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Thanks for the updated building costs information. I wanted to mention to your site members, that the rise in building costs should not discourage people from building in Costa Rica. Even with the cost increases, building in CR is still very reasonable as far as costs go in the building game. In addition, values in CR are going to skyrocket far beyond belief in a few years from now.
For those who think real estate prices and construction costs are high now, wait…”you ain’t seen nothin yet”.
There are many ways to save money building in CR. Many professionals, including contractors in CR, want to squeeze as much money out of people building in CR as they can. By following a few simple rules you can avoid paying outrageous fees, for both goods and services.
Building a house is usually not a big deal. In CR though, it is a big deal. Very big deal. Why? It generates huge amounts of money for the economy and most of all the professionals in CR.
For example, a neighbour close to me paid $22,000 for architect’s work. An additional $2,000 per inspection, because her architect is from San Jose, he has to travel for the inspection. She finished the house about a year ago and since then she has had an American handyman, repairing the mistakes. The house has turned into a money pit. The architect and contractor abandoned the project at the final payment.
My house is similar to hers. My architect fees were $4500. To much for my liking, but that’s the way it is in CR. My inspection costs were $100. per inspection. Not one problem with the house. The architect I hired, inspected every week and my neighbour’s architect inspected… well no one really knows when.
If you are building in Costa Rica, as a foreigner, you can avoid all the outrageous fees, the scams, the construction mistakes and all the other quirks of building in CR, by using the right people.
Seek out someone that can manage or administer your project in your best interest! This person should not be associated with any realtor, lawyer, architect, engineer or anyone one else. Their sole concern should be representing your interests in CR.
Find this person long before you seek out any of the professionals. Start with them from the beginning. It will save you a bundle of money, time and aggravation.
I am sure Scott, the CRhomebuilder or others on this forum, can direct you to the right people. Take their advise as they have been there and done that.
Tip: Always have the property that you are interested in buying in CR, surveyed before you buy it …Always!
In agreement whole heartedly! It is amazing how many property owners can’t produce a Plano or even let you survey at your own costs before puting down any money.
As far as construction, I am a commercial specialty subcontractor owner and an architect. Starting with the right agreements/contracts tied to time periods and performance or they don’t get paid is very beneficial. It is a simple concept to sell, you do your job when you say you get paid, if not we have a probleme and I will hire someone else. Also have termination clauses that limit their payment to the % complete + a max. OH&P margin. 22 years in business and I have been on both sides of contracts so I tend to favor the fairest such as the AIA or AGC.vbcruiser,
I already have 12000 sq mtrs where I will build one day. It is not a gated community, rather a property between farms. I would not be able to use full time any house I build for another 4 years. So I am waiting because leaving an unattended house for that long would be inviting problems and the cost of maintaining an abandoned house might be prohibitive. I need to assess the situation. I wonder if building now and paying maintenance costs for 4 more years is more economical than waiting.
I estimated a few years ago that building costs might rise 20% per year. I have stock in a Mexican cement company so I read a lot about that business. I also process customs clearances for imported material for cement manufactures so I see the import commerical invoices. I guess I was off by 10%. This is disturbing. If the trend continues, and I see no reason it won’t, by the time I am ready to build, the cost for building a house will have doubled.
What information do you have that indicates property values are going to be skyrocketing? Are you referring to land values or house construction costs or both?
I am sitting here in Miami watching the real estate melt down. I know it is a different situation in CR, but by how much?Edited on May 25, 2008 13:31
Sprite, the sheer number of baby boomers-to-be in the U.S. and Canada who want to retire away from cold weather should keep the upward pressure on real estate in Costa Rica in effect for years to come. I think vbcruiser is right. You ain’t seen nothin’ yet.
That said, you might think about building now or soon and renting the house ’til you’re ready to occupy it yourself. Lots of those baby boomers are looking for familiar-feeling accommodations while they try Costa Rica on for size.
Sprite: Most of the foreigners building in our area are part-timers. They hire property managers and pay lots of $$$ to maintain the property. Taking care of property, even a small property in CR is just about a full time job. If you have the money now and can build with cash, I say build now and have a person or family house sit. Build your house so it is just about damage proof.
A few of the older rental houses around here are built like that. No upper cabinets, concrete furniture, well that’s a whole different topic. Any way the idea is to build it so that the least amount of damage will be done to it.
There are many families that you could work out an agreement with to house sit for you. This way you will get in when prices are still reasonable and your property will continue to increase in value.
Like I mentioned, this is if you have cash.
Remember 1981 when interest went to 18%+. Prices dropped drastically and people bailed. The USA is having a rough time now, but you can bet it will turn around as it did in the late 80s. Even though not much is selling right now, all across CR they are continuing to build, because investors know CR is going to boom. This early stage is just a sign of what is about to come.
I am no investment or real estate guru, but from my real estate experiences, I have learned that the market goes up and down and since 1981 anyway, the up and down fluctuation hasn’t missed a beat.
Folks such as yourself, that want to live away from the crowds are now buying in areas such as San Ramon, Naranjo and so on. A few years back, gringos weren’t looking at the types of properties they are looking at now. Foreigners are buying where property is cheaper, away form the beaches. They are moving in!
The Flamingo Marina $91 million, hotels in the millions are being built. Huge houses, some mansions are being built, shacks are being built, foreigners are even sticking shipping containers on lots to live in, in Costa Rica. They’re building a McDonalds in Naranjo. CIMA is building a hospital in Liberia. A huge complex across from the Liberia airport is just being finished, huge! All kinds of big money projects are taking place right now, even though the USA has slowed in some markets.
All this is going on because investors and developers are making CR very attractive for foreigners and the government of CR is going right along with them. For these reasons and many more reasons, I see the value of both land and constructed properties going out of sight and out of reach for many folks who dream of living in paradise.
The Gringos are coming, Sprite and lots of them. As sad as it is, this beautiful little country is being flatten by development, which will continue for decades. Prices won’t be going down, material and labour won’t be going down. The new property valuation in CR will be here soon, the new income tax system is coming, your property taxes will increase dramatically, water is going up, electricity costs increasing, roads are being paved, Ticos are learning english, lots of them, all preparing for the influx of foreigners.
Mark my words Sprite. When the USA turns around the gringos are going to hit Costa Rica like a title wave.
Hope this helps and don’t worry about the 30%. Use the right people, build the right way and you will save far more than the 30%, which I am sure only applies to some products, not the overall costs.
Tip: Buy when no is buying, sell when no one is selling!
vbcruiser, I am a long time member of this site…and you probably see me making coments from time to time. I dearly want to be in Costa Rica. I am reciently divorc sed…she got the gold mine ( well over a Million dollars/ and I got the shaft. I know Scott O. personally and would offer my 30 years of perfect business in the real estate business in Austin and San Antonio,
Texas will all necessary documations for my creditability.. I have spent the money frm my divorce to buy investment properties and do not have the necessary cash to “buy” my way into the country. I am 59 to be 60 in July…I will have more than enough income from social security and my income from rental properties to live in C.R. in 2 years. But for now I would offer my assistance to be an on site person for your building and a tenant to guard your home until you can get to C.R. I know this is a bold move but I am not happy in the U.S. it is 99 degrees in San Antonio today with a heat index of 104 and summer is not yet here. Please let me know. I can give you excellent credentials. I have been on the Board of Directors for the Austin Board of Directors, an owner of a top Century 21 office in the country and a City Councilman in Universal City Texas
thanks so much
Terry cook
thanks
Terry Cook from TexasDear vbcruiser,
Thanks for your insight into building in CR and soon. I have my lot in Atenas already bought, and have nearly made a deal with a builder. I am, however, interested in having an inspector oversee the project for me. Tom of CRbuilders indicated he lives too far away to make his services economical, so I wonder if you can suggest anyone to me. And do you agree that it is better to build and hold now, instead of waiting four more years when I can move in permanently? (The lot is in a gated community.)
TicobellThanks so much for the opinion, VBCRUISER. Your reasoning appears sound.
A year ago, I decided to wait to build believing the cash would be better applied to my stock portfolio. I am now reconsidering that decision and have to balance what I believe might happen in the world stock market with what I know WILL happen with CR building costs.
In 2006 and 2007, a 20% increase in construction costs plus the added expense of care-taking a house (which is something I still have to investigate further), made it more sensible to remain 100% invested in stocks. I made 31% on my stock portfolio last year. This year, I’ll be lucky to top 10%.
The other consideration for me is keeping diversified. If I look at my CR property as only part of an investment strategy, that property already represents too large a portion of my portfolio. The plan was to go another four years when, at that point, the CR property would be well proportioned to the stock values. But who can predict with any accuracy what the equities market will do?
I believe your assessment, as well as other opinions I have read in agreement with you, is correct regarding the future of Costa Rican real estate. There still remains the common problem that many in my situation have; how to build confidently while not present for the process? Also, I need to determine the cost of maintaining an empty house. I also have to find out if renting is viable since my site is not within a town. It is A 20 minute drive from San Ramon and 10 minutes from Palmares.
ticobell: Sorry I do not know anyone that could inspect your project in that area. Yes, building sooner than later will put you ahead of the game. The cost of building in CR isn’t going down, only up. I predict that once the current over stocked condo market in Guanacaste anyway, is sold out, our building costs, in this area, will be more than the USA or Canada in the next four years. Good luck with your project.
terrycook: I do not require anyone at my property, I was replying to another post made by Sprite. I was suggesting a house sitter.
POSTED IN THE WRONG PLACE AND REPOSTED HERE BY SCOTT
CR building costs up 30% areca 11:32 AM May 27,2008
** HI, We built a prefab concrete and steel home on our . . . areca 11:32 AM May 27,2008message Posted By
Posted May 27,2008 11:32 AM areca
HI,We built a prefab concrete and steel home on our farm a year ago. We are nearing completion of our second prefab, a customed designed home for our personal home and have built a nursery facilty using the prefab concept and columns. We are starting several others homes soon at our farm and doing the foundation prep work now.
In the last year or so, the cost of steel and concrete have nearly doubled. We mined our own sand and rock out of the river this time because there was none available to buy near Turrialba. Other basic building supplies were also difficult to find and we collected them in San Jose after an extensive search.
Our architect is on site all day everyday. His disounts on materials is far more than ours and the savings to us has paid for his fee both as contractor and architect. I can not imagine the results if he were not on the job site.
We love the prefab concrete and that they can be custom designed just like any other custom designed home.
Because of the rising construction materials cost, with no end in sight, we are moving forward with our plans. It will not get any cheaper than it is today.
O.K. Building costs are up.
Up from what – to what?
Can anyone tell us what is the cost of building a house in the Central Valley (for instance)excluding architect fees, permits, connections etc? Obviously the answer will depend on whether we’re talking about a medium quality or a high quality structure. But let’s find out what the costs really are now that everything has gone up 30%.In the last two point five years, building costs in the Central Valley (near San Ramon) have gone up from $28 a sq foot (quoted to me in September 2005 when I started construction) to $60+ a square foot this summer. My house was completed in October 2006 at a cost of roughly $38 per square foot. Cement went up 40% in the last 6 months. Block is up, so is ribar. $60 per sq ft will get you a well built house. Finishes are extra.
maravilla, does your estimate include architect fees and permits?
What do you mean by “finishes are extra?”
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