural exchange is very rich.
Guanacaste has become a very strategic growth area in Costa Rica with a combination of the best of both worlds: the comforts of quality infrastructure with the raw beauty and relaxation of the beach.
Why invest now?
2020 and 2021 are key years to invest in the Guanacaste real estate market. No one imagined the arrival of the global pandemic, but it has changed the rules of the game and, with the right research and advice, this represents an advantage for property investors.
There is never a bad time to invest, it all depends on where each person is positioned
Ismene Arroyo – Lawyer and Notary, Partner Sfera Legal
Firstly, it is vital to understand that the area has changed from being a seller’s market, to become a buyer’s market. This means that under the circumstances, owners are more willing to negotiate, since they require cash flow.
Second, considering that the low season runs from May through October, it is the ideal time to analyze investments and educate yourself to position upcoming investments since prices are likely to continue to drop. On the other hand, inventory increases now allow more aggressive offers to be made.
Furthermore, in addition to the fact that the owners are more willing to negotiate financing terms, the interest rates are low, which leads to greater possibility of capital growth and return through rents.
Mid-2020 is at a moment headed towards lower risk market cycle. Where investing now can mean achieving greater economic stability for the next 10 years. Today more than ever technology joins us and is an ally to connect with others, generate conversations and close business.
Ways to Invest
Regarding the types of business where here are specific investment opportunities and the ways to raise capital, the tips are :
There are specific investment opportunities to raise capital and invest in real estate in Guanacaste:
- Direct financing by owner
Before resorting to a bank to acquire a debt, it is worth consulting with the owner. Interest rates, exchange rates and the duration of payments are designed to favor the bank. It is more profitable to dialogue with the property owner and seek an agreement where both parties win, and it’s commonplace in a market with significant inventory.
- Creative collaboration and crowdfunding
Co-investing and crowfunding is a novel trend common in other areas and growing with successful implementation in Costa Rica. This consists of the acquisition of a good, in this case a property, by a group of people. It is very beneficial because it is a faster way of obtaining capital and also helps balance the responsibilities among investors.
- Invest for short or long-term gains
Some of the most profitable investing models include flipping properties, since in the short term they generate a significant return and take advantage of market uncertainty. Likewise, return projects in long-term rentals are very attractive. For example buying a large piece of land to build a complex of houses that can be rented between $ 800 and $ 1500 can generate a return of up to 14%. At mid-2020, rental leads at Nativu have increased 40% since the beginning of the year.
- Commercial properties at a bargain
And finally, taking advantage of commercial spaces is also profitable now, since it is suddenly better to seek to invest in your own property in Guanacaste, with a better location, than to continue to rent.
Part of the Nativu team’s effort is to creatively inform and advise those investors who are interested in starting operations in Costa Rica.
It is important to have a clear vision of what you want to invest in the Guanacaste real estate market. Having this determination and having the support of a Real Estate agency is vital, since it has strategic support in terms of legal and professional issues, which can give you the advantage and make you able to close a specific deal in a shorter period, preventing others from jumping ahead of you and avoiding wasting your time and resources.
The NATIVU team in Guanacaste, lead by Fabricio Riggioni, works together with Sfera Legal to create lasting, wise and purposeful investments and relationships. Together, the team helps buyers, sellers, and investors in Guanacaste with services including:
- Due diligence.
- Sales and purchases.
- Evaluation and consideration of property portfolios.
- Construction, development, and urban planning.
- Land use permits, concessions, environmental matters, and maritime considerations.
- Development loans, complex debt restructuring, and joint ventures for property development.
- Public and private partnership structures.
- Structuring of multiple source loans.
- Support and representation for development and investment projects, real estate funds, mortgage and creditor investors.
