Tuesday 27 September 2022

Can You Afford a Vacation Home in Guanacaste?

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24 September 2022 - At The Banks - BCCR

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The profile of a real estate buyer usually is a foreigner with high investment ability. But… Could the average Costa Rican or Guanacastecan own a home in paradise? Real estate expert Randall Zamora tackles the question. Photo by Danilo Brenes
The profile of a real estate buyer usually is a foreigner with high investment ability. But… Could the average Costa Rican or Guanacastecan own a home in paradise? Real estate expert Randall Zamora tackles the question. Photo by Danilo Brenes

(Q COSTA RICA, by Randall Zamora Hidalgo, Vozdeguanacaste) Many of us have dreamed of being able to say, “I have property in Guanacaste.” But dreams have caveats.

For this article, I conducted a brief analysis of the average prices on 288 homes for sale in Tamarindo in the classifieds section of specialty website Encuentra 24. The result: To buy a home in this area, you should have enough in your wallet for about US$2,000 per square meter.

In Playas del Coco, with 211 properties, an average square meter costs about US$1,564. Both prices have remained relatively unchanged in 2016, according to the analysis of the website.

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Other famous beaches in the Nicoya canton average about US$1,800 in Nosara (with 123 homes available) and US$2,000 in Sámara (with 119 homes).

Now, the big question: Can we buy properties in this area? To respond, we should analyze existing credit conditions as well as our ability to pay, given that not many people have their own resources to opt for an already built second home at the province’s most sought-after beaches.

Let’s look at an example. If the property you are looking at has 50 square meters (540 square feet) of construction, its value would increase to about US$100,000 (ȼ54.7 million) at several beaches. If it’s a 75 m2 (800 sqft) home, the value is described in the chart.

You probably already have a mortgage loan on your first home and other debt from credit cards or vehicles. If you do, remember that your maximum debt level should be 35 percent of your net income.

A quick calculation by a factor of three shows that your net income should be greater than ȼ3.1 million or US$5,640.

If you go by the classification used by La Nación’s State Program on the payment ability of Costa Ricans, people who have this type of income usually are large or medium business owners, executives, professionals or department heads with at least a university degree.

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How many Guanacastecans meet these conditions? The National Household Survey shows that not even an average of households in the fifth quintile (the most wealthy) manage to earn an equivalent amount. It’s probably a very low percentage of the population that has incomes of this level (the average is approximately ¢2 million).

This article doesn’t aim to dash anyone’s dreams. There are other options that could allow us to enjoy a second home in Guanacaste, such as properties for sale by banks. In most cases, the discounts offered on these properties increases our purchasing power, considering also that in some cases banks offer better credit conditions.

This article originally appeared on Vozdeguanacaste.com and is republished here with permission.

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"Rico" is the crazy mind behind the Q media websites, a series of online magazines where everything is Q! In these times of new normal, stay at home. Stay safe. Stay healthy.

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