The Big Rains are finally here in Guanacaste!

So far in Guanacaste the rainy or green season has been dry and causing concerns for the up coming dry season.  Well this week the concerns have been alleviated as Tropical Storm Sandy has been hitting us for the past week giving us considerable amounts of moisture.  As I write this blog this morning the rains have been constant over night and now well into the morning.  Some minor flooding but no issues.  I am sure in the mountains the rains are just as heavy if not more so.  We need the rains in the mountains to replenish Lake Arenal water levels as this water provides electrical power for much of the country.  Plus the City of Liberia depends on the mountains for their supply of fresh water.  An elaborate system of canals gathers the waters of Rincon de La Vieja and delivers them to Liberia via gravity feed.  This system provides 70% of Liberia's fresh water so come on rain! Rainy days in Costa Rica sure beat the snowy days in Canada.  At least here we do not shovel rain:-)  Pura Vida 

Hike to the top of Rincon de La Vieja Volcano

 Here is an adventure you will not soon forget!  Hiking to the top of Rincon de La Vieja Volcano in the middle of the Rincon de La Vieja National Park is a challenge for the hardiest hiker.  The best time to under take this trek is during April and May when the skies tend to be more clear and you can see the Pacific to the West and Lake Nicaragua to the North.  The hike starts at the Rincon de La Vieja Ranger Station just north of Hacienda Guachipelen.  It is about a 1 1/2 hour drive from the beaches.  The hike is not easy and will take 8 hours or more.  This is not a hike for the unfit!  Be sure health wise you can handle the extensive up hill hiking and in some places you will need to do a little difficult climbing.  The hike starts off in a gentle climb through beautiful rain forest trees and vegetation.  After 4 or 5 kilometers it changes into wind swept volcanic rocks and vegetation.  Near the top as you can see in the pictures it is barren rocks like the Rocky Mountains we are familiar with back in Alberta.   Remember this is the mountains and bring necessary clothing as the weather can change quickly and you could see rain even in the dry season coupled with the altitude and winds, it can get chilly.    The hike signs say it is 10 kilometers to the top from the Ranger Station but in my opinion this distance is a typical Tico guestimate and the distance is considerably further.  We left at 8:00 AM and returned by 5:00 PM - very tired after a long day filled with adventure.  We had our good friend Danny as a guide and would highly recommend you take a guide with you.  They are available at the Ranger Station start most days.  We highly recommend this Costa Rican Adventure - Pura Vida! 

 

 

More Scarlet Macaws in the wild!

Nicoya peninsula now has 60 more free scarlet macaws

The Nicoya peninsula now has 60 more scarlet macaws in the wilds. The birds were released at the Los Delfines golf course at Playa Tambor near Paquera on the east shore of the peninsula.

The birds were raised by the Asociación Pro Conservación de la Lapa Roja. The scarlet macaw (Ara macao) is a threatened bird, but it also is one of the signature birds of Costa Rica. In fact, Los Delfines even has such a bird on the front page of its Web site.

The Ministerio de Ambiente y Energía said that several
government officials were present at the release, including José Lino Chaves of the ministry.

The birds were raised from chicks locally. The largest population of scarlet macaws, of course, is in the undeveloped Osa peninsula.

The association has been working to protect the birds for at least 15 years. This is not the first time that a group was released in the same area. The association also works to reforest areas.

The birds live in holes in trees, so the group also constructed bird-friendly houses that are hoisted up to a safe height.

Expanding Family!

                                                           Candy - Our Rescue Pup

                                                  Argos and Deca - our older family members
Our family in the mountains continues growing.  A couple of weeks ago friends of ours found little Candy wandering the streets of their community.  They asked us if we knew of anyone who needed a dog up in the mountains near our farm.  Well I guess you can see the answer!  Candy now joins Argos and Deca as beloved family members.  When we sent her picture to our daughter, Ryan her husbands only comment wsa "part rabbit".  She certainly has big ears but the German Shepard influence is very apparent.  She has made herself at home and fits right in with the other dogs.  Although she seems to like the chickens - too much!  We will have to be vigilant or our egg production will drop off:-)  Candy was very skinny and weak when we rescued her but she is rapidly gaining strength and putting on a little weight.  We will keep you posted.  Pura Vida!

Financing your dream property in Costa Rica

HI EVERYONE 

THE FOLLOWING IS A GREAT ARTICLE BY MIKE SIMONS OWNER/BROKER OF RE/MAX TRES AMIGOS AND OCEAN PRESTIGE.  FOR THOSE LOOKING TO BUY IN PARADISE THIS MAY GIVE YOU SOME GREAT IDEAS!

PURA VIDA

HERB

IS THERE FINANCING IN COSTA RICA?

WRITTEN BY MICHAEL SIMONS ON SEPTEMBER 12, 2012. POSTED IN BUYING AND SELLING PROPERTY IN COSTA RICA

You will see all kinds of information on the internet about obtaining financing in Costa Rica.  Many websites tell you that they have financing options available through the National or Local banks.  I have been selling real estate in this country for almost a decade, and only a handful of my clients have been able to obtain a loan with a Costa Rican bank. 

Its not that you cant get a loan, it’s that most foreigners, after reviewing all the documents and costs, don’t take the loan.  First off, it is very difficult to qualify for a loan if you are not a permanent resident of this country.  The paperwork is mind boggling and the banks do not operate with the efficiency that you are used to in the USA or Canada.  It can take months for an answer which is usually NO anyway.  Second, the fees are very high; usually 3 to 5 % higher than a traditional loan in North America and the closing costs are as much as 3% of the loan, on top of the normal closing costs.

So when most buyers see these numbers, they change their mind and search for an alternate way to purchase their little piece of paradise.  One of the reasons Costa Rica is so stable, in my opinion, is because they don’t lend money.  We all know that the problem with the USA was the banks poor lending practices.  In the history of this country not one single bank has ever failed.  That is an amazing statistic.  It’s because they don’t frivolously lend money, and they almost NEVER lend money to foreigners.  As a client of mine from Tallahassee says, “you gotta pay to play”.

The people who own property in Costa Rica are very financially stable individuals because they usually had to pay cash for their property – one of the reasons we saw no foreclosures and very little slide in our values after the big crash a few years ago.

So how can I buy inCosta Rica, if I don’t have all the cash you ask?

There are a few options and lets explore them here for a moment.  Many of the developers will actually carry in house financing, so if you are buying directly from the developer himself, this could be a good option.  As with any property, it is important to verify the financial stability of the developer and the quality of their product.  This of course is something your real estate agent can advise you about on your trip to Costa Rica as not all developer properties are what they advertise on the internet.  So do your due diligence and always work with a reputable licensed real estate agent and a first class law firm.  Don’t ever buy direct from the developer and don’t use their attorney.

Most private sellers in today’s market are selling because they need the money, and they are open to any reasonable offer.  Probably 50% of the transactions we have done the last few years have involved some sort of seller financing short term.  The mortgage laws in Costa Rica are very strong so both the buyer and seller are protected if a seller agrees to carry a note.  The buyer will close on the property, so they are the legal owners, and the seller will carry a mortgage or a legal trust against the property until the balance is paid off.  We use very secure third parties to handle this transaction, like Stewart Title for instance.  The seller is assured that the buyer can’t sell the property without their loan being paid off and the buyer is assured that when he does pay off the loan, the lien will be removed.  So we have to be creative in writing the offer for the buyers.

Recently I sold a condo for $300,000.  The buyers put down $100k and agreed to pay $100k in 12 months and $100k in 24 months with some small interest.  The seller was happy to accept.

I sold a house a few months ago for $400,000.  The buyer put down 30% of the sale price.  The balance of $280,000 was amortized over 30 years at 6% with a balloon payment in 48 months.  So the buyers pay a small monthly mortgage payment to the seller every month of $1678.74.  In 4 years the seller will pay a balloon payment of $264,920.69 and the loan will be paid in full.  If the buyer chooses to pay the balance off early, there is no prepayment penalty and the seller is always happy to get their money early.  Many of the buyers today have assets, usually a property they are trying to sell in the USA or Canada.  Having these 4 years allows them time to sell this house without having to drastically reduce their selling price and take a loss.  Many people are property rich and cash poor so this is a good option for them, as the time to buy has never been better. 

Most buyers realize that if they wait until they sell their property back home, the deals will be gone here in Costa Rica.  So this allows them to take advantage of the buyers market without taking a huge hit on their existing real estate portfolio back home.  And with the rental market being so strong here in Costa Rica, most people can very easily cover their monthly nut doing vacation rentals through a local property manager.

I have also had many clients tell me that they were more than happy to cash in their 401k or other stock market investments and use that money to pay cash for the property.  With the uncertainty in the market and the fact that most people’s 401k’s are as flat as a Nebraska corn field, using that money to purchase a home or condo in a growing market like Costa Rica just makes more sense.

But one of the easiest ways to purchase your dream property in Costa Rica is by using what’s called a Self Directed IRA.  Many people do not realize that they can convert their current IRA or 401k into an IRA that they themselves control.  It is actually a very simple process and most companies can process it in less than 30 days.  I have had dozens of US citizens buy their house or condo this way in the last 3 or 4 years.  If you would like more information on purchasing property in Costa Rica with your IRA please send me an email and I can put you in touch with some good companies in the USA who can answer all your questions.

Canadians actually have it the best.  Canada did not experience the same recession as their southern neighbors for the simple fact that they have always followed proper lending practices.  You must have a good credit rating, a solid verifiable income and put down a minimum of 30% to even obtain a loan in Canada.  Obviously, the USA should have been following these same rules.  But when you give home loans to Burger King Employees, with no money down, we should have known we were destined to fail.  Due to their diligence, the Canadian market is still quite strong and most home owners have a tremendous amount of equity in their homes.  So most of my buyers from the Great White North, just walk into their local Scotia Bank back home and apply for a simple Equity Line of Credit.  With the current interest rates as low as they are, this makes tremendous sense, so the majority of my Canadian buyers use the value in their personal home, to purchase their second home or future retirement property here in Costa Rica.

Many of my buyers understand that it might be 3 to 5 years until they can actually start spending time in Costa Rica.  But they want to take advantage of the buyers market before all the deals are gone.  So many clients end up purchasing a vacant lot instead of a condo or house.  This of course costs substantially less and they have practically no carrying costs on the lot.  Then in 5 years when they have the cash and are ready to make the leap, they can hire a builder and have him build their dream home exactly as they envisioned.

So you can see there are actually many ways we can work around a tough market and help your dream come true.

We have even negotiated a few trades in the last few years.  One person traded their yacht for a Costa Rican home and we have had condo swaps as well from people in Miami trading their condo for a property here in Costa Rica.  Again, it is about being creative and that is something we are very good at.  But the best advice I can give you, is that these opportunities are not going to last.  We are seeing inventory disappear quickly and I think we only have another year or so and they will be gone.  So don’t wait for your house in Atlanta to sell before making the leap to Costa Rica.

Come down, spend a few days looking around and see if you can find that little piece of paradise.  If you do, let’s sit down, and be creative and see if we can put something together that works for you, that you are comfortable with and a plan that won’t put stress on your financial situation.  In the end, this is a dream you are trying to achieve and the last thing we want is for you to feel pressured.  But at the same time, we don’t want you to miss out on the buying opportunities that this market presents.  So don’t procrastinate too long or all the deals might be gone.

Pura Vida,

Michael Simons

Costa Rica 1947

 Click on this link to see a great video on what Costa Rica was like in 1947.  In some rather pleasant ways Costa Rica has not changed much!  This truly is Hawaii of the 1950s right now!    Costa Rica 1947

IDB Approves $250M for Electricity Sector in Costa Rica

WASHINGTON, D.C. -- The Inter-American Development Bank (IDB) announced it had approved $250 million in financing for Costa Rica's electricity sector. Nearly $98 million will go to the Reventazón Hydroelectric Project, and the remainder will go toward investments in improving state power company ICE's electricity generation, transmission, and distribution capacities. IDB aims to improve the quality of energy and improve coverage in rural areas, according to press.

In May, ICE said it plans to invest $9 billion over the next 12 years in the nation’s power sector, with the majority to go toward generation in hydro, thermal, and geothermal. And IDB is further involved in the region, announcing earlier this year joint investments with the Japan International Cooperation Agency targeted up to $600 million in green energy renewable and energy efficiency projects in Central America and the Caribbean.
Costa Rica derives 12 percent (163 MW) of its electricity production from geothermal energy, the GEA noted in its recent “Geothermal: International Market Overview Report.” In fact, it was one of 39 countries identified in 1999 by GEA as having the potential to meet 100% of their electricity needs through domestic geothermal resources.
The majority of countries in Central America have developed a portion of their geothermal resources for utility scale power production. In Central America rapid economic growth, increasing dependence on imported fossil fuels, and a push to overcome regional fragmentation through the SIEPAC (Sistema de Interconexion Electrica para America Central) transmission interconnection have created the need for the development of the region’s renewable resources, the
international overview report noted.
This article was originally published in GEA's Geothermal Energy Weekly and was republished with permission.