Decline in desirability

Things, especially Migración, move slowly here in CR. That's both good and bad. Yes, they have raised the income minimum from $600 to $1000 a month for Pensionado, but they did that in Panamá, also. It will cost you roughly $2500 total to obtain residency here and it will probably take 12 to 18 months. The good news in that is much earlier you will get a document that shows Migración has approved your initial application and with that you can leave and enter the country at will.

Until you are a resident you can become a "person" for transactional purposes with entities like utility companies by forming a corporation and using that to apply for things. The slow way that is about $200-$300 out of your pocket, about $600 if you want it quick. The downside to that now is they just passed a yearly tax on corporations, which for the purposes above would be about $180 per year and rising. If you buy property here, you will probably want at least one corp. to put that asset in, however.

I do think that CR underestimates the value of its 50,000 ex-pats in terms of how much money and infrastructure they bring to the country and it's a shame that it keeps getting a little harder as time goes by to settle here, drip by drip. However, they are probably not doing themselves too much harm considering that the bulk of U.S. baby boomers are now retiring, at the rate of 10,000 per day for the next couple of decades!

Anyway, would I do it all again? I'd probably do it differently (renting instead of buying/building), but once you get past the first year or two it really is a wonderful place to retire to.

Pura vida,

Casey  -  A Dull Roar - Moving to, Retiring in, and Living with Costa Rica

For the past couple of years the advisers at my employer's pension plan have been telling me to strongly consider retiring in Costa Rica because I won't be able to afford housing and other essentials in the USA.  For a year or so I've been reading books, articles, and scouring the Web for information on Costa Rica living and it appears to me that CR's desirability has declined significantly in recently years ...

In particular, the cost of purchasing a home has risen dramatically -- to the point that every property I find advertised on the Web is unaffordable to me.  Even the "Tico style" homes with no hot water, no closets, 15-amp electricity, and no amenities are more expensive than houses of twice the quality and size in the USA!  For instance, I can find over 100 homes in Atlanta suburbs for under $75,000 that are 150 m2, have 100-amp electricity, full utilities, and a 2-car garage, on a 1,000 m2 lot ... so why would I pay that much for a "Tico style" home of 90 m2 on a 150 m2 lot with no garage and bars on the windows?

Are the real estate companies on the Web just trying to rip off the rich gringos, or is housing really that expensive nowadays in CR -- even for Ticos?

Sensei,

"advertised on the Web..." - this is key.

First, go look at those Atlanta homes in person, check out the neighborhood. You are judging them just by price and a nice picture on the web.

Second, realize that the RE market here is very different from what is in the States. For one thing there is no MLS, no way to do comps. It's very typical for Ticos (and RE agents) to ask at least twice what any property is worth hoping to get lucky.

Third, location makes a big difference. Many people pay way more than I would to live on the coast (where it is hot, go figger). Inside the Valle Central, especially close to San José, prices are higher.

As for "Tico style" homes, about the cheapest you can get are the concrete pre-fab "bono" houses (so called because they are subsidized by the government for the poor). These run about 50 sq. meters and cost about $10,000 plus the lot. I don't know of any Tico homes with only 15-amp service, 50A yes. All Tico houses have at least hot showers.

Our own experience is that we were able to build a custom 2000 sq. ft. home with a million dollar view for $60/sq. ft. plus the lot. We have no heating or AC bill to worry about, plenty of hot water.

Finally, no one in their right mind is saying that CR is the cheapest place to live. You could do much better expenses-wise in, say, Nicaragua, or Ecuador, or Peru, ...

If you somehow have medical insurance coverage for free in the States then by all means stay there.

Casey  -  A Dull Roar - Moving to, Retiring in, and Living with Costa Rica

Thanks, Crenvy!  That was very helpful and informative.  For the record, I have looked at a number of homes in Georgia and Florida in that price range and they are in excellent condition ... most in that price range are, however, short sales or repos of course.

If I had that kind of money, I could build a comfortable home in the USA for $60 a square foot right now -- not in California or NYC, obviously, but in much of the South and Midwest.  Contractors and labourers here are desperate for work.

The most helpful part of your response was the asking price to sales price ratio.  Here in the States low-end asking prices are usually very close to the sales prices these days, because so many low-end homes are short sales and repos.  So a home listed at $75k will sell for no less than $65k, and typically closer to $70k.  But, if I understood you correctly, a Tico home listed at $75k might sell around $40k.  Is that correct?

Does the same ratio hold for expat homes, or do they typically sell at 10% to 15% below asking price like higher-end homes in the USA?

Secondly, if I understood you correctly, there are a lot of properties available that are not advertised on the Web.  Reading between the lines, those would be the lower-priced properties, since rich folks and their realtors are the ones most likely to advertise globally.  Is that the case?  If those two factors are true, then it sounds worthwhile for me to make an exploratory trip to CR.  That is, after all, the point of my question.  There's no sense in me spending $2,500 for a week in CR ($5k for two weeks) if there's no reasonable chance of me finding a home with reasonable size, amenities, climate, and airport proximity for $50k or less. 

On my salary it takes a year to save up that kind of money, so I have to narrow my search parameters to not more than 3 countries that have a high likelihood of offering what I need in the way of housing and living costs before I go making exploratory trips.

I think that clearly CR has changed over the past 10 years in ways that make it less desirable than it was, but I would say it is still very desirable. For example AARP rated it best place to retire a year or so ago and some Happiness Index group - I forget their name but it's a legit organization - just rated it #1 in the world on their happiness index. So CR still has much to offer in terms of happiness.

As to price, yes it has gone up, but where hasn't it? We're in a global recession and oil is always on the rise it seems.

As to home prices I would say that if you want to live in Georgia and homes are cheap enough there, then live in Georgia. Costa Rica has some advantages over Georgia in my opinion.

First of all Costa Rica has micro-climates so you can choose your climate. Rain is a given but some areas rain less. But you can choose between hot and humid at the beach (more or less like Georgia I imagine) or you can choose an almost cold climate in the mountains at around 5000 feet, or you can choose something in between like areas around San Ramon between 2000-3000 feet.

I would say that while some things like beer and pizza are the same price as in the U.S. there are many bargains to be found in food in CR and you can save money on food if you eat the stuff that is not imported, in CR.

Health care is a big one and I know that as an independent contractor I cannot afford insurance for my wife and I in the USA. It's $700-800/month for an $8000 deductible. (Yes that is 8 THOUSAND dollar deductible. Ridiculous!).

Yes you can find bargains if you go to Costa Rica and meet people, especially if you speak Spanish and are willing to live in a Tico home. But you also can find bargains with American homes. I knew of someone who was renting out their brand new 2 bedroom home near San Ramon for $500/month, with a beautiful view. I think if you look around and network with people in CR you can find good deals on rentals especially if you agree to stay for 6 months or more, because renters would rather have a locked-in steady renter than keep having to rent to someone else month after month.

Puriscal is one area you might like, and of course San Ramon and other areas in the Central Valley. Areas like Grecia are pretty saturated with gringos so you'll be less likely to find a bargain there.

Hope that helps. If you have any questions pm me because I don't always check this forum and I think I have my message box here ticked to notify me if I get a message.

Thanks, Samramon, that was again quite helpful ... and has softened my view of CR.  At first, I was very excited about the prospects after the pension plan advisers suggested I investigate CR.  But the more I researched, the less desirable it kept appearing.  Now it's seeming as though the impressions you get on the web -- especially of real estate availability and prices -- may be misleading ....

So I think I'm back to planning a vacation there to get some firsthand info!

you really can't tell what's happening from the real estate websites.  Most of those are aimed at the people who want to live in expensive houses, gated communities, or other plush stuff.  If you are willing to simplify your life, yes, CR is a great place.  Check out this website newsletter written by some friends of mine.  retireforlessincostarica.com

Riggadeaux, thanks for that response!  I haven't reviewed the entire Retire-For-Less blogsite yet, but it speaks to my current lifestyle when it talks about scaling back and enjoying what's truly important in life.

When I was living in California I had a six figure income, a multimillion dollar real estate portfolio, and a 5,100 square foot home on a 3-acre lot in a billionaire's neighborhood ... and I was miserable!  10 years ago I chucked it all for teaching at a Midwest university on a meager salary and dramatically scaling back my lavish lifestyle.

I already live like a "Tico" for the most part here in Indiana!  But as I've approached retirement and seen where the costs of everything are going here (my municipal utilities have increase 15% again this year), I realized that I can't afford to retire in Indiana.  The costs of food and housing alone will exceed my retirement income by 2020!

Thus my research into Central America and the Caribbean!

Thanks for providing yet another excellent resource, Riggadeaux!

Sensei2001 wrote:

Thanks, Samramon, that was again quite helpful ... and has softened my view of CR.  At first, I was very excited about the prospects after the pension plan advisers suggested I investigate CR.  But the more I researched, the less desirable it kept appearing.  Now it's seeming as though the impressions you get on the web -- especially of real estate availability and prices -- may be misleading ....

So I think I'm back to planning a vacation there to get some firsthand info!

Glad to be of help. I know what you mean about how one can barely afford to retire here in the USA. The figures they give out about the amount of money you need to save for a comfortable retirement in the USA are ridiculously high - yet believable. Everything keeps going up.

The main problem of my wife and I is the inaffordability of health care. Even with Obamacare - if it is not repealed - I am skeptical that it will be good and affordable. I know many older people on Medicare who cannot afford their medical needs because Medicare refuses to pay for much of it. It's shameful that our country does not provide affordable health care for its citizens while so many countries - like Costa Rica and Mexico - do.

I have heard so many good things about doctors in Costa Rica and my limited experience with them there does back this up. I know that you can stay in a super nice private hospital there that is like a luxury hotel (I'm not kidding) for less than a crappy hospital here in the USA.

I have a lot of info about how to look for real estate on my web site, just click on my name to get to my profile page where you'll find the url. There are also links to weather charts for CR and other good info.