EP13: The Ins And Outs Of Buying Property Abroad (Costa Rica)
We welcome our friends, Brian and Janet, to the Podcast to share their love of Costa Rica and their experience buying property in Playa Grande, Costa Rica!
How to pick a region- explore towns, beach hop, try some places out. Some major deciding factors would be ease and cost of transportation to and from, an array of appealing activities nearby, size of town that you would enjoy, how much time you will be spending there, how much upkeep you are willing to take on, how many people may be joining you at any given time, etc.
Define your ideal type of property- a condo, stand alone home, a new build, how many bedrooms, bathrooms, yard size, etc. However, keep an open mind and be willing to look at other options. Brian and Janet never wanted a condo, but that’s what they ended up buying!
A knowledgeable Real Estate Agent is a must, but there is no MLS in Costa rica and real estate agents specialize in their own town, but not all the other nearby towns. Some properties are online, but not all.
Meet with a financial advisor to see what you are able to afford with or without renting it out.
Financing- You can not “finance” a property in Costa Rica, they require a “cash payment”. Costa Rica also requires that the paperwork be filed by an attorney, so you will need a lawyer. Brian and Janet’s attorney recommended that they set up an LLC in both the United States and in Costa Rica to purchase the condo under for a variety of financial, tax, and safety reasons.
AirBnb- the management company handles everything for you. You can block off your own time, see the rental calendar and who is renting and when. You can customize your home the way you want and have a locked closet for your personal items. You do not have to pay to stay at your property, but you do have to pay a cleaning fee. They will maintain the property for you and at the end of each month, you will get a statement that is either positive or negative depending on how much it was rented and how much maintenance needed to be done.
Accountant- You may want to hire an accountant to help with the taxes. You do pay property taxes in Costa Rica and on some tax filings for the Costa Rica LLC.
Write offs- there are a certain amount of write-offs you can claim for travel to and from your property and other expenses.
Owning a car: Brian and Janet do not have a car in CR. Sometimes they rent one and sometimes they don’t, depending on the purpose of each trip. If it’s a just for fun trip, they may not need it. Their condo is near the beach, bars, restaurants, etc. Some excursions can be booked from the vendors down at the beach or from Trip Advisor/Viator. In addition, their property manager can arrange rides to and from the airport and to other nearby attractions. If they needed to work on their property and had a large array of errands, they may rent a car to facilitate that.
Travel Guilt? Will you be tied to CR now? Brian and Janet think they will go a few times a year until their kids are settled, but their long term plan is to retire there. They will continue to travel the world, and won’t feel guilty, because if they aren’t there, it’s likely rented and making money.
Community Involvement: Brian and Janet have met some neighbors and are getting to know their new town. They are intent on establishing friendships and have a strong desire to be a part of the local community. They do not want to be just “American investors” as they want to feel personally connected to the people, the culture, and the country and they think that’s a crucial factor when buying property abroad.