Top 10 Mistakes Property Buyers Make in Costa Rica

  • 3 years ago
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Top 10 mistakes property buyers make in Costa Rica

It’s a jungle out there! So how do I find my way and not get lost? Learn from other’s mistakes so your dream doesn’t turn into a nightmare.

It’s always amazed me how many foreigners come to Costa Rica and lose their senses, doing things they would never even consider back home. It’s like being spellbound, enamored with the stunning landscape, nature and peaceful culture. Hire a lawyer you can’t understand or put money down on a property sight unseen. Really? Granted, there is a legitimate and understandable lack of knowledge, but even intelligent people are still newbies. I’ve had countless clients over the years that needed help fixing their bad decisions.

If you are buying real estate here in the Osa Peninsula or anywhere in Costa Rica you will benefit to learn the most common mistakes people make and how to avoid them.

Table of Contents

  1. Not verifying world of mouth information
  2. Hiring a lawyer that doesn’t speak your language
  3. Overpaying for legal services
  4. Not analyzing the overall cost of ownership
  5. Have a local “hook you up” with a property
  6. Failure to check accuracy of property lines
  7. Make informal arrangements with full time workers
  8. Hire unqualified tradespeople
  9. Make friends with the locals and go into casual partnerships
  10. Over-trusting your surroundings

1. Not verifying word of mouth advice or what you “learn” on the internet

Good luck with that method! “Hey, there’s no building restrictions here – or your neighbor over there will let you get water from his creek. They are going to fix that road – or the electricity is coming to your property next year.”  Ok got it, let’s do it!  Maybe you lack some drama in your life and like to throw money down the drain, so go for it.  If not, follow up and verify everything you hear and read on the internet. Don’t let enthusiasm override your common sense.

2. Hiring a lawyer that doesn’t speak your language

Communication is everything right?  So why take a casual recommendation by a local who says, “don’t worry, my cousin is a lawyer, he’ll take care of you.” Yikes! The same goes for your architect and builder.  If your native language is English than make it a rule to hire English speaking professionals.  You will regret it if you don’t.

3. Over-lawyer and over-pay for services

Lawyers sell their services.  Normal stuff.  But many newcomers pay for services they don’t need simply because of lack of understanding.  And some of these costs are perpetual which you don’t find out about until the following year when the bill comes in your Inbox.  I recently was hired by a new client that has 5 corporations and he doesn’t even own a business, but has one for a property, one for a car, or a corporation that owns another corporation for layered protection or anonymity.  Seriously?  If you wouldn’t do this back home why would you do it here? Interesting question right?

4. Not analyzing the overall cost of ownership

I like to say that buying is the easy part.  Ownership is work.  And it has it’s own cost.  You might find out later that the property you bought out in the boonies needs a full time employee to take care of the place (for whom you need to build a house for so he can live there with his family when you are away half the year).  Insurance, maintenance, road work and general encroachment of the jungle.  If you want low maintenance, my advice is to build with concrete and steel and give it some tropical trimming.  Get over the romance of building a bamboo and wood house with a thatched roof.  Do the math and ask your agent who will give you some valuable insight.

5. Have a local “hook you up” with a property

This means expats included.  The last time I checked, nationality was not connected to honesty or competence.  Remember the possibility of making a commission is the driving force behind their motive. So take caution when you hear ”I’ve been here a long time, I know everything”…or “don’t worry, your lawyer will take care of that”.  My favorite is “this is how things are done around here” – meaning we can skip all that complicated due diligence, regulations and permits.  So don’t go there.  You are setting yourself up for problems when you deal direct with a seller or untrained intermediary.  If you find a property on your own than hire an experienced buyer’s agent to help you.

6. Failure to hire a surveyor to verify property boundaries and natural borders BEFORE you buy

There’s plenty of reason you need to do this…outdated surveys, encroachment over time, different topographers used different references etc.

7. Make informal arrangements with full time workers

This is an easy trap to fall into because it seems like a cheaper and easier option.  No so!  Just like anywhere, Costa Rica has a formal employer / employee system to pay into insurance and benefits so avoid the dreaded visit by the labor inspector who is going to nail you with big fines, liquidation pay and back vacation pay when things don’t work out with your employee and you have to let them go. We are talking thousands of dollars in some cases so what did you really save in the end?

8. Hire unqualified tradespeople to build this or that, manage my property while I’m gone etc.

Always remember that your first world standards are different than your host culture. Costa Ricans genuinely want to help but they unintentionally oversell their qualifications, mostly because they need the work.  “Yes, I am a carpenter, been doing it my whole life.  I can build anything”.  And then the next day he shows up and asks to borrow your tools.  Mechanics that replace parts over a series of visits, basically experimenting until something works.  Or you hire an English speaking helper and automatically assume they know what they are talking about – your mistake thinking language implies competence.  I get it, you need someone to help that you can communicate with. But it’s better to ask around and get references.  And then there’s the mystery of how to pay a fair price for everything you do.  Make an effort to understand the going rate before you buy or hire.  If not, you will usually pay more than you should.

9. Make friends with the locals and go into casual partnerships about all sorts of “exciting opportunities”

“Hey if we owned a backhoe we could make a shitload of money”…or “this town sure could use a good restaurant.” You would do none of these things back home, especially with someone you just met!  But hey, let’s have another beer and you can tell me more things I want to hear.  So keep your wits about you and evaluate the reality.  As they say, if it was that easy everyone would be doing it.

10. Over-trusting your surroundings

The Latin American culture in general tolerates theft way more than first world cultures.  Sort of a rich – poor thing.  I’m not trying to be derogatory but the idea is not to mistake kindness for honesty.  You have to raise your level of awareness.  Theft comes in different forms – some of your stuff disappears or you loan money thinking you will actually get paid back, or pay for something you never get.  Take extra precautions and avoid being a victim.


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Author Jeff Lantz – I enjoy what I do. Connecting people to the land. Something I’m truly passionate about. Helping people that come for all the same reasons I did 30 years ago comes natural. It’s not just about buying a property. It’s about investing in a whole new lifestyle. So feel free to contact me. I’m happy to help.

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