For property buyers on a budget, Costa Rica has a lot to offer. The question is, which part of your tropical property dreams are you willing to compromise on to save on your purchase? Is it the view? Is it the state of the home? Are you willing to put in a lot of work? To deal with construction noise and mess?
Whether you choose the buy a fixxer-upper or build from scratch, in our opinion, the main question to ask yourself when it concerns saving on your Costa Rica home buying purchase is: are you purchasing a property that has the potential to increase in value in the future?
And when it comes to the question of buying a lot and building for yourself, or buying an older home that needs some work, which option can save the buyer more money? The simplest answer is: it depends.
Things to think about when building a home in Costa Rica
There are some properties that in our years of experience in Costa Rican real estate, have not appreciated in value. One of these types of property types is the jungle view property. As beautiful as they can be– and some people truly fall in love with being enveloped by lush jungle– most buyers who come to Costa Rica flat-out want the ocean or mountain view. The feeling of being amid so much life is most present here when you can see the blankets of green and blue stretched out before you for hundreds of miles.
As a team of agents, we are finding that our clients are more educated when they arrive in our office these days. They have visited the many, varied expat message boards on the internet and they have learned that an average construction cost that home builders can expect is $100/sqft for a standard expat-quality home in our region of Costa Rica. But because most people come here wanting to build their dream home, they are often enticed by the high quality materials that are much more easy to obtain these days, meaning that a lot of our lot buyers end up going over the standard costs. They see something they love and compromise on their budget– a few too many times.
For those seeking our expert Costa Rica real estate advice: if you are going to go over budget in construction costs, be sure that the lot you purchase has a discerning quality that other buyers will also be seeking out in the future.
It is important to acknowledge that the turnover of property owners in Costa Rica is fairly high. Although we haven’t been able to pin point a statistic to prove this, there is plenty of anecdotal evidence that can be found in conversation, both on and offline. This is not a reflection of any one reason in particular, but rather a symptom of the natural evolution of human lives. One primary reason we do see is that family dynamics change quickly and grandchildren are a huge calling for people to return back “home”.
As a result, in today’s market, buying used and updating is a great idea. Modernizing/personalizing means that you can more easily budget your spending, in that you already have the bones of your home ready and you can pick away at jobs over time, whereas when you have a new project, you are always thinking to do things right the first time around.
Our expert advice for the second-hand home buyer
Depending on what price you purchase a home for, if you update, you might very well be able to resell in the future for more than what you put into the remodel.
For one recent example, a listing we sold in early 2018 for around $300k is ripe for a remodel of around $50-80k, featuring: a new kitchen, new bathroom fixtures, reparations of the pool area, painting the walls, new light fixtures and updating the furniture. With these changes, our office would be confident to list this home near the $500k mark, largely because of the incredible ocean view on this property and the high demand for contemporary/modern homes around 3-4 bedrooms in a good area– and this property ticks all of those boxes.
Only about 5% of projects are related to renovations for local architects, say Carlos and Silvia Mendoza, who have been working in this area since 2010, with projects around Ojochal and Tres Rios.
” A renovation needs you to check first what has been built, the quality of the materials, and tests for the mechanic systems or electrical if needed. We have to make adjustments according to the existing construction. The project always depends on the clients particular situation, sometimes they don ´ t want to go through a construction process because of time or because it may represent a stressing process.”
For those who would rather renovate than construct, Carlos advises that instead of checking the age of the house, “it is important to make an inspection that lets us know the real condition of the house. There is usually a solution for everything (almost everything) as long as the client is aware of what might be needed to do it, and the costs.”
When it comes to cost, the biggest difference between building new and renovating is related to construction.
” When you have a renovation, you pay to take off the existing materials and then put in the new materials, so it is more expensive (paying double for labor).”.
But when it comes to architectural costs, “the only difference is that we have to redraw the existing areas and then work on the design,” and Carlos says that the costs are relatively the same.
The most typical renovation projects? “Standard quality finishes being changes for luxurious ones,” says Carlos.
” The easiest renovations to do involve using metal structure. It is very versatile, fast to build, you can mix it even with concrete and it allows you to easily make changes in the future, you just want to make sure to use the right width and quality.
Last piece of advice? “Always keep in mind the particular conditions of humidity and weather in our area in order to make the right selection of resisting materials.”.
Thanks for the interview, Carlos!