A Great Time to Make Your Expat Exit to Costa Rica

It’s still a “buyer’s market” down here in my beloved Southern Zone of Costa Rica, but who knows how long that will last. We are seeing more and more people ready to make that expat exit to Costa Rica and away from life in the politically-charged rat-race up north. We like to call it the “Trump effect.” Like him or not, he is shaking things up and his name is often mentioned when we ask clients about motivation.

I noticed an article in the Tico Times this past week about the Costa Rican colon to U.S. dollar exchange rate recently reaching a 7-year high (of around 580 colones per dollar). That means dollars are going further in Costa Rica these days than ever before.

Now that doesn’t bode well for the economy of Costa Rica in general, as costs for local folks could eventually rise as a result. However, it can be a good thing for U.S. expats and vacationers looking to stretch the value of their dollars in Costa Rica.

How about for Costa Rica real estate prices? Well, prices are on the move, simply as the result of higher demand. Good deals are still out there, don’t get me wrong. Supply still is high, especially here in the southern zone. Just drive around an you will notice “for sale” or “se vende” signs on every other home or lot. It almost seems as if everything is for sale…and I guess for the right price, it is! But inventory levels in high demand spots, like the popular beach community of Ojochal, are thinning. I have noticed homes getting sold only to later reappear on the market at dramatically higher prices. If people start “flipping” properties in that manner, that’s a sure sign that prices are going up…and how! Especially in the southern zone, growth is underway and that will likely put upward pressure on prices.

In Costa Rica virtually all real estate, especially of the sort that appeals to expats, is priced in dollars. So the change in the colon to dollar exchange rate really won’t have an effect. The prices are going up due to increasing demand, pure and simple, and that trend is likely to continue as noted above.

However, it does effect most every other aspect of the expat’s existence. Many expats are living off their U.S. dollars, flowing down from pensions, retirement accounts, investments back home (like rental properties), or businesses that get paid in dollars. With the colon depreciating, or losing value, against the dollar, those funds will buy more in Costa Rica, again, pure and simple.

It’s called math. $1,000 dollars at an exchange rate of 550 will buy 550,000 worth of goods priced in local currency. If the exchange rate jumps to 580, then all a sudden your $1,000 will buy 580,000 worth of goods. Your dollars just gained an additional 30,000 colones worth of buying power. That will buy you quite a few extra Imperials!

The current outlook thus provides two compelling reasons to make your own expat exit to Costa Rica, now rather than later. First, property prices are rising and that trend is likely to accelerate due to the “Trump effect”, as well as property inventory depletion in high demand areas. Second, the price of living in Costa Rica, while not the cheapest of Latin American, is still comparatively good for those who learn how to live (and buy) like the locals. And if you’re relying on dollars to pay your day-to-day living expenses, the burgeoning value of those dollars can make things even better for you!

So, what are you waiting for? Now is perhaps the best time ever for that expat exit to Costa Rica.

And I am here to help!