New York Times Article About Real Estate in Dominical, Costa Rica

Photo

Moshen and Julie Sadeghi own an 8,000-square-foot Spanish colonial and Mediterranean-style estate with a guest house and private theater on a plateau overlooking the bay in Dominical, Costa Rica. Credit Julie Sadeghi

DOMINICAL, Costa Rica — On the two-lane road running along the jungle-covered coastline, it is easy to miss the steep turnoff for this tiny town, a rocky unpaved road leading to a row of open-air restaurants, hostels and surf shops.

For years, property industry observers predicted that Dominical would be the next boomtown in Costa Rica, after the coastal highway was paved four years ago, connecting the area to the north. But it hasn’t happened.

A few small condominium developments peek out of the lush jungle canopy on the steep hillside, but there has been little of the mass development found on other parts of the coast. The electricity still goes out regularly and most of the restaurants do not require shoes.

Big waves remain Dominical’s primary attraction, drawing surfers from around the world.

“It really hasn’t changed that much,” said Moshen Sadeghi, a resident of Minneapolis, who first started coming here 16 years ago with his wife, Julie. “It’s a surfing town. Kids come here when they have money to spend. They just want to surf.”

The Sadeghis’ driveway is a bumpy, winding three-quarter-mile trail up a steep hillside, best accessible by a vehicle with four-wheel drive. Their home, finished in 2010, is a sprawling 8,000-square-foot Spanish colonial and Mediterranean-style estate with a guest house and private theater on a plateau overlooking the Dominical bay. The surrounding jungle is home to howler monkeys, three-toed sloth and loud toucans.

Before the coast highway was paved, visitors to the Dominical area needed to take a long and often treacherous mountain route from San José, the capital of Costa Rica. Or they would need a four-wheel-drive vehicle to follow the rocky road from Quepos, 45 miles to the north, a journey that could include fording several rivers, depending on the time of year.

“It would take one and a half hours to get here from Quepos, it was so bad,” Mr. Sadeghi said.

Home prices in Dominical soared from 2003 to 2007 in anticipation of the road’s completion and as the building of an international airport nearby was discussed. Several developers announced projects, touting the region’s rugged coastline and secluded beaches.

With interest growing, a two-bedroom villa with a pool close to the ocean sold for approximately $450,000 in 2007, compared with $275,000 in 2005, agents say. (Costa Rica properties are typically listed in dollars.)

But the market stalled in 2008, in the wake of the economic turmoil in the United States. The majority of international buyers in Dominical are Americans, who mostly disappeared after the crisis.

When the paved road opened from Quepos in 2010, after years of delays, it had little effect on the market. “Bad timing,” said Joshua Kanter, an agent with Properties in Costa Rica, a real estate agency. In 2010, “you could make an offer for 30 percent off and get it.”

Today the half-finished shells of projects started in the boom years can be spotted on the hillsides. But sales are picking up, agents say.

“The fire sales are not as numerous now,” said Dave West, co-owner of the Re/Max real estate franchise in Dominical. They sold more property in 2014 than in any of his previous 10 years, closing five deals, compared with two in 2013.

Prices are still depressed but are returning to precrisis levels, Mr. West said. Buildable lots for single homes are also popular, with land prices still about 40 percent below peak levels, he said.

“The people buying lots are 30 to 40 years old,” he said. “They’re reserving their spot for 15 years from now.”

Several small developments are under construction, including the first units in Playa Hermosa Villas, a development planned to include 26 villas and 12 condos, a few miles south of Dominical.

“I’m all in right now,” said Robert Ruggieri, the developer of Playa Hermosa Villas. He said Dominical was “going to go from a little surfer town to a mini-Guanacaste,” referring to the fast-growing region on Costa Rica’s northwest, where Four Seasons and Marriott hotels anchor luxury developments.

Mr. Ruggieri bought nine acres for the project on the coastal highway in 2009 for $700,000, which he estimates was about 50 percent below the price three years earlier, at the height of the market. Prices in his project start at $339,000 for a 1,389-square-foot villa and range to $419,000 for a three-bedroom, two-and-a-half bathroom unit with a two-car garage.

Dominical is starting to attract more upscale travelers, beyond the surfers and ecotourists, Mr. Ruggieri said. He has forsaken the Mediterranean style popular in the area for stark modernistic units, with large windows, chrome accents and square edges.

“I took a gamble,” he said. “I think the new contingent is going modern.”

Some local residents are skeptical that Dominical will ever see a wave of mass development. The mountainous coastline makes it difficult to build. And there is little land available along the narrow beachfront, where development is restricted by the government.

“There is only so much that can be built,” said Julie Stewart, a real estate agent based in Austin, Texas.

Last April, Ms. Stewart and her husband, Jeff Windham, bought a house outside Dominical on a four-acre lot, a short drive from the coast. They paid $350,000 for the 2,000-square-foot house with three bedrooms and an infinity pool, after embracing the “relaxed feel” of the area.

“We loved the fact that it didn’t have all the resorts,” Ms. Stewart said.

She would like to see a few more restaurants and small hotels in the area. And it would be nice to see continued improvements in the power grid. But she’s not eager to see the large development found in many Central America beach spots.

“If this stays nice and small and doesn’t have any huge resorts coming in, it would be great,” Ms. Stewart said.

International Real Estate Listings – My Podcast Interview

Joshua Kanter Discusses Real Estate in Dominical Costa Rica

by Taylor White

The IREL Podcast by Taylor White > Dominical Costa Rica real estate > Joshua Kanter Discusses Real Estate in Dominical Costa Rica

Joshua Kanter Discusses Real Estate in Dominical Costa Rica

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I had the pleasure to sit down and speak with Joshua Kanter from Properties in Costa Rica in Dominical Costa Rica – and we will get down and dirty with the Dominical real estate scene – and have you coming away wanting to investigate it’s local property market further – or, cross it off your short list entirely and continue listening.

Right now from Josh you will learn:

  • Why he passed on the more well known expat communities of Jaco and Tamarindo – and why he believes you could do the same.
  • What constitutes properties located inside the Maritime zone – and then how those are different than fee simple titled properties.
  • Where the heck Dominical is even located on a map of Costa Rica – and what lies all around it.
  • The exact types of properties Josh is recommending today – and explains what “suitcase ready” means and how you can profit.
  • Breaks down strategies to get money together to buy Dominical real estate – and shares data on what percentage of buyers pay with cold hard cash.

Josh’s contact details:Joshua Kanter Discusses Real Estate in Dominical Costa Rica

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Concession vs. Titled Property

Many people looking for property in Costa Rica want a beach front home only steps from the sand and waves.  However, these types of properties are almost always concession with very few exceptions.  Concession properties are those within the first 200 meters form the median high tide mark.  Fee Simple Titled properties are all those outside of the 200 meter Maritime Zone.

Concession Property: The Zona Maritimo Terrestre (ZMT) or the Maritime Zone is 95% of all beachfront property in Costa Rica.  There are a few exceptions of properties that were titled before this law was put into effect in 1977.  The Maritime Zone consists of the 200 meters from the median high tide mark; with the first 50 meters being designated as public land for public use.  The next 150 meters of land can be possessed through a granted concession; which is basically a lease that is typically 20 years and can be renewed.  Concession also differs from Fee Simple Title in that a foreigner can only own up to 49% of the concession.  A local resident must own the other 51%.  However, if a foreigner has been a resident for 5 years or more, then they can be majority or 100% owner.

The type of structure allowed on a concession property can vary from tourism hotel and restaurant to private residence.  All permits and permissions must be obtained from the local municipality; which will approve any and all construction plans.

Titled Home and PropertyTitled Property: Fee Simple Titled property is the same as in the U.S. and has the same absolute rights for foreigners and Costa Rican nationals alike.  As owner of this type of property you have the right to own it, use it, enjoy it, lease it, and transform the property in line with Costa Rica laws (for example cannot clear cut the rain forest to build your home).  Fee Simple property can be any property outside of the aforementioned Maritime Zone.

All title properties, as well as concession properties, will have a ‘Plano’ or plot map and are registered in the ‘Registro Nacional’ or National Public Registry.   This is public information and can be accessed online at: http://www.rnpdigital.com/index.htm

Marcharmo

The “Marcharmo” is the annual minimum liability insurance you are required to pay for all vehicles, motorcycles, or ATVs in Costa Rica.  You can pay the Marcharmo from November 1st to December 31st each year and the value is based on the make, model, and year of your vehicle.

Marchamo

The Marcharmo is not cheap and for a 2008 SUV I will pay around $800 this year, ouch!  Even an older car, motorcycle, or ATV can pay around $200.  This is a requirement and no way around it.  In fact anyone caught after January 1st without the new decal on their front windshield will be subject to hefty fines and even getting your car impounded and towed.  Best believe the “Traficos” / “Transitos” or Transit Police will be out in full force around the entire country stopping cars at various check point searching for current Marcharmo stickers.

Transito Check Point

You can pay your Marcharmo online, at any local bank, or insurance office.   You can check how much you owe for Marcharmo and pay for it on the INS website.  In order to pay your Marcharmo you have to have all traffic tickets and parking tickets paid and if not; they will be added to the total cost of your Marcharmo.  You also have to have a current Revision Technica Vehiculo (R.T.V.) inspection sticker, which is the annual inspection every car, motorcycle, and ATV must pass to prove it is worthy of the road.

So pay your Marcharmo on time, or else your New Year will not start out too well!

Paradise Pic of the Week

This picture of a beautiful end to the day in Lagunas, Dominical was taken from our back porch.  If you have not seen a sunset in person on the Pacific coast of Costa Rica, then you are missing out!

#paradise pic of the week - #sunsetCheck out our Dominical Property Facebook page and “Like Us” for more updates and Paradise Pics of the Week!!

“Alguinaldo” – Christmas Bonus

Tis’ the season for “Alguinaldo” or Christmas Bonuses in Costa Rica.  Every December this mandatory payment for full time employees is due and many count on this for their holiday season expenses.

Santa Claus in Costa Rica

Often called the 13th month of salary, the “Alguinaldo” is equal to one month’s average pay.  The easiest way to calculate your employee’s “Alguinaldo” is to take their weekly salary and multiply by 4.3; since on average there are 4.3 work weeks in each month.  Or you can add up all their annual pay and divide it by 12 to get the 1 month average.

These Christmas Bonuses could not come at a batter time because December is the most expensive month in Costa Rica with car and motorcycle “Marcharmos” (annual fee for vehicles), taxes due December 15th, plus holiday festivities and gifts.

So make sure you pay your employee’s “Alguinaldo” on time because their family is surely depending on it for the holidays.