A Rare Opportunity to Buy Ahead of a Big Growth Curve in Costa Rica

Often, when I’m on the road scouting out real estate, I find myself in the evening sitting and reflecting on what I’ve seen and the opportunities I’ve found. These quiet moments are rare on a scouting trip. Scouting out real estate can be intense work—long days spent in the sun and talking to developers, or traveling for hours by car, stopping along the way to see whether a piece of real estate or a particular development has the potential to be a good deal.

So, when I get a few hours on my own in the evening, it gives me time to take stock. To slow down and to reflect. And, to put my thoughts in order about what I’ve seen and where the opportunity to buy well is.

Earlier this year, I was sitting in a hotel room in San José, Costa Rica’s capital. From the window of my room, I could see clearly the extent of the development in the city and surrounding area. San José is in the Central Valley—the most populated part of Costa Rica. Around two thirds of Costa Rica’s population lives in the Central Valley.

The lights of the capital city were far brighter than the stars overhead. The city is sprawling and built up. That urban sprawl reaches up to the mountains. To get somewhere with less development, you need to head to the coast. But even there, you’ll see big condo buildings and bars and restaurants crowding for space. A lot of those buildings are catering to tourists. Tourism is big business here. The best known beach towns are thronged with tourists almost year round.

It got me to thinking about one particular opportunity on my radar. The opportunity to buy a lot in one of the most stunning corners of Costa Rica—an area that has been overlooked.

That’s a rare opportunity in Costa Rica today. It’s getting harder and harder to find an untouched corner of Costa Rica. The tourism industry has developed here like few other countries in the region.

Tourism is big business in Costa Rica now. In fact, the country now counts one tourist for every two locals. Pretty impressive for a tiny country—about the size of West Virginia. It’s great news for the country’s economy. But, for a real estate investor, it means that finding a pioneer market to buy property in is increasingly difficult.

But there’s one Pacific location in Costa Rica that’s stayed off the beaten tourist track—and where, for now, real estate prices have stayed low. For decades, Costa Rica’s Southern Zone used to be hard to get to—a nine-hour journey from San Jose on bone-shaking roads.

Until a new highway was built. It cut the commute down massively—and slowly word got out to vacationers. Then, a new highway was put in place. It’s now quick and easy to get here. And more and more vacationers are coming.

The Southern Zone is one of Costa Rica’s most attractive destinations. Acres of jungle roll down toward the ocean. Toucans fly overhead. Monkeys call from the trees. And the beaches are among the country’s best. As word continues to get out, more and more vacationers and second-home owners will come. But, they’ll be limited in what they can buy.

Development is heavily restricted; so this shouldn’t become as built up and overdeveloped as better-known destinations.

In the best-in-class community in the Southern Zone, you could buy a 0.81-acre lot with ocean and mountain views for just $85,000. That’s a killer deal for a lot like this—you’d pay two to three times that amount in better-known tourist hotspots. As the Path of Progress finally reaches the Southern Zone, I predict prices to rise. And, tourist numbers will keep growing.

But, because of those restrictions on development, I don’t see a lot more opportunity to buy at such a good price—or to hone in on the strong rental market here. Buyers at Pacific Lots are ahead of the curve here. They’ll be sitting pretty when values start to rise.

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