Finding an investment home in Costa Rica can be daunting: there is no multiple listing service and no house numbers. You must rely on local contacts to find suitable properties. Country’s dirt roads that stretch for miles between beach towns can offer an adventurous ride to travellers not in the possession of 4×4. The payoff, however, is a luxurious beachfront experience in one of the world’s most eco-friendly, natural, and welcoming countries.
The Equity Residences team had done their due diligence before landing in Liberia Airport and knew which areas of the Guanacaste Province and the price range they were seeking. The team had done its homework on the communities they needed to preview, capitalization rates, cash flows, occupancy rates, as well as the best real estate agents to show them around. The team spent a week hunting for a new home in the Guanacaste Province for the Equity Platinum Fund.
The Guanacaste Province: a multifaceted affair
Costa Rica is known for its beaches, nature, and people (some reports place it as the happiest country in the world!); a 2017 Equity Residences Investor Survey had placed Costa Rica as a preferred location for investors, which sparked the team’s interest in finding an investment home in the area.
Guanacaste Province offers two sides of the Costa Rica experience: luxury resorts located in the Papagayo Peninsula, and vibrant local beach towns. This qualifies the province for two very different types of vacationing: you can enjoy the high-end luxury experience of a Four Seasons, golf courses and all, or go back to an authentic local experience in the beaches of Potrero, Tamarindo, and Playas del Coco.
Liberia Airport (the province’s airport) is well connected to both coasts of the United States, which means that Equity Residences investors can be connected to their new home via a direct flight. This allows them to spend less time traveling, and more time experiencing the renowned natural wonders such as the Arenal Volcano and the Cocos Island.
Finding the home
Greg Salley, Equity Residences Managing Director, points out that although the Papagayo Peninsula offers a luxurious gated community with many amenities, it was not exactly what they were looking to add to their inventory of properties.
While in the peninsula, the team viewed houses starting at $1.8 million with great potential. However, the Equity Platinum Fund already owns properties in similar communities such as Cap Cana, Dominican Republic, and Mauna Lani, Hawaii. Also, properties available for sale in Papagayo did not have direct beach access, which was a requirement for a new Fund home in Costa Rica. The search would continue elsewhere.
Greg continued his search with a local realtor in quiet beach towns of Potrero and Tamarindo. In Potrero, Greg found a beachfront house under construction; it is steps away from a beach and only walking distance from restaurants and hotels. The team was also attracted to the fact that, unlike properties in gated communities, this home was located in a local town that would help Equity Residences investors get a full Costa Rica experience. To top it all, a new marina under construction nearby promises to increase property values in the area.
The house was being constructed by a Canadian woman who had lived in the tropical country for years. She had set up a successful business there, Greg noticed her eye for luxury and the quality of design in the two adjacent properties that she has also designed (she occupies one of them). Equity Residences highlights that finishing touches and attention to detail are important to look for when choosing a property.
Construction was finished in four months, the product of which was a spectacular beachfront home, full of luxury and incredible views. The Equity Residences team highlights several factors that pushed them to close the deal: beach access, incredible architecture, construction quality, and deeded land. This last point is important in Costa Rica; beachfront properties are mostly owned by the government, getting one that offers a deed and not a lease provides peace of mind to investors. This all came at a competitive price and appreciation potential.
Safe passage needed
The team’s adventure was not without its danger. Greg narrates the perils of finding their way through the Monkey Trail: an infamous dirt road, known for “eating cars.” Their 4×4 rental felt like it was about to tear in half, and Greg was constantly blinded by flying dust from other cars.
Gladly, the newly acquired house is an hour away from the airport, and there’s no need for monkey shenanigans.