About Construction in Costa Rica

About Construction in Costa Rica

I think that most of my clients come to me intending, or wanting, to buy an existing house.
The vast majority of my clients end up buying raw land with the view of building on it.

How does this happen?

Well, I think that it helps to understand that we are EARLY in the cycle of development and growth here in Costa Rica’s southern zone.

Looking back over the last few years here in real estate, I think that it is notable that I have personally been involved in very few sales of developed land, this is to say, land that has a building on it. Nearly all of my business has been on raw land. Large farms to later be subdivided, or lots in an existing development, these are what has been the stock and trade of my business here.

This is a key point in understanding investments in real estate in the southern zone of Costa Rica. It seems that in real estate we (“we” being us land buyers) feel like we’re late and that we’ve missed the deals and so we’ve got to settle for less. We’re early here people! How long ago were we at this stage of the cycle in say, Boston, or Manhattan? Do you expect to be shown some raw, never been built on land when you walk into a real estate office in those or other cosmopolitan areas? I think not. Well not only is it common here, but its essentially the nature of the business here. So, a quick study of history and how these cycles work would indicate that we are heading into the part of the cycle that, for the purpose of this article, we will call the “construction” phase. This leads us nicely into the question:

How does one go about building a house in Costa Rica?
Well, if you have a real estate agent that is worth his salt, he should be available to help with this sort of post-sale support. Yours truly is just such a real estate agent here in Costa Rica. I figure that if you want to go to the trouble to travel all the way down here, to this foreign land, and buy a piece of property from me, I’ll be there for you with some of the follow up concerns that go along with this sort of an acquisition.

The First Step:
Your real estate agent should have a line on some general contractors in the area. Since here in Costa Rica we are going into this part of the development phase, there is an awful lot of movement: new companies popping up, reputations on the part of some individual contractors being established, (and dashed in some cases). There aren’t too many builders that have a long history down here with a satisfied following. So the first step is to get some recommended contractors that you can interview. The interview is an important step since you are going to be working closely with whomever you choose over the course of the project, which will likely take between 12 and 18 months. And there are going to be some trying times in the project. I don’t think this point is unique to Costa Rica. I think that building a house is a daunting task no matter where it is done. But I gotta say, it is particularly daunting here in Costa Rica for a number of factors that I may or may not mention later on in this article. In any case, your selection of your General Contractor is the single most important decision in the process. Interview three contractors, and if nothing clicks, interview another three. Talk to lots of people. Drive around the hills near your property and talk with the folks at any construction sites that you might find. Get some recommendations this way as well.

The handling of this first step is going to set the stage for how the project goes, all the way through. I am involved in a project now that is being stymied with the installation of windows due to the window holes, which were put in a long time ago by the first contractor who had to be fired and sued, the openings are not square. Had he been any good, we wouldn’t be having these, and various other problems now.

Should you be here for the whole project? Yes.
What if you can’t? Well, do the best you can. Lets talk.

This situation obviously comes up as often as not. Not everyone can take the time off from life to live in Costa Rica for the twelve to eighteen months that such a project requires, just so they can oversee their project. So, a number of the contractors are sensitive to the needs of the home owner and their desire to have a customized home that experiences some modifications along the way from the original plans. Since it may be that the owner decides to build in absentia, there are some unique needs that the contractor should seek to satisfy. Communication is foremost. You want to know how the project is going, really. This can be achieved through photos and videos and regular conversation.

The contract should be as specific as it can be. When there is a deviation from the contract, for instance with regards to time projections or costs, it will serve both the homeowner and the builder well to stop and talk, and document the changes necessary to accommodate the new situation. If the “stop, talk, and doc” (a little saying I just made up) procedure is followed from the start, a lot of problems can be avoided.

Costa Rica is a land of friendly people. Frankly, so is the US, but it’s a nice way to start this sentence to make this point. Costa Rica is a land of friendly people. We get enamored by the place. The scenery is paradisaical (that is to say, paradise-like), there is wildlife running, flying, and swimming all around us here, and the people here are more than happy to assist us in our efforts to share in it. In other words, to move here, or to visit regularly. So in this friendly setting, we can relax the need for good clear documentation because, hey, don’t you trust the guy? Yes you do, but you want to document it anyway. Good neighbors build tall fences, good buds document all business agreements.

Building a house in Costa Rica is a complicated endeavor. Take the necessary time to choose a good project overseer that you can communicate well with. Make sure to read the contract and take the time to get it right. Make it detailed. Put in time terms of when certain benchmarks can reasonably be reached. Have provisions for if those benchmarks aren’t hit.

Follow good business practices in your efforts to build a house here in Costa Rica, and one day you’ll really be able to call this amazing place home.