living in Costa Rica has some amazing
benefits like the beautiful beaches the
warm sunshine the fresh food the
friendly people and of course the
monkeys but before you go and buy a
piece of property in Costa Rica there
are definitely things that you will want
to know in this video I'll break down
six things to know when buying a
property in Costa Rica as a foreigner
stick around until the end of the video
where I'll share an amazing hack that I
learned about recently hey what's up
Darren Burrows here my mission is to
help you reduce your real estate
investing education time from months to
minutes subscribe not to miss what's
coming I visited Costa Rica for the
first time about 10 years ago and it's
safe to say that I've been in love with
this country ever since I've traveled
here every year for the last 10 years
and this year I finally decided to
purchase a piece of land that I will be
developing buying property here is a
little different than back home in
Canada so here are the six things that
you should know when buying in Costa
Rica number six offer and due diligence
time making an offer in Costa Rica on a
property is similar to how we do it in
Canada except that real estate agents
here are not licensed therefore they
will put together the terms of the deal
but a lawyer will usually draft your
official offer a standard real estate
transaction here in Costa Rica lasts
about 45 days which is about half the
time that a transaction in Canada takes
so be prepared for the Titan timelines
you can ask for a longer closing but
anything over 60 days is usually
something that raises a few eyebrows
having said that when you're doing
something like buying land I wouldn't be
afraid to ask for what you want it's
really important to have enough time to
do your due diligence the good thing
about the due diligence time is that
it's generally longer here so for
instance on a 45-day closing you'll
usually have a 30-day due diligence
period remember you don't get 30 days
for due diligence and then another 45
days after that you close you get 30
days to do your due diligence at which
time your offer becomes firm and then 15
days after that you would need to be
prepared to close number five hire a
good lawyer because of the differences
in Costa Rican law versus how we
transact real estate in Canada I would
suggest hiring a good law firm with
extensive experience in real estate in
Costa Rica they have squatters rights
according to the Costa Rican law a
person can acquire rights to a property
if the property owner allows that person
to use or maintain possession of the
property for more than a year I recently
made an offer on a property that I
didn't end up purchasing and once the
lawyers took a look at the deed they
quickly told me to run away from that
property as it had many complications on
the title this saved me a huge headache
and potentially hundreds of thousands of
dollars as I wouldn't have been able to
do anything with that land if there's a
complication with the title or ownership
of the property you can't even get a
building permit number four the escrow
process I'm not sure why I was surprised
by this in retrospect but moving money
to Costa Rica is not so simple this
means that when you buy a piece of
property in Costa Rica there'll be a
lawyer that assists you but you will
also have to go through an escrow
company who acts as an intermediary for
the bank they will be the ones who will
verify all of your documents and submit
them to the bank so that you can wire
your money to close on your real estate
transaction in Canada we move our money
to our lawyers who hold that money and
trust and then they Advance the funds in
Costa Rica that all has to flow through
the banks so it adds a layer of
complexity the escrow company will ask
you to complete a know your client
document which tells them all about
where the funds you plan to use are
coming from these funds will need to be
able to be tracked and traced and in
some cases will need to have been
sitting in an account for 90 days for
instance if you're using money from the
proceeds of a recent sale you'll need to
produce the legal paperwork showing that
you sold the property the evidence of
that money entering your bank account
and then the history of those funds
since that time I don't know about you
but if I have money sitting in my
account I generally like to get it to
work for me so I move things around a
lot when it came time to purchase the
property here in Costa Rica that
definitely complicated matters so I had
to get my CPA involved to verify
everything and then write a letter that
needed to be notarized to complicate
matters even further some documents need
to be apostled which means that you need
to take them to your local consulate and
have them verify that the documents are
legit all of this to say that the moment
that you make an offer on a transaction
in Costa Rica start working on the
escrow process right away because it can
take some time number three legal fees
legal fees in Canada are calculated
based on the amount of time that the
lawyers put into the transaction a
standard real estate transaction in
Canada usually has about two thousand
dollars of legal fees in Costa Rica fees
are calculated as a percentage of the
transaction amount that percentage is
usually around four percent so on our
recent purchase we paid almost fifty
thousand dollars in legal fees now these
fees do cover the escrow process as well
but be prepared to work these into your
numbers and your budgets because it's
not the same as it is in Canada number
two water rights and building permits
this probably should have been number
one because it's the most important part
when it comes to buying land in Costa
Rica but not everyone is going to be
buying land and building some of you are
going to be buying an existing piece of
property so this one won't be relevant
but if you're buying land and plan to
build on it you need to understand the
water situation we take this for granted
in Canada because fresh water in the
infrastructure around that is usually
not something that we consider but here
in Costa Rica fresh water is a problem
so before you purchase a property make
sure that you can get a water letter you
cannot get a building permit here
without a water ladder and the water
ladder will tell you how much capacity
you have on your property even if you're
planning to just build a single family
dwelling on a piece of land don't assume
that that property has capacity for
water in some cases you may be required
to pay to have a water line installed
which could take months or even years to
get approved and then installed the
water authorities here in Costa Rica
have a tremendous amount of power so get
to know the process and and fully
understand what the potential timelines
can look like if things go well or if
they don't go well pardon the pun and
the number one thing you should know
before buying property in Costa Rica is
you can't Finance your properties here
as a foreigner in Canada we use the bank
to finance the majority of our property
purchases on a standard rental we as the
buyers come up with a 20 down payment
and the bank will kick in the remaining
80 percent that will be mortgaged while
it's not impossible to get financing in
Costa Rica it's not very common so
expect to pay for your properties in
cash as promised I wanted to share a
hack that I discovered recently as a
foreigner if you invest a minimum of 150
000 US Dollars into real estate in Costa
Rica you can apply for temporary
residency having temporary residency can
be a huge benefit as it allows you to
stay in the country longer you get
certain Privileges and you can open a
bank account and use the banking system
here now before you get too excited
about using the banking system here in
Costa Rica understand that it's very
different than in Canada while you can
get financing if you are a resident
interest rates here are significantly
higher they are almost the same as what
we would pay to have a private lender
Finance something in Canada so in most
cases it doesn't make sense to use the
bank's money most investors here either
pay cash or they will use a home equity
line of credit to purchase something if
you have questions about buying property
in Costa Rica feel free to leave those
in the comments section below for any
information about my various courses and
trainings you can check out my website
at darrenboros.com you can also follow
me on Facebook and Instagram where I
post regularly thanks so much for
watching and I'll see you on Tuesday