BUY OR BUILD in Costa Rica? – Should I Buy an Existing House or Build My Dream Home?
Whether you buy an already built home or purchase a lot and build is entirely up to your personal circumstances and desires. Our goal is to give you all sides of the issue so you can make the best decision for you.
Having said that, the short answer to the age-old question of whether to buy a lot and build or buy an existing home is quite simple – If you can find an existing home that fits your needs and works with your budget than BUY IT! After all, the reason you are coming down to Costa Rica is to slide into the hassle-free lifestyle and enjoy your time in Pura Vida land.
Granted, if we were having this discussion 15-20 years ago there were very few built homes to choose from and single family lots were abundant so you would have most likely purchased a lot and built your dream pad in paradise.
Today the times have definitely changed. There are less lots available and there are more built homes to choose from. Although it may seem like inventory of available homes is at an all time low, there are always homes coming on the market and we have seen a large increase in builders investing their time and capital to build new homes that you can buy turnkey ‘Move In’ ready.
The obvious path of least resistance is if you find an existing home that fits your needs. Even if you need to do some updating or remodeling to bring it up to your standards it is still worth it versus going through the process of buying a lot, designing a house and having it built – all from thousands of miles away.
The alternative is to go through the entire process of purchasing a lot, finding the right architect, designing a house, interviewing builders, getting your building permit, controlling costs, shopping for materials and choosing finishes.
You must also be careful to buy a lot where the zoning allows you to build what and where you want. This is why it’s essential you find a qualified real estate agent to help you, so you can avoid hidden costs – but more on that later.
Breaking ground is further away than you think and you may have to manage the project from thousands of miles away. Make no mistake – you will have to be heavily involved in every step of the process and, to say the least, it is time consuming. If you want a more hands off approach then you must choose your architect and builder carefully as they will be handling the lions share of the decisions.
If you are risk averse, there’s an alternative way to have a new home built in Costa Rica that should meet 95% of your needs. Many savvy buyers opt to purchase a home that a developer is already building to sell. Single-family home developers will partner with a local real estate professional to build homes that are both appropriate for the lot they are built on, but also ensure that the house appeals to the average buyer looking for a second home in Costa Rica. You may pay a little more than what you would pay for a house if you bought the lot and built it yourself, but you are saving all the time and effort it takes to find an appropriate lot, go through the design process, find a builder and then finally have it built on time and on budget.
“Time is money” and your own time should be included in the mix. By buying a developer home you will have your home far more quickly and with a lot less stress. Sometimes it is worth it to let the developer take the risk and do all the work for you and you step into a beautiful, brand-new home with a full builder’s warranty.
You can also buy a developer house prior to the builder finishing it. This gives you the chance to customize the house to your needs and choose colors and finishes at the very least. You will also know the exact cost of the house when it is done but still have some say into the touch and feel of the house with your color choices. Keep in mind that any changes or additions to the original design will have a cost to you. Make sure you agree on any changes in writing.
If your plan is to use your home in Costa Rica as a vacation spot for you and your family and then rent it out for the rest of the year, buying an existing or newly built home from a builder will enable you to earn rental income almost immediately. The rental income can help offset at least a portion of the higher price you may pay for a finished home vs. a custom built home. Having worked hard for years so you can enjoy your Costa Rican hideaway – why reinvent the wheel? Sometimes simple is worth the extra up-front cost.
For those of you who enjoy having a custom home built for you or have the lifelong dream of building a home in the tropics then Costa Rica is one of the best places to have a stunning mansion built to your tastes.
Your first task will be to find the perfect lot. It is extremely helpful to have already chosen your builder prior to choosing your lot. There are many great builders in the Papagayo Area and that is another topic entirely. Ask your real estate professional to recommend a handful of builders and interview them to make sure they are a good fit for you. The reason why you want to have a builder at your side during the lot selection process is that they can tell you almost immediately whether or not the lot is adequate for the type and size of house you have in mind building. There is nothing worse than finding out the house you want to build will not fit on the lot or the site preparation is so cost prohibitive that makes it financially unfeasible to build.
A good seasoned realtor will be able to steer you towards lots that will work for the house you want to build and help you save time in the search process. Your realtor should have a close relationship with good builders that are willing to come and meet you and your realtor at the lot at a moment’s notice to discuss your plans and give you a professional opinion on the viability of the lot you are looking to purchase. This is an invaluable part of the process that can make or break a smooth building process and avoid many unseen pitfalls that can make save you much time and money in the future.
For this exercise let’s assume that since you are working with a seasoned realtor the basics have been covered. There is power, water and good roads to the lots you are looking to purchase and you have been made aware of the ownership structure and any applicable zoning and Home Owners Association rules and regulations (or lack thereof).
A couple important notes to those who want to build. First of all, it is very useful to use a builder who has an in-house architect and engineering team. This is especially important as most of your communications will be remote so having one contact to talk to for the entire project will save a lot of back and forth between the architect and builder. It is tempting to hire a separate architect and builder in Costa Rica as there are so many talented architects. If you have a considerable budget then you might feel more comfortable hiring an architectural firm that will guide you through the process. If your budget is not a big issue then go all in and lean on the best professional that Costa Rica has to offer and the process will be smooth.
The final note to those who want to build their custom home exactly how they want it. Make sure you design your dream home to your tastes and get what you want but don’t build such an eccentric house that nobody will buy it when you have at last decided to sell.
Of course, there is always someone who is willing to go off the beaten path and build something extraordinary. You know who you are and exist in a category all by yourself. Costa Rica is the perfect place to build the home of your dreams and is chock full of capable and creative architects and builders that won’t back down from any challenge.
So let’s recap:
-If you find an existing home or newly constructed home that fits your needs, Buy it.
-Don’t be afraid of remodeling or refreshing an older home.
-Buying an existing home or new build allows you to earn rental income immediately.
-Buying a new home from a developer during construction allows you to choose finishes and customize to a certain extent.
-If you want to build a custom home then involve your builder during the lot selection process.
-Choose a seasoned realtor to guide you through the process.
-You always have the option to go “all out” and build your dream palace. Costa Rica has a long list of very talented architects and top quality builders to choose from.
COME ON DOWN BABY!