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Have been reading a lot of postings in response to Scott’s “Perfect Storm” article. Everyone wants out of the stock market. Many want to go offshore and buy gold and silver. My question is, with CR properties and land, and especially the Central Valley area, appreciating at the rate is has been appreciating, why are not more expats buying up land in their IRA’s and 401(k)’s as well as non-qualified plan investing ?
Why?
Most people will take the easy route for anything… They’ll spend hours evaluating the purchase of a refrigerator and then some smooth talking “closer” in Florida making a 10% sales commission will telephone them and persuade them to buy land in Costa Rica without ever seeing it … Duh!
It’s a great combination! Neither the salesman nor the customer has actually been to Costa Rica but they’re buying and selling the land there… Ha!
Arranging your financial affairs in a sensible fashion takes a serious commitment in both time and energy and that certainly includes the mass of paperwork associated with buying real estate in your IRA or 401K.
For me having a second home is not just ‘diversifying’ my real estate investments, it’s also a “lifeboat” for me and my family should the sh.. really hit the fan. Owning a self-sufficient home on land in a rural area near a river, where we could raise rabbits, grow some food is a sort of survival insurance policy for us and with an elevation of 6,600 feet above sea level, we’ll feel the affects of climate change but the seas are going to have to rise a lot before our feet actually get wet.
I am – unfortunately – of the opinion that we will see some truly catastrophic events in the next 25 years, with HUNDREDS OF MILLIONS of people dying, the likes of which we have never seen before (where IRAs and Keoghs probably won’t mean damn) on this planet and we owe it to ourselves and the ones we love to think about ‘survival’ both physically and financially.
Scott Oliver – Founder
WeLoveCostaRica.comPrevious improper planing on their part, won’t constitute and emergency on your part – ehh Scott. Well-put post.
It truly is sad what people do to themselves but during the first few years of this site, I wrote numerous articles warning people about the dangers of buying first, then visiting Costa Rica and doing research second.
You can tell a child that it’s dangerous to put his hands in the fire but if he insists on putting his hand in the fire then …
Scott Oliver – Founder
WeLoveCostaRica.comScott,
I agree with your assessment that a coming world catastrophe will cripple all societies. Coincidentally, I also bought some land in the Central Valley by a river and a stream with enough acreage to plant a decent garden. I also have several waterfalls and the basics in place for a hook up of a small hydro power plant. Like the stock market, nobody knows when disaster will happen. All the components are in place for a major environmental problem so I have put in place a few components of my own. However, I do not live day by day thinking of this. I don’t believe it is likely to happen for a couple of decades more at least. I amy not even be around…but I certainly expect my son and wife to be around.I came down to Costa Rica last year and only looked at 8 properties all in the same area before settling on the one I purchased. I am not one of those americans who needs to spend 6 months to a year living in CR before deciding on a property or to know whether or not I can thrive in CR. I had a set of criteria in my mind before buying and I know who I am and what my limitations are after 57 years and also I know the latin rural culture quite well. (Puerto Rico and Cuba) When I found the property that met all those conditions, I bought it.
How many others are thinking like I do is an unknown. But each time I visit Costa Rica, I am impressed by the numbers of north americans that I see everywhere in the San Ramon area. It sure seems like a lot of people are buying properties there.
I agree – sight unseen would be crazy. However, if you have seen the land or rental unit and have evaluated it as a good buy, then I would think the potential return on appreciation alone would outperform the 10 – 11 % average return of an S&P fund, over the long haul, without the downside. Seems buy and hold for a few years would make sense. Also should remain fairly liquid compared to an 86% dump on the market 1999 – 2002) where you would not want to take cash out for, most likely, several years, unitl the market recovered and your share value increased. This wouild also assume you would be buying your own place to live in CR.
Also, about $4000 and 45 days to set up a Qualified Plan to a self-directed IRA that will allow real estate purchases in CR.
I just spent 6 weeks in San Ramon and I, too, am shocked — more like horrified — at how many gringos have invaded that area in such a short period of time. The few I’ve met who recently arrived won’t last 6 months (thankfully) if they don’t jettison their narrow gringo attitude and start living Pura Vida! I also have enough land to be self-sufficient. Have already planted 20 fruit trees, including bananas and plantains, and 40 coffee trees (for my next project), and my kitchen garden plot is already to be planted when I got back in two months. Between what I can grow and what I can get from my neighbors (milk, eggs, cheese) I could survive in the campo without a supermarket if the worst case scenario happened.
CD – could you share a little more information on your last sentence? I would like to know more about the “Qualified Plan”. If you could explain more – or at least direct me down the right avenue to get more information…..many thanks.
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