Buying land in Costa Rica can be a great investment opportunity in today’s uncertain market. In the Southern Zone, which is still early in development, there are many opportunities to buy land for both development and investment purposes. The real estate market in Costa Rica is stable. Appreciation of land value has steadily risen in recent years, and it’s expected to continue to rise. An increasing number of expats moving and buying land in Costa Rica combined with conservative lending prices has helped to maintain market stability.
Unlike the mature markets in many US and European cities, Costa Rica is still young and developing. Land prices are projected to experience healthy levels of appreciation. Purchasing land is be an alternative to keeping money in a savings account. With interest rates hovering around zero, land values appreciate faster than money in savings, CDs or money market accounts.
Depending on your long-term objectives and reasons for investing in property, there are several ways to make money on a raw land purchase. Here are several options:
- Purchase a lot of acres and hold onto it. Overtime, the value will appreciate, and you can sell the land.
- Develop a condominium complex or commercial project such as a hotel, retreat space or eco-resort.
- Divide the land up into individual lots and sell them.
Buying undeveloped land can be a great versatile investment that over time can generate income and wealth. Developing the land provides long-term income streams. Dividing land up into lots to be sold generates immediate cash. Purchasing the land and holding it over time is the most conservative action you can take. The later two options don’t require a cash outlay after the property is bought but also won’t generate long-term income. Any kind of development has the biggest potential upside in terms of return on the investment, but it is also the most risky option. It requires investment money. In addition to the cash used to purchase the land, it also requires solid business plan and business partners.
Buying land in Costa Rica can be a complicated process because of the ownership and land rights here. Be sure to thoroughly research the title, boundaries and history of the property with the help of an attorney before purchasing any kind of real estate in Costa Rica. Much of the undeveloped land here can fall under occupation rights instead of ownership rights. You want to be sure that there is a clear chain of title with the property and that the boundaries are well defined. In addition, if you are panning to develop the property than you will need to investigate Costa Rica’s specific laws around development projects.
Costa Rica land can be a smart place to put your cash in today’s economy and a great investment opportunity. Working with an experienced agent and attorney when navigating the process of buying land in Costa Rica will help you avoid common mistakes and pitfalls.