Build or don’t build? Question for RE pros.

Home Forums Costa Rica Living Forum Build or don’t build? Question for RE pros.

Viewing 15 posts - 1 through 15 (of 15 total)
  • Author
  • #188459

    This question is for the real estate people out there or others in a related field. I own a lot in a gated community just 6km. south of Jaco in Playa Hermosa.

    The community is done gated, paver roads, electric, water and I have a title. The lot is approximately 5200M2 and all level, there are also no deed/community restrictions. So I am looking for some ideas, my plan was to build a small house that would later perhaps be a guest home of about 500square feet inside with a nice covered patio. The idea was to create what would be a very well finished “hotel suite”, think

    Things have changed and I got engaged and will most likely be buying a home here in the NYC area, hence the budget just got real tight! I know someone who has been building/assembling prefabs and I could get a small one up for about $15,000(approx. 500sqft.).

    In your opinion does this help increase the value of my land by having a small tastefully furnished “casita” on it with beautiful landscaping. Or would this detract in someway from the value, that in the event I want to sell most buyers would not be interested in a small house of this nature and I would have wasted $15k+.

    This casita would not limit a buyer from building just about any size home/s they want later as the land is large enough and all buildable.

    I would love to build now as costs seem to be rising quite quickly, and quite frankly I have been living in rather small apartments in NYC for quite awhile and would never need a home over 1000sqft. in Costa Rica.

    Also if the sh** hits the fan in the US we would be very comfortable living in our little casita in costa rica. The other plan was to have a builder/friend who is terrific, build a Xandari type “villa” small but unique design and high quality finishes for about $35-$40k more than twice what I could pay for a small “Tico” style home.

    See I was going to put the whole thing on hold, but I could afford the prefab with out much worry, I’m just being very conservative as I’m a RE broker in NYC. Our market is still very strong, but a around us things are really falling apart so who knows what will happen to my income?

    So build the Casita now or just wait…that is the question? What makes better investment sense?


    I am in a similar situation regards building my house now or later. I posed the same question; build now to avoid increasing costs or invest the money in stocks till I am ready to move to CR? It all boils down to taking action on a whole lot of unknowns.

    Will the real estate melt down be bad enough really damage the U.S. economy and so drag the stock market down as we all fall into a major recession? If so, building costs, even in CR, might not rise so very much since demand would decrease substantially. It’s a wash in that scenario.

    Or, if the recession is a mild one or maybe doesn’t even happen, stocks may do well but will they keep up with a quickly rising building cost?

    When we talk about money and investment, we are really talking about how much personal risk we can tolerate. At a high level of risk, you might grow the investment rapidly. At the low end, you may just want to protect what you have. And then you have to consider your life situation as well, immediate needs, future needs…a lot to think about and most of us are in the dark as to what will happen next. Ain’t life grand?


    My question is more geared toward is this small type “casita” a worth while build from an added value to the land point. Those are the opinions I’m looking for from the pro’s on the ground there.


    Lotus, I don’t know if you think like me, but every time I came to Costa Rica, I bought many little things, decoration, pots and plates, flowers, beach chairs many things that I had to give away when I left, only because I had nowhere to store it, and I did not want to leave it to my friends as a burden. I just couldn’t wait to have my own place.

    I think the idea of this prefab house, which could be a guardian house afterwards is great. The thing you have to think about is a land with a house is a little more expensive for maintenance, needs a onsite guardian, but since it is in a gated community, maybe you won’t need one.

    I have seen guardian houses much smaller than a 500 sq feet one. It is just my guess, but your investment will not be lost at the worst….you might even give a better value to your land.
    Good Luck


    Who will be taking care of your new casita while you’re up in NYC making money to keep your new honey happy? Once you construct your new casita, it will become the target of every thief in the area and will be stripped of everything including the walls, if they are truly lightweight design, unless you have it guarded day and night by a reliable person. In the beach communities there are not too many reliable people to select from. In other words, with your new casita you will be creating a liability that will cost you as much to maintain and protect as a big new home.
    Invest your money where it will stay put and best increase the value of your lot and won’t cost you two monthly salaries for casita guards. That’s right, two guards, because one can’t work 24 hours per day, 31 days per month.
    Invest in your infrastructure that won’t be stolen or need to be guarded.
    Take the same $10 to $15K and have a professional who understands site planning advise you as to where the best place will be to construct the future main residence and then invest in concrete installations such as septic and water tanks, retaining and security walls, driveway, etc. Then when you do allocate the necessary funds to construct your dream home, you will save yourself at least the amount of money you invested in the infrastructure installations that improved your lot plus a great deal of time during your new homes construction.
    In addition, if you decide to marry that honey in NYC, your plans change and selling the CR lot makes more sense, it will be worth more with solid infrastructure installations versus a pre-fab eyesore that only a person who can’t afford your lot would consider living in.


    Thanks for that advice,Chromebuilder. I also worried about thieves and vandals and , while I currently employ a reliable local man to care for the property, adding a house would entail further expense for upkeep. And I am not crazy about building a house just so someone else can live there to keep it safe.

    Starting infrastructure is a great idea. I have an extensive servidumbre to gravel and a lot of plantings to do as well. I hadn’t thought of installing a septic system yet but that make absolute perfect sense. What about bringing the electricity and water closer to the site from the road at this time. I don’t know yet if I will need a transformer. (about 70 meters away). I wonder if electricity would be stolen?

    As a local professional. do you have a sense of how much construction costs MIGHT increase over the next several years?


    Crdreambreaker,Lol! I guess you answered my question very directly when you say “eyesore”. I don’t want to build something that will decrease the value of the property. Yes I have thought of getting some of the infrastructure done from landscaping the general lot to septic. This is in a gated community and I am hoping that helps with the security. I just don’t want to believe it is as bad as you say though. We have a number of friends with second homes in the Playa Hermosa area and although there is theft from time to time, it’s not the horror stories of disassembling the house brick by brick so to speak. CR, how about building a little casita village on the property, small “cabana” like spaces around lush tropical gardens and a nice pool? Sell them off at $85k each maybe build 10? CR or Scott…partner?


    Cabinas in a residential subdivision off the beach would be nice for the owner and friends but knowing how to compete with and many other commercial businesses is a full time job for someone. I can’t speak for Scott but I know I do not have the skills to get involved in the hospitality industry.


    This would be to sell each little cabana, not run a hotel. Wonder if there is a market for this product?


    Lotus. In my initial reply were my suggestions about installing subterranean concrete improvements that would not create liability for you versus your possible pre-fab casita construction as the guesthouse for your main residence. We’re jumping around here or as some might say,” throwing ideas around.” Sorry to be the CR dreambreaker, but I quite dreaming a long time ago and my recommendation to all real estate investors has always been be realistic and leave your dreams on your pillow at home. Which is why I will further offer the reality of building costs in CR. You mentioned that your friend could build you a Xandari type “villa” small but unique design and high quality finishes for about $35-$40k, more than twice what you would pay for a small Tico house. If my math is correct that would mean that you believe someone will build you a Tico house for $17.50 to $20.00 per m2. That’s about what it will cost to provide and transport the building materials to Playa Hermosa. Additionally, if you’re expecting to have a builder complete this work for you, he or she will need to be compensated for their work in addition to the above figures.

    For quite sometime, I have read your wise and realistic postings concerning finance and political subjects. I hope by sharing these construction costs with you it will help you to understand the realities of your CR building dreams.

    Additionally, I’m sorry if I jumped to the business commercialization of your concept for investors to build 10 casitas on your 5200m2 lot in your gated community. I assumed since you were a RE broker in NYC that you would have understood that the concept of exploiting your 5200m2 lot into 10 parcels, that could be re-sold for a profit, would be highly improbable. I guess I’m the one who needs to be seeking your recommendation on this subject. Do you know of a method to legally subdivide your lot so the 10 units could be sold and legally transferred to new owners?


    Let’s keep this in perspective regarding the “casitas” I am just tossing out an idea, I really don’t know what the hell I’m talking about. lol. The property as you know is not sub dividable into 10 lots. I was wondering if there was a way to build out a condominium plan with individual little cabana’s(300-400sqft.). Basically the same idea as a condo “building” but as I said separate little homes but the same idea of ownership as a condo. Just was throwing that out there, as this is just the vague idea of someone sitting/musing at there keyboard perhaps dreaming a bit to much…If this were possible the next question would be is there a market for a small “cabana” that one could live in while on vacation here in CR or on an extended stay here. Lets say you could sell such a product for under $90k, have a nice common pool, rancho gardens etc..I have always been interested in small/alternative home design Ala DWELL magazine and the like, and CR is a great place for it because who want’s to be indoors for to long? We have comfortably lived in a 400 sqft apt in Hermosa, most of the time we are laying in the hammock on the little covered patio. I think xandari is a good basic model regarding home size(although they are more like 600sqft), villa spacing, gardens etc…just take it down a few notches so to speak. Regarding the $15k Tico style place, that was for a 45M2 prefab from one of the companies I think you listed once. Yeah they are butt ugly but easy to build, the plans are already done and approved and with my flare for decorating I could make that little concrete bunker shine a bit? CR does that price sound in line with what you know about prefabs and the cost to build such a structure, it would all be open. I honestly don’t know? I really believe where there is a will there’s a way. I bought 10 acres up in the northern Catskills in the mid 80’s, I was 24 or something, handy but never did more than put up a tree fort. Although told I was crazy, I got plans approved(drawn on graph paper) for a seasonal home(loop hole=less bureaucracy) and built a cozy 400 sqft one room cabin with a nice deck. I did everything except bring the electric to the house and the wiring, and it’s still there!! The hardest part was sinking the holes with a single person gas powered auger, no one told me about “rocks”. Also the first time I framed all the walls I left feeling job well done..not! I did not brace them and the high winds of late fall blew them mothers all down, scattering them like toothpicks on the mountain! I have a few other funny stories as well, I would have hated to see you show up to inspect it!lol..But hey it worked was cheap to build and provided many cozy seasons. I guess the point of this rant is when it comes to a shelter, one size does not fit all, I must add I have been called “eccentric” regarding my housing choices as I also considered living in a tee-pee and have built a yurt. I considered both for Costa Rica but based on the theft issue they literally could steal the whole house! Not really funny. The hardest part of all this to accept is security issue, that you can not have a second home there unless you have someone living in it or next to it full time. What ever I do wind up building It will have just the bare minimum regarding furnishings etc..I also enjoy all your posts Tom as they are extremely thorough and I have learned quite a bit, I respect all your ideas and am paying attention.


    Fascinating posts –

    Lotus / Sprite

    Since you guys put up with me I will offer some advice from my years of experience here – cuz I like you guys and Scott – I know its Xmas time and all but don’t get mushy on me.

    Re: CR builder:

    I love his input here. Lotta good stuff well written and sensible.

    Here is my take on care takers: If you have a lot of things to be stolen then you need one – who may end up stealing them from you or masterminding the theft.

    So what is the key – don’t have a lot of things to be stolen.

    Every situation is site specific. If the casita is in an area with neighbors and you have a contact person or have made friends with the neighbors, then a caretaker that you pay $300 a month to guard a $200 television and a $100 boom box is hardly worth it.

    Care taker cost: Lets say $4000 a year with all the trimmings. You can buy a lot of boom boxes and TVs for 4K a year. I came to these conclusions years ago when my car stereos would “disappear” once every couple of years. My Tico neighbor said – “you need a night time care taker!” Well the cost for replacing the window and stereo is about $125 and over 6 years I have suffered about $1,000 in losses due to thievery.

    Math: 6 X $4K = $24K – for what – to guard $1,000 worth of electronic equipment and car stereos.

    No way – let them have it.

    I could replace all my stuff 24 TIMES for the price of a caretaker for 6 years!

    Then there is all the employee baggage that you have to endure…

    My point is people get emotionally affected from a sense of being violated (a feeling that they choose for themselves (Byron Katie / Loving What Is – highly recommended). So instead of the need to stop the criminals – Let them have their pilfering and chalk it up to living expenses. It’s better than trying to beat them at their own game (beating them at their own game is being caught in a superiority trap).

    The thing is to not have a lot of “stuff” to steal. Also you can build-in your furniture into the wall or build platforms for bedding out of block and cement and then all you need is a foam mattress.

    I have had a cabina in Manuel Antonio for years and it has been vandalized once and I lost paint and tools valued at $150.

    So I am not saying that CR builders advice is not sound – it is and the cost of the additions that he suggest will only go higher in the future so they are sound investments. But they are also fixed investments in the sense that hardscape such as driveways etc are useful for your building plan and maybe not for a potential buyers plan.

    So I would stick to amenities that can be used for anybody’s home building vision – like bringing water and electric to the lot, fencing, landscape etc.

    To sum it up – you need to consider the intrinsic value of the investment – you cannot sleep in your hardscape or nearby electric and landscaping – but you can sleep in your cabina. The money you save on hotel rooms can pay for the cabina. It has for me in Manuel Antonio.

    Build it sensibly with an eye on anchoring “stealables” and solid masonry furniture and I doubt you will have too much problems with thievery. If you are that worried about it, I don’t let it upset me anymore. I factor it in as a living in CR expense. Charity.

    Keep your electronics investment reasonable and build in a small safe room/area with a vent and light bulb if you must keep valuables there.

    I think having a cabina that you can use and that friends can use is valuable and when it comes to building – if you are the owner/builder you better dam well be on site or be prepared to pay higher building costs. So your cabina serves you well here too.

    I think people get to wrapped up in “guarding.” My cabina has served me well and if I had to do it again I would build it – do it the same way.

    Cheers – The good (/boring) Diego


    Perhaps I have found my country, cause I don’t have much “stuff”. I don’t quite fit in here in NYC,maybe I will be more at home in Costa Rica.


    DON’T BUILD!!!
    While yes construction costs are going up, they are not rising as much as land has in the last 10 years. You already have the most important piece of the puzzle which is the land and it is also likely to increase in value so if your plans change or you find another spot or whatever, it is much, much easier to sell a piece of vacant land than it is to sell a house. And why would you want to risk having your house burglarized and also having to maintain a home you will hardly ever use. Wait until you are ready to move here and than build after you have rented for 6 months to see if you like it.
    Building costs will not increase as much as you think. Costa Rica’s economy is tied very closely to our economy and while they are not experiencing the pain we are in the housing industry, it is just a matter of time. I think its funny how so many people love to pump up the housing and real estate industry in Costa Rica as if its only going to keep going up and up. Hmmm, thats what every body thought in the USA until last year. Also while I know alot of sellers made a lot of money selling real estate in Costa Rica, its really tough to judge the condition of the market without having statistical data such as amount of homes on market, days on market until sold, amount sold for, etc. etc. This data will not become available to us until the country adapts an MLS system that everyone uses and until than its a mystery.
    As for me, I have a house on a farm in Bijugua that my father in law manages for me for $200 a month. He lives a small house on the property and takes care of the livestock and horses and I come to CR 4 times a year and even with him watching the property and living 100 feet away, I have still been burglarized once. If I did not have inlaws in CR I would never ever own a house unless I lived in a guarded and gated residential community or condo. Good Luck in your decision.



    Good feedback and I think I will wait a year, we have lived in the country months at a time. The lot is in a gated community, but we will eventually build even brfore moving permanently.

Viewing 15 posts - 1 through 15 (of 15 total)
  • You must be logged in to reply to this topic.