Can I Get a Mortgage on a Home in Costa Rica?

By: Ron Snell.

Clients often ask us about options for financing their purchase when they are thinking about buying a home in Costa Rica. For a long time, those options have been pretty limited, but there are new possibilities opening up.

The standard answer is that if you can’t purchase with cash, you could request short term Seller financing. If a Seller does not need all of the money immediately, they might consider something along the lines of 50% down, 3-5 year term, and 6% interest. That would allow enough time for you to reach retirement age, cash in some investments, sell a property in your home country, get moved down here, and then pay off the loan.

Beyond Seller financing, the best option has been to borrow the money in the home country by means of a loan from relatives, a home equity loan, or some other lender. Home country mortgage lenders and banks typically don’t lend overseas, so you have to have some other source. In addition, if you are not a legal resident of Costa Rica when you buy, it is very difficult for you to get a loan from the normal banks and lenders.

Recently we have heard from some companies here in Costa Rica that have begun to make loans to foreigners for homes. While they aren’t for everybody, they might make it possible for you to get your dream home without Seller financing and pay it off when you are ready.

Keep in mind that many homes here are second purchases so they are treated like vacation homes. As is typical in other countries, loans for vacation properties may face extra scrutiny and higher fees and rates.

We just received information from a lender who is advertising mortgages for homes here. Note that this blog is being written in May, 2019. Things can change, but here is the information we received as of this writing, with a few annotations:

 

The interest rate and down payment will depend on your home country credit score, as follows:

 

All Owner Occupied & Second Homes in Costa Rica

Minimum Loan Amount: $100,000   Maximum Loan Amount: $1,000,000

FICO (US only)CANADARATEUP TO LTVMAX DTI
>=800>=8508.50%75%28% / 45%
770-799820-8499.00%70%28% / 45%
740-769790-8199.50%65%28% / 45%
710-739760-78910.00%60%28% / 45%
680-709730-75910.50%60%28% / 45%
650-679700-72911.00%60%28% / 45%

 

Using a best-case scenario, this means if you have the top tier credit score, you will pay at least 25% down and have an interest rate of 8.5%.

Additionally, there will be extra fees associated with getting the loan, and some of those fees will be much higher than you are used to in your home country.

 

Loan origination 4% of loan amount. (That’s a lot! In the U.S. this is more like .05%.)

Processing Fee $400.00
Underwriting fee $1,295.00
Funding Fee $175.00
Document Prep Fee $400.00
Credit Report $100.00, or $125.00 for 2 people.
Inspection Fee depends on property. Estimate $500.00
Appraisal Fee depends on property. Estimate $1,000.

 

If you were to buy a $400,000.00 home and you were in the top tier of credit ratings, here is how that might look with a minimum down payment of $100,000 and a loan of $300,000:

Down Payment:              $100,000.00
Loan Origination Fee:    $ 12,000.00
Underwriting fee:            $ 1,295.00
Funding Fee:                    $ 175.00
Document Prep Fee        $ 400.00
Credit Report                   $ 125.00
Inspection                        $ 500.00 (Estimated
Appraisal Fee                  $ 1,000.00 (Estimated)
Normal Closing Costs     $ 8,000.00 (Assuming 50/50 split with Seller)
                   Total to Close $ 123,895.00

 

These numbers come from just one company. There may be others as lenders open up offices here, but these will be representative as you consider your options.

One final thought: If you are purchasing a nice property to be used as a rental for a while, you might very well recoup your upfront costs (minus down payment) within a year. Then renters would make most of the monthly payments for you until you move in and pay off the loan. Run the numbers, talk to a rental management company, and consult an attorney. It’s certainly something to consider!

The “Perfect” Pineapple Smoothie

By Ron Snell

 

So people will argue with me about this because “perfect” is in the eye of the beholder, but I’m going to tell you anyway how to make the perfect pineapple smoothie.

It’s not original with me, so I can’t take the credit for it. I learned it from a friend who had a

smoothie stand in Dominical on the Southern Pacific Coast of Costa Rica, where I would take breaks from helping people buy or sell properties to get a quick refresher. Although I don’t deserve the credit, you can still thank me, because without me you might never have known.

First, let me just say that until you’ve had fresh pineapple from very close to where it’s grown, you haven’t really had fresh pineapple. Personally, I never ate fresh pineapples in the U.S. because they always had too much acid in them and my mouth is especially sensitive to that, leaving me instantly with sores.

Of course, we could say that about lots of things down here were buying real estate in Costa Rica comes with all kinds of fresh fruits whose flavors and consistencies you simply can’t compare to what you buy in North America or Northern Europe. Eat a few bananas down here and you will never again be content with what you get “up there.” Mangos, starfruit, mangosteen, lychees, papayas—there’s a reason places like Costa Rica attract people who want to eat healthily and live active lives.

So… the perfect pineapple smoothie:

Step 1. Get a good pineapple. It won’t take long to find a favorite source that you can go back to over and over, but until then don’t worry: you’ll see options in roadside stands and grocery stores all over the place. The thing is this: buy one that is already mostly yellow. It can have tinges of green on it, but if it’s too green it might not develop the juicy sweetness you’re looking for and may remain acidy.

NOTE! Feel it all over gently, probing for soft spots and particularly rot or too much softness around the stem. If it’s already juicy/squishy there, give it a pass because that rot can already be extending up into the pineapple from the inside.

Step 2: Cut the top off, peel it, cut the hardcore out, and slice it into small pieces about the size of two or three dominos stacked one on top of the other. Keep in mind that the top, that part with the prickly leaves, is all you need to get another pineapple started, so leave it with enough meat to hold it together. Toss it onto the right patch of ground and it will send out roots, right itself, and grow into another pineapple plant.

Step 3: If your pineapple is one of the small ones that are very common around here certain times of the year, put all of one pineapple into a medium ziplock baggie and then into the freezer. If your pineapple is one of the larger ones, you can get two ziplock baggie’s worth.

Step 4: While your pineapple pieces are freezing, collect a bottle of coconut syrup (“Sirope de Coco”), a container of plain unsweetened yogurt, and milk. Stash those in the fridge.

Step 5: When you’re ready to go to heaven without having to die first, put enough water in the ziplock baggie to cover the pineapple and loosen it a bit. Put ½ Cup each of milk, coconut syrup, yogurt and the contents of your baggie into a high-speed blender and whip it smooth.

Step 6: Pour into two tall glasses, grab two fat straws and a comfortable chair in a beautiful place, and enjoy! Trust me: The only thing better than this will be the next one!

“If I Move to Costa Rica, Do I Need to Learn Spanish?”

By: Ron Snell.

If you want the shortest possible answer to this common question, it would be “No.”
There are thousands of people who come to Costa Rica with only a few Spanish words in their pockets, and they have a great time here. Fortunately, many Costa Ricans in areas where foreigners hang out have learned enough good English to make sure everyone has a good time.

That’s the advantage of speaking the world’s number one language for business and tourism.

Many people even move here and love it for many years and never achieve fluency in Spanish. Maybe they know some basic vocabulary and can understand people who speak it slowly and clearly, but they wouldn’t be able to create three grammatically correct sentences in a row. Others learn to speak it very fast and fluently, but that might mean they have just gotten really proficient at stringing together a whole bunch of bad grammar quickly.
So the short answer is “No”, but there is a longer answer. Or maybe there are just some other considerations. Here are a few of my tips:

1. Everyone learns some Spanish if they are here long enough. What I would say about that is, “However much you learn, whether one word or 1,000, learn to pronounce it correctly.” Believe it or not, good pronunciation shows respect for the language and makes people think you know more than you do. Over and over, Costa Ricans say “You speak excellent Spanish” when someone has just uttered the only six words they know, but with perfect pronunciation.

2. Whether you know a lot or a little, respect the language. Once in a while we hear a foreigner fake speaking Spanish by exaggerating certain sounds or mocking the intonation.
There are contexts in which this is funny, but too often in public it comes across as implying that they think the language is nothing more than babbling monkey chatter. As a language teacher, I’m one who believes it’s valuable to mimic sounds and intonation, but it should be done in a way that doesn’t offend. Save it for your home or language class.

3. When you decide to learn a little Spanish, be reasonable. Set realistic expectations and don’t buy into marketing hype that wants you to think if you just buy this or that course, you’ll be fluent in a couple months. Languages don’t work that way. It took you several years to learn your first language, and the truth is that after 67 years of using mine, I’m still learning. So it will take you several years to learn this one. So what?

4. Learn a little well, and use it a lot. Being able to say some basic things correctly has as much value as learning to say a lot of things incorrectly. In addition, once you have some basic stuff you can say correctly, you can build on that. A solid foundation allows for some magnificent buildings, whereas a bad foundation can’t support anything worthwhile. You will find that the more you know well, the faster you will know more. That’s just how it works.

5. Finally, keep it fun. Laugh at yourself. Treat it like a puzzle or a fantastic neurobic exercise, which it is. Imagine your new language as WD40 for your brain, spraying off layers of rust and allowing it to move quickly and smoothly. Languages do that. They also offer insights into culture and open doors to friendships. Make steady progress, but don’t let it ruin your day.

You may never become as fluent as you wish, but any step in that direction is a step you will be glad you took.

How Do You Get Up Those Roads in the Rainy Season?

By: Ron Snell.

Directions for finding a property in Southern Costa Rica almost always start off something like this: “Drive down the coastal highway until you see this landmark, then turn left and go up the mountain.”

In a place where almost no roads are paved once you leave the coastal highway, that bit about going up the mountain can be rather intimidating to the uninitiated. Many a newcomer has asked us, “Is this road even passable in the rainy season?

The short answer is yes, but of course it’s a longer answer than that.
Most roads were cut into clay hillsides and as almost everyone knows, clay is the perfect soil for slip and slides. Left on its own in the rain, it would provide about as much traction as icy
pavement in Northern climates. Get a steep enough hill and you could create a superb tropical amusement park selling tickets to let people slide down it on their bare backs in the rain. I should know—I used to do that as a kid in Peru.

The good news is that layers and layers of rock or gravel have been added and packed into the roads over the years, creating a base that holds up well in the rains. Soft spots may emerge here and there, or extra heavy traffic may temporarily damage roads if they are too wet, but by and large there are few reports in the area about people not being able to go where they want even in the heart of rainy season.

Counterintuitively, our roads can actually get more dangerous in the dry season than in the
rainy season. This is because when the roads are wet, the clay acts as a sort of mortar holding all of the rocky gravel in place. Then when the roads dry out, the soil turns into dust, the rocks start rolling around, and now you are driving on ball bearings.
Most neighborhoods therefore do some serious road maintenance twice a year: once toward
the end of the rainy season in December, and once just after the end of the dry season in May.

Routine maintenance involves bringing in the appropriate truckloads of fresh surface material, a road grader and a packer. When it’s done, the roads are safe and scenic.
So… generally speaking the roads are not of great concern when you are looking at properties.

You will get used to them very quickly and not give them a second thought.However, there are a couple of things to always keep in mind when driving up and down our roads:

1. Take your time. Unless you have a genuine emergency, there is no reason to drive fast. Speed is the greatest contributor to torn up roads, especially in the dry season. In addition, your ability to stop quickly is radically affected by the condition of the road. Right around the corner there may be a pedestrian, a cute animal, or a fallen tree. You don’t want to hit any of those.

2. Use 4-wheel drive. Depending on the road and the season, many roads don’t require 4 WD, but you will save both the road and your tires by using it anyway. The more tires you have pulling, the less likely it is that you will spin and tear up the road surface.

3. When you purchase property in rural Costa Rica, always ask about road fees. Most of our
neighborhoods ask residents to contribute annually to road maintenance. It’s not legally
required, but doing so speaks volumes about your attitude toward community and your desire to maintain your property’s value, your safety and your enjoyment as you come and go. It’s a small price to pay for living in this beautiful place.

Earthquakes in Costa Rica.

By Ron Snell.

When we’re showing properties to people who want to buy real estate in Costa Rica, sooner or later an inevitable question comes up: “Are there earthquakes here?”

The short answer is, “Yes.” But there’s a much longer answer because the real question is, “Do I need to worry about earthquakes in Costa Rica?” And the short answer to that is “No.”
Costa Rica, and therefore every property in Costa Rica, is on the “Ring of Fire.” Take a second to Google “Ring of Fire map” and you will see images of a map with a bright red line that runs right down the western side of the western hemisphere, including Costa Rica.

There are a few good things to point out here:

First, that’s part of what makes Costa Rica topography so amazing. It’s why I’m writing this in a home near Dominical that’s 1,100 feet above sea level but I can see and hear the surf. A long time ago some massive plates under the sea starting pushing toward each other just like if you and a friend put your hands on a rug from opposite ends and pushed toward each other. Do it slowly and you can watch a mountain range push up between you. Put some luxury homes on one side of that mountain range and you have… voilá… the Southern Pacific Coast of Costa Rica!

Every once in a while those plates still get a little uncomfortable and need to move a bit.

When they do, we feel a gentle shake that simply reminds us we are on active earth that supports our beautiful forests and animals and homes. We feel those shakes every few weeks, usually so slight that we aren’t sure if it’s something we did or something the earth did. Once in a while they are a little more powerful and we can hear a little clinking of wine glasses or see a bit of jiggle, but that’s not common.

Second, our soils don’t liquefy in an earthquake. When you buy land, you will be required to get a soil test done before you can get a building permit. In our area, I’ve never heard of a building project being rejected because of a bad soil sample unless it’s due to uncompacted fill or accumulated rubbish in the soil).

In other parts of the world, soils are the opposite of that magic mud you made as a kid.
Remember how you suspended cornstarch in water? When it was just resting or moving slowly, it was like a liquid. When you slapped it, it was hard. Those nasty soils in other parts of the world, on the other hand, are solid when they are stationary, but turn liquid when they are shaken, causing a lot of damage. Ours aren’t like that, so earthquakes don’t affect their
supportive strength.

Third, Costa Rica is picky about construction, and especially foundations. When I was a real
estate broker in Texas, it was unusual to show a house that didn’t have at least a little cracking because of movement in the foundation.

Here in Costa Rica, I can show you 50 homes in a row with no structural cracking (we might notice some hairline surface cracking of the exterior plaster, but it’s cosmetic rather than structural).

Before you can build here, you have to submit your plans to the College of Architects and
Engineers. They go over the plans with sharp eyes to make sure there is enough concrete and reinforcing bars. When they put their stamp on the plans, you can be sure that your home will be well built because your architect or engineer is responsible to visit the project regularly and ensure that it is built according to the plans.

So that’s my longer answer to two questions: Do we have earthquakes here? Yes. Do we worry about them? No.

How Much Should I Offer on That Property?

How Much Should I Offer on That Property?

By Ron Snell

Just yesterday a fellow agent in my office and I were discussing this question with some of his
clients. They were insistent that they had done their research and they”knew” that they could
come in with an offer of about 60% of list. Were they right?

Well… they’re mostly wrong but occasionally right. Unfortunately, the times when they might
be right are the exceptions. A person can win the lottery and make a lot of noise about it, but
that doesn’t mean it’s likely you will win the lottery.

Getting a “good” listing for 60% of list price is rare. 80% isn’t common. 90% is approaching
reality.

If someone gets a property for 60% off of the list price, it isn’t usually because the Seller just
got diagnosed with a brain tumor or the wife just kicked the husband out of the house. Far
more often it happens because no one else wants the property and the owners are desperate
to get out from under it. Maybe it was a design that the owners thought was brilliantly creative
and everyone else thinks is a “What-were-they-smoking-when-they-designed-that-place?”
Maybe it just doesn’t have anything that says “WOW!”

Another reason for succeeding with a lower offer might be that the owners insisted on an
artificially high price and the listing agent(s) couldn’t talk them out of it. Then after a few years
of no showings, the owners are grudgingly accepting that they were wrong and they are just
going to have to swallow hard. There are still listings from the good old days when anyone
would pay anything to live in this part of Costa Rica, and if you paid too much back then,
well, reality check: today’s market is different. There is a new norm. Lots of people still want to
live here but are being more realistic about how much they will pay.

“The market” is an adjustment that takes a few years to self-correct. I’ve had an experienced
agent tell me, “Those houses are all priced under market”.And I have replied, ” If all the houses
are priced under market, wouldn’t that mean that the market has changed?”

So how should you proceed when making an offer?

1. Get to know the options in your price range, plus maybe a few houses above and below your
price range. It helps to have a feel for what you can get for how much. At each property, you
view, have the discussion: “Is this a pretty good value for today’s market?”

2. When you focus on a property you like, use your experience in #1 and discussions with your
agent to assess value in relation to its price. Then…

a. If it is a reasonably good value at the price it’s listed, come in with an offer that’s a little less
than that and include some ways to sweeten the deal for the owner (fast closing, all cash, etc)
to see if you can start a productive negotiation. You can always start a little lower than where
you are willing to end up so there’s room for some give and take.

b. If the property is clearly overpriced considering its value in today’s market, make an offer
that matches what you think the value is, even if that’s considerably lower than the list price.
Trust your gut and your agent and don’t overpay; that’s how people get trapped down the road
when it’s their turn to sell the property. A house with no ocean view an hour from the beaches
won’t magically get a view or move closer just before you want to sell it at a profit in 10 years!

As always, your starting point is your own research and an agent whom you trust because that
agent is honest, transparent, and knowledgeable. A trustworthy agent will never encourage you
to overpay, will submit whatever offer is comfortable for you, and will have your back in
negotiations once the conversation has begun.

If There’s So Much Water, Why is There No Water?

I’m writing this in February, a very dry month in Costa Rica. It’s “summer” here, which is what
they call December through April because there is so little rain and the temperatures are a bit
higher.

For the rest of the year, there is rain. During a typical cycle, rains start in April and are pretty
tame until August. They usually get themselves organized later in the day, rinse off all the dust,
bring the wildlife to life.

From September through November, rains are the main events. The whole world gushes under
a daily deluge. Thunder and lighting provide celestial spectacles. Creeks and rivers rise, springs
spring, trickles turn into waterfalls, and frogs all think they’ve died and jumped to paradise!
According to Karl Kahler, writing in the Tico Times on October 3, 2015, if you total it all up,
“Costa Rica receives enough rain to supply an average of 22,000 gallons to each of its 5.1
million inhabitants every day. That’s a lot of water — enough to supply every person on the
planet with 15 gallons of water a day, year-round.”
So why is water such a big deal? Because the collection and distribution of the water has to be
managed, or it all ends up in the ocean where it doesn’t do you much good when you want to
brush your teeth at night.

For many years the laws have stated that for residential purposes, it’s not enough to just have
water. It has to be “authorized” water. There are only three sources of authorized water: 1. The
federal government’s AyA* water system, available mostly in cities and towns; 2. A registered
neighborhood or community ASADA** water system, available in many rural communities; 3. A
legally obtained concession allowing you to use a spring, creek, well, or river for your water
source.
The law has been that without one of those three sources of water, you cannot get a building
permit. Unfortunately, this law hasn’t been enforced with any regularity and many building
permits were granted without authorized water. Many people bought land with the
expectation that water wouldn’t be an issue when the time came to build.

Oooops. In the past few years, the first one municipality, then another, then another began to crack
down and enforce the law. They began to demand documentation before issuing a permit.
Imagine the irony: This has left many land owners huddled under big umbrellas by roaring
creeks in gushing rains unable to sell their land or build because they have no authorized water.
There is a lot more that could be said about this. It remains to be seen how it will all get
resolved, because many people are affected: owners, attorneys who specialize in real estate,

municipalities that lose revenue from building permits, architects, contractors, and of course
real estate agents.
In the meantime, be aware of the issue. If you are looking at buying undeveloped land, always
ask, “What about the water situation?” If the answer is that the property has water, ask for
documentation before you make an offer, because having water isn’t the same thing as having
water rights, right?
If the answer is that the water authorization is in the process, be skeptical about promises
regarding the timing. It can take two years to get a concession, and sometimes more to hook up
to an existing system if the property you are looking at wasn’t included as part of the system.
The one answer you should never accept is, “Don’t worry about it; it will all work out.” That was
true for many years, but it is no longer a good answer. No trustworthy agent these days will
encourage you to move forward on the basis of “thoughts and prayers” when it comes to water
rights.

In the meantime, consider coming to see Costa Rica during the heavy rainy season,
euphemistically referred to here as “green season” as opposed to “the season when sometimes
you can’t tell if that’s rain or if someone is emptying their pool on your head.”
We who live here love the rains. So do the flora and fauna, and so will you.
*AyA is short for Instituto Costarricense de Acueductos y Alcantarillados, roughly meaning “Costa Rican Institute for water
delivery and sewers.”
**ASADA is short for Asociaciones Administradoras de Los Sistemas de Acueductos y Alcantarillados, roughly translated as
“administrative associations for water delivery and sewers.”

-By Ron Snell.

Where on Earth Does the Sun Set?

-By Ron Snell

I just finished showing some clients a few beautiful luxury homes with stellar views of the
Pacific Ocean. Those were Wow! moments, soul filling in the literal sense where you suddenly
realize you haven’t been breathing normally.

Always when looking at that view, the question comes up: “So where does the sun actually
set?” Because the only thing more beautiful than the ocean in all of its moods is a blazing
sunset where you can watch a glowing red ball sizzle right into the water way out there on the
horizon, and you can picture a long, narrow burning path reflected across the water coming
right to your feet, and the clouds flash brilliant colors, and you wear out your Instagram or
Facebook followers with picture after picture of it all.

Back to reality. Astronomical reality. Where, really, on that beautiful horizon, does the sun set?
How much of the year can you actually watch the sun sink into the ocean as it wraps up the
day? Can you believe the property description, your agent, or the homeowner?

Three things complicate the answer:

First, our coastline doesn’t generally run north and south. If you are standing square to the
coastline and looking at the Pacific Ocean, you are tempted to think you are looking west, and
since the sun “sets in the west, well….” Usually, you aren’t. You’re looking southwest, and the
sun will mostly set to your right.

Second, the sunsets travel a lot between December 21, when they are the farthest left (south)
they will go, and June 21, when they are the farthest right (north) they will go. I won’t explain
the astronomy behind this, but you can Google it and spend a fascinating hour refreshing your
memory about things you were supposed to learn in earth science about 50 years ago.

Third, it’s highly unlikely that your agent has ever actually stood on the property both June 21 st
and December 21 st and marked where exactly the sun sets. Instead, it is highly likely that the
agent has heard the owner say, “You can watch the sunsets over the ocean” and has
immediately driven back to the office to include that in the property description.

So what are you to do? How do you know how often you’re going to see sunsets over the ocean
instead of behind the trees or an inconvenient mountain? It’s pretty easy, really.

Point a phone app or a compass due west. Because we are about 9 degrees north of the
equator, on December 21 st the sun will set about 23 degrees to the left (south) of west. On June
21 st it will set about 23 degrees to the right (north) of west.

No amount of fast talking by your agent will change that, so trust the science and set your
expectations. Keep in mind that from September to early December it isn’t going to matter a
whole lot anyway, because it is highly likely that there will be heavy overcast or rain that time
of day. So focus on late December through June. That’s when you are most likely to see the
sunsets.

If you are the sort of person who enjoys this stuff, you would like the app I found for my phone:
Sun Surveyor Lite. It’s free and shows you where the sun will set on any day of the year, among
many other things like times for sunrise and sunset.

By the way, if you’re a photographer, whether amateur or less amateur, this little app has some
very practical value because you can set up shots based on where the sun will actually be,
instead of where you wish it were going to be, any time of day.
Check it out.

5 Key Attributes That Lead To Success As A Real Estate Investor

5 Key Attributes That Lead To Success As A Real Estate
Investor:

There are more than 5 key attributes that lead to success as a real estate investor;
however, we feel that these aspects are important and vital to any investor. What do
you think is important when buying real estate? Good credit? Having the money to
pay it off? Of course, those are factors that determine whether you are an investor or
a buyer who cannot really afford to do what he or she is doing. Let’s take a look at
the 5 key attributes that lead to success as a real estate investor:

1.   A Worthy Rental Strategy

Every good decision starts with a plan or strategy, especially when it
comes to buying a property and renting it out. You need to determine
whether or not you are going to rent out your property the traditional
way, or Airbnb style. Which is more convenient for you and is Airbnb
too precarious? The location of your property will play a part in your
rental strategy as well. Which option will be more profitable and easy
to manage?

2.   Location, Location, Location

The location of your property will play a huge part in the success of
your rental income. Being located in a high touristic area will likely
result in more rental income. You can always renovate your property,
but you cannot change the location of it. Supply and demand will play
a large role in finding the right location. You want to be in a place with
lower supply and higher demand. The location usually determines
how much rent you can charge.

3.   Cash Flow

Being an investor usually means you have the capital to invest. You
want to make sure you have enough cash flow coming in to make a
responsible decision and be able to maintain your properties. Cash
flow is profit coming from your rental property. This will determine
your ROI (return on investment). The more cash flow, the more
equity you are obtaining.

4.   Monetary Consideration

You need to understand the monetary considerations that come with
owning a rental property. A successful investor will analyze the charts
and determine the best way to go about financing. The reason a real
estate investor is successful is because they take time to go over every
possible option and outcome to figure out if they are making an
accurate decision.

5.   A Sense of Property Management

It’s easy to buy a property but knowing how to manage one is
completely different. You need to have the time, money, and skills to
manage your income property. If something breaks down, you as the
owner are responsible to fix the problem in a timely manner.

Therefore, you need the money to do so and the skills to make it
happen or hire it done. Since you are a real estate investor, you need
to have the skills necessary to advertise your property and find
appropriate renters. Look for someone who has paid his or her rent
on time and will not damage the property.

Owner Financing In Costa Rica

Owner Financing In Costa Rica:

Owner financing is when the seller of the property finances the property with the
buyer, or entity acquiring it. When going the route of owner financing, you eliminate
bank fees and associated fees that come with buying a property in Costa Rica,
especially if you are a foreigner. If you have a good handle on real estate in Costa
Rica (like we do here at Dominical Real Estate) you will know the ins and outs and
the advantages of owner financing. During slow economic periods, owner financing
is strongly encouraged. Before experiencing the market slump, many Americans
paid cash for their properties. Since the bank charges much higher fees when
financing, many buyers opt for owner financing in Costa Rica because the fees are
substantially less.

Owner financing is a great option for buyers because they have the utmost
advantage in regards to the transaction. When looking at the terms and conditions
of the contract and finance agreement, the terms are more flexible. As the buyer, you
will pay the seller directly. This is a great option for buyers who have more liquidity.
Most owner financing deals are assisted by a promissory note that includes the
terms and interest rates, as well as the penalties of nonpayment.

Owner Financing in Costa Rica enables investors to buy, which might be the only
hope for some people to own real estate in Costa Rica. You are recommended to pay
off your seller within a 5-year timeframe to be fair. Many financers offer a longer
pay period in order to meet the needs of the buyer and he or she may be willing to
extend the period if the buyer has been consistent with their payments

Here at Dominical Real Estate, we offer owner financing on some of our properties
because we want to make your experience as easy and effortless as possible. We
believe in trust and our goal is to help people make the best investment and find the
best possible property here in Costa Rica for you to enjoy! Whether you choose
owner financing or you want to do everything through the bank that is up to you.
The option is out there and the advantages are in your favor.

One thing to note about owner financing is that the room for negotiating on the
property price is very small to obsolete. This is because the seller is agreeing to hold
your mortgage. The down payment all depends on the owner who is providing the
finances to you. Most owners will require a down payment of 50% of the property’s
value. Then the seller is agreeing to finance the remaining 50%. The average interest
rate is around 7% give or take.

If owner financing is not something you would consider, there are a few other
options we can speak with you about. We are here to find you a property in Costa
Rica that meets all your wants and needs. Don’t hesitate to contact us, as we are
always willing to share our knowledge about real estate in Costa Rica!