We tell you how to achieve successful results when investing in the country’s real estate market and what aspects you need to pay attention to. Continue reading until the end of the article to find out what to do in case the property title is not registered in the National Public Registry.
Costa Rica is synonymous with beaches, natural immensity, national parks and enjoyment. Investing in a property, to live or rent, can be both a desire and a challenge for many people. When carrying out a commercial real estate transaction, it is necessary to take into account possible risks that prevent making the best decisions to achieve the desired results.
Six risks when investing in real estate
Forget Liens: It happens more often than you might think. Liens can generally be linked to unpaid taxes and the owner’s debts to the bank for the mortgage. Additionally, when registering the property it is essential to verify who the owner is and recent tax assessments. It is not a minor fact since clarity determines how successful the investment will be.
Pay more for property: it is a reality that the Costa Rican real estate market is characterized by rising values due to its intense activity and foreign investment. One recommendation is to be informed about trends in the sector in terms of prices, level of demand by area, type of properties and possible returns on future investment to arrive at a fair purchase value.
Not knowing the maritime zone law on beachfront properties: said regulation, which establishes the conditions for the first 200 meters, was adopted by Costa Rica and has been in force since the 1970s. It indicates that the first 50 meters from the water mark high tide are a public beach, and therefore you cannot build on this extension or prevent access; on the remaining 150 meters establishes that the buyer must lease this part of the property to the local municipality, who is the only one that can approve construction in said area.
Ignore the country’s microclimates: although Costa Rica’s climate is one of the attributes that those who choose the country highlight, it is necessary to mention that there are areas with very high temperatures, and others that are much colder and more humid. This characteristic can become a determining factor when investing.
Not knowing the risks of flooding, rain damage, mudslides and sporadic earthquakes: before deciding, it is advisable to inform yourself and thoroughly inspect the property and the area in which it is located. The places most prone to flooding along with mudslides, in the high rainy season (from November to April), lead to extra considerations: higher insurance policies, difficulty in accessing roads and materials (such as drainage) to reinforce the protection. Otherwise, repair costs can be very high.
For all of the above, buying a property without the support of a professional: it is true that a priori it may be a good alternative to carry out this commercial transaction without the services of a professional to avoid extra expense. But, what may first be considered an economic benefit can become a drawback, since it is very likely that you will face barriers ranging from language to legal regulations and costs throughout the process.
Reasons to buy property in Costa Rica
While there are the risks mentioned above, there are also key factors in choosing to buy property in the country. It is a great investment not only as a home but as a vacation rental, since it is a destination that enjoys increasing popularity with a constant influx of local and foreign tourism, guaranteeing a return on investment.
At ERP Laywers we make your next real estate investment in Costa Rica successful: we have the expert legal advice you need to guarantee the right decisions; We accompany you in the process of registering the real estate in the Public Registry if necessary and according to the requirements of the Property Information Law (Number 5257); We protect your interests and provide you with the security you seek. We look forward to your contact.
