Nosara Real Estate – Available for sale at prices that will make you pack up your other life and move here.

One of our most visited pages is a post regarding technology and internet in Nosara, Costa Rica. As many of our readers are interested in the possibilities of living and working full time in the area, they want to know what kind of technology services are available. Right now, the only game in town for high speed internet hardline, is ICE -which is the government owned and operated telecommunications company.  It’s no surprise, that the service in general provided by ICE for internet and telephone leaves much to be desired. Yes, we are in the jungle, in the middle of nowhere! But that is no excuse! ICE is a government monopoly, and usually, government monopolies are not very well know for their great service, or for having punctual  customer service or repairs.

Well – we have some great news..

Cable Tica – www.cabletica.com – has been installing lines and preparing for the launch of their new services, available to those who live in Nosara and the surrounding areas. Cable Tica kills two birds with one stone; reliable, affordable internet service, and a fully programmed cable TV provider – the first in Nosara…EVER…

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An Explanation of the 13% Sales Tax in Costa Rica – And its application and requirements for real estate commissions.

RE/MAX First Choice Realty in Nosara, Costa Rica has always operated on the philosophy of an unwavering commitment to honesty and  integrity in its quest to best serve all its clients. On occasion, an office policy has come into question by a small number of sellers. The following is our attempt to set the record straight and put this matter to rest.

The matter is this: Ley de Impuesto General sobre las Ventas : 6826 Articles: 1.n – 2.d – 3.c

This law states that:

 “The real estate broker is responsible for collecting the sales tax by law and must charge the owner 13% on the commission for the sale of the property.”

Most people in Costa Rica are only aware of this tax on other goods, and not usually on services. As an example, lets say you go into a Costa Rican restaurant and order a $10 Burger. You will be charged an additional 13% bringing the cost of the Burger to $11.30. (There is also a 10% service fee, or mandatory “tip”, but that is outside the scope of this conversation, and not applicable to real estate commissions). The client pays for the burger, the client pays the tax, the seller collects the tax, and then pays it to the government every month. As with the purchase of anything in Costa Rica there is a 13% tax, and when you hire a realtor to sell your property the same rule applies.

Costa Rican law clearly stipulates that 13% must be charged in accordance with any realtor commission. If a property is sold for 100k with an agreed realtor commission of 5% commision, the commision is 5k, and the tax is $650. Both the commission and the tax being paid are the responsibility of the seller. The responsibility of the broker / vendor is to collect the tax and pay it to the government every month. Despite the Costa Rican landscape unfortunately being rife with realtors who are happy to incorporate this tax into their commission (which in some cases never goes to the government) this practice, although part of some murky legal terrain is essentially against the law. The law clearly states that the commission and the 13% tax have to be separate. Despite a sellers commission being negotiable, any realtor who tells a client that this tax will be subtracted from the commission is operating outside the law. In fairness this policy is common practice among otherwise ethical realtors, so why is it that these agencies who often genuinely wish to operate within the confines of the law end up paying the tax themselves?

Imagine the following scenario:

A homeowner wishes to sell their property and goes about listing it with a variety of realtors. During a visit to realtor A the price is set, the listing agreement signed and the seller agrees to the established realtor commission. The seller then visits realtor B. Whilst reading the listing agreement the seller notices a clause that requires them to pay a 13% commission. This clause was not mentioned by realtor A and the seller senses something is afoot and retracts their listing with realtor B. The problem is that the sellers listing is essential to the prosperity of the business of both realtors. However realtor B has decided that instead of taking the chance of losing the listing they will either absorb the losses incurred by paying the 13% from their own commission, or, (and this may unfortunately be the case in the overwhelming majority of these situations) not pay the tax to the government at all. One often used loop-hole has been for people to represent themselves as mere “ex-pat” advisors and thereby try to circumvent a job title which would force them to adhere to the rules that apply to that profession, since the tax specifically applies to “services rendered for acting as real estate broker“.

However in the eyes of the law, receiving money to execute any real estate transaction incurs the same 13% sales tax.

There is little gone unwritten regarding the wealth of  unique attributes that Nosara and Guiones boasts. Playa Guiones is one of longest established ex-pat communities in Costa Rica and the fact that the Nosara pioneers were an eclectic mix of yogis, surfers and eco-warriors has been fundamental in its pattern of development. They have worked relentlessly to try  to ensure that the unparalleled beauty that attracted people in the first place has remained unchanged.

After circling the globe many a seasoned perma-traveller has landed in Nosara and immediately become aware that unlike so many other utopias that have fallen victim to corporate encroachment Nosara has somehow evaded the pitfalls of “progress” and that the philosophy on which it was founded still rings true. The old adage “paradise lost” doesn’t apply here. Nosara is paradise found, and in spite of relentless opportunities to sell out, it is paradise retained, due in large part to the fact that it has managed to remain off the radar. Whilst this has been a huge draw for those wishing to visit and in many cases call it home, it has also proven a double edged sword, the flip side being that it has also remained “off the radar” to the authorities. Those days are coming to a close and the business people who have long enjoyed operating in an entrepeneurial Wild West know it is time to clean up their act and start playing by the rules.

The implementation of swimming pool codes at hotels, increasingly regular visits by caja to ensure social security payments and the implementation of wheelchair access provisions in hotels all serve to highlight the plain fact that the spotlight has been shone on Nosara by the authorities. It is increasingly being held to the same standards of law as the rest of the country. VAT tax enforcement for all businesses is rapidly approaching. It has already happened in other parts of the country a little further ahead on the development scale, especially in the areas closest to the Liberia Airport. The future is up on us and RE/MAX First Choice feels that we should be leading the way in making sure our business is following the correct codes. We also feel that in an area as complex as the buying and selling of real estate we do our best to keep it simple and we can’t state it more simply than this: None of our agreed commissions include the 13% sales tax that all realtors, agents, intermediaries and brokers are legally required to pay to the government. RE/MAX First Choice Realty places itself in a situation where we risk losing listings and thereby making less money BECAUSE IT IS THE LAW. We will never apologize for following the law; these words may sound overly straightforward but we feel it is high time to set the record straight on this matter, and know there are others in Nosara who also agree. We thank you for your understanding and hope that these words help people to understand that RE/MAX First Choice will always go above and beyond to instill confidence in those with which it has business dealings.  Honesty, fairness and transparency are traits that we know to be essential in maintaining the reputation that we have established as ethical practitioners in an often unethical industry.

Read the Nosara Real Estate Report latest update!  October 2013 – Click Here!

We are proud to announce an ongoing Newsletter to keep our readers informed of  everything related to Nosara Real Estate. In the latest newsletter, we offer some insights on current events and new additions to Nosara, special listings, and mortgage financing offers for Nosara Real Estate.

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Here at Nosara Real Estate Report, we understand the needs of the financially savvy real estate investor who is interested in earning returns on a property in Nosara, Costa Rica. There are different options for investments, with ROI rates that can run anywhere from 5% up to 15% per year, depending on how much you want to hustle or how professional your marketing and management efforts may be.  We have many fully functional income producing properties, complete with full financial statements and records, as well as rental bookings going forward for guaranteed income! Disclaimer – All investments carry risk and returns can vary from year to year; However, we can help to put you as an investor in the driver seat, as we guide you through the different types of investments and income producing properties in Nosara. To start, here is a quick synopsis of types of income producing property in Nosara, Costa Rica:

1) Single Family Rental House – Plain and simple, the easiest and most commonly sought after investment in Nosara, is the single family rental house. The smart investors are looking almost elusively in the Playa Guiones area, as that is the most requested area for vacationers, but there are a couple of other areas that are up and coming and may provide better value in the long run. A rental house can range in price from $250k up to $1,000,000. If you are interested in buying a rental house as an income producting property, we suggest one that is 2-3 years old, since that means the current owner has had time to build a rental role and you are not starting from scratch. Also, it gives you a chance to request expenses on a property, which will help to gauge your own operating costs going forward. This is the most hassle free, easiest option for an investor – you rent the property out to vacationers, on a short term basis (usually by the week). In general, your operating expenses can be covered with just two weeks of rent, Christmas and New Years week, which command a rental premium that can be up to double the normal rental rates. From there, you can expect between 15-25 weeks per year in vacation rentals – although we do have properties that rent in excess of 30 weeks, with some other tricks and tools to maximize the value of your investment property.

2) Multi Family Rental House – Similar to the single family, but with the added vale of compartmentalizing your rental role. A rental property with 2, 3 or even 4 units, can be rented individually, but also, are great for accomodating large groups of multi families that want the “separation” effect of sleeping quarters, but also want to be all in the same area and spend time as a group. This is a very common request for renters, especially during the holiday weeks. Our single best investment property is a 3 family home, as close to the beach as possible with private access path, that is practically booked full for the next high season! Click here for more info.

3) Long Term Rental – Each day, week, month – it seems like there are more and more full timers coming to Nosara to live and work here. This bodes very well for an investor who is looking to have an investment property with the lowest amount of owner involvement and effort, as well as overhead. With weekly and short term rentals, the owners/investors are paying for the majority of overhead, which includes utilities, management, rental commissions, property management, advertising, marketing, etc. Depending on the property, it may be possible to achieve your highest rental returns by putting the property up for rent on a longer term basis. For long term rentals, the tennants typically pay utilities, electric, since it is up to them what they prefer and how much they use. In a long term rental scenario, owners/investors need not worry about marketing, regular maid service, property management, online advertising costs, etc – The overhead and operating costs will simply be general maintenance on the property. For some investors, long term rental properties may be the right fit for your investment profile, depending on the level of operating capital you are willing to commit, as well as the time and effort factors. We have a handful of high end homes that would make excellent choices as long term rental investments.

4) B&B or Hotel Investments – These are once again becoming one of the hottest sectors of the real estate market in Nosara, Costa Rica. Any B&B that is priced right and is ready to go, is selling fast. Rent your rooms by the night, by the week, or by the year, the sky is the limit when it comes to owning a B&B as an investment property. With the huge demand for long term rentals in Nosara, its possible to find a B&B or Hotel that can be converted into suites or apartments perfect for a long term rental complex.

For more information on investment properties – please feel free to contact us for our complimentary “Investors Guide to Income Producing Properties” with all the information you are looking for when it comes to buying an investment property in Nosara, Costa Rica.

Nosara is becoming one the goto hotspots for Destintation Weddings – Affordability, Accesibility from major airports, and the general “wow” factor all contribute to more and more couples choosing Nosara as the location for their big day. Our friends Terence and Britney were married on a large estate in the mountains, while having the reception right on the beach, ending with an amazing display of close friends, family, and fireworks in celebration! We were glad to be part of this amazing wedding and helping to bring this find group of people to Nosara. If you were thinking about a destination wedding, we would be glad to help put you on the right track to doing so. Enjoy the video, its a great example of how special a place Nosara truly is.

The real estate market in Nosara, Costa Rica is affected by a variety of external factors. The most important of these factors, is the general health of the market in the major metropolitan areas from which interested buyers in Nosara Real Estate are coming from. There are a couple of hotspots that seem to be where a large majority of real estate buyers in Nosara originate from – such as the northeast ( including New York City, Long Island and the Hamptons, New Jersey), Colorado, specifically Denver, Boulder, and surrounding areas, and of course, Southern California. Buyers that originate in these areas are very much influenced by the state of affairs of the local real estate markets, and take the experience and market conditions in those local markets, and may apply them when searching for property in Nosara, Costa Rica. In general, the health of the real estate market in Nosara is directly and proportionally related to the markets in these areas. There is an incubation period, and the Nosara markets tend to follow these major real estate markets on a time delay, so what is happening in real estate markets in the US may filter through to the markets here in Nosara – from what I have seen and studied, that time frame seems to be on the 12-18 month duration; ie, the major trends in the states tend to show up as the same trends in Costa Rica real estate, with a lag time of around 1 year. So how is the market doing in some of these real estate hotspots where buyers are coming to Nosara from? Lets take a Look:

New York City – New York city rents, and real estate prices are at all time highs once again, on a metric of both median prices and dollar per square foot. The prices seem to be driven by record low interest rates, but the interesting development in fact, is that the majority of bidding wars are being driven up by cash offers. Here is a recent story about condos in Willamsburg, one of the hottest real estate markets in the NYC area (Brooklyn). Three condos recently sold at record prices, in cash, without even hitting the market.

http://www.crainsnewyork.com/article/20130426/REAL_ESTATE/130429897

Denver, Colorado – Many of the buyers in Nosara are coming from the Denver and Colorado area. This is an area that offers similar active lifestyle choices, with outdoor activities and nature being a key theme.  The market in Denver is very healthy, with sales numbers up 46% and the average home price is up nearly 19% in the last year. Read about it here:

Denver Home Sales up 46% in March

Los Angeles, California – California was one of the hardest hit areas during the recession. It has taken a while for home prices to rebound as the huge inventory of foreclosures had kept a lid on prices. But this is what happens at a market bottom – it comes and goes and before you know it, there is a surge in prices as the majority of good homes are no longer on the market and inventory is scarce. Of all the real estate data I have read, this is the most intriguing and relevant to me:

LOS ANGELES REAL ESTATE PRICES ARE UP 50% IN JUST 6 MONTHS!!!!!

Yes, you read that right. Over 50% in just 6 months. Here is a chart of Median Prices:

Lastly, we can look at the Case-Schiller Home price Index:

Case-Shiller home prices rose +1.2% in February. The breadth of house price gains is impressive as this marks the second consecutive month that all 20 cities within the index increased sequentially. Compared to this time last year, home prices are up 9.4% and every city within the index is now in positive territory. Not surprisingly, those areas of the market that previously the most distressed are now posting the largest gains: Phoenix (+23.0%), Atlanta (+16.5%), Detroit (+15.2%), and Las Vegas (+17.6%).

All of this info paints a very similar picture; Homes prices are on the rise, with average prices up 9.3% in a year, and many major metropolitan areas that represent a large demographic of buyers in Nosara up between 20-50%. It doesn’t take a rocket scientist to know that these price increases will soon be seen in Nosara. Land and home prices have already rebounded, and are closing in on all time highs – while the number of transactions has also picked up. So what drives real estate prices in Nosara? What are the main influences on the market here? Simply put, the state of the real estate market in the places from which the buyers come to Nosara. And the state of those markets is more than healthy, they are thriving once again. If you have been thinking about a purchase in the Nosara area, now is the time. Please contact us for more information on property, real estate & luxury homes in Nosara, Costa Rica.

With U.S. markets beginning to turn around drastically, the Dow currently exceeding its prior peak from October of 2007, jobless claims recently hitting a 5 year average low, and the construction industry struggling to keep up with new demand, real estate markets are being rocketed back to life. In the aftermath of Hurricane Sandy in the northeastern United States we are seeing tremendous gains in house pricing and construction. In the northeast in particular, where a significant amount of American wealth is concentrated, working class Americans are being put back to work at an explosive pace. New construction starts in February alone rose 0.8% and building permits were up 4.6%. This is the highest level increase in almost five years!!! With the increase in employment there is also clear signs of increased spending among this group of consumers. Retail sales in February in the United States climbed 1.1 percent. Sure, this all sounds great for the economy in North America, but you’re probably wondering how on earth this relates to Nosara vacation rentals and overall real estate market in Costa Rica. Well, I’ll tell you how. With a serious influx of disposable income for a large amount of middle-class North Americans, we are going to see a serious influx of North American travelers ready to spend some of their hard earned cash on a Nosara vacation rental.

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Although not directly related to Real Estate – a question we are often asked by potential investors or clients looking for a home, is regarding technology when it comes to internet, telephones, and general connectivity in the area. This post is just a quick overview of what is available in the area. Nosara has come a long way with technology – Just a few years ago, the only company in all of Costa Rica was a single government monopoly – we know how that goes. With the advent of opened markets – Costa Rica is now replete with options for the tech savvy – or more importantly, those who are considering moving to Nosara, Costa Rica full time, who will need to be able to work remotely via Internet and telephone. Here is a full list of what is available for all of your technology needs. Continue reading →

Dave Liniger is a real estate legend, having changed the establishment in so many ways when he founded RE/MAX in the 1973. He has spent his life with his finger on the pulse of markets – its in his DNA. Here are his predictions for 2013. This is a great watch for buyers, sellers, investors, agents, and brokers.

http://www.youtube.com/watch?v=2Trbvc5-2nU

We have a great new property for sale located in the D section. The D section is the area that is  in between Playa Guiones and Playa Pelada. There is a sharp turn off into the D section from the main road, just after L’Aqua Viva Resort. This lot is just over 1100 square meters, or 1/4 acre. The property has a flat building pad at the top, and with a little bit of chopping and from the second floor, you can enjoy white water ocean views of Playa Guiones. At $129,000, this property is priced just over $100 per square meter, and is great price for anyone looking to build a home. A Modest 2 story, 1800 square foot home, with 3 Bedrooms, 2 Bathrooms, and a small pool can be built for $225,000.  That means, you can have an ocean view, brand new home for just over $350,000 – All in. Also, in addition to the building pad, there is a ton of nature and land to explore right in your new backyard. The landscaping is lush and has had years of planting . The neighbors include a few private homes and tasteful, tranquil B&B’s. Great opportunity for the right buyer. See the listing here.