www.CostaRicaTicas.com

Hi guys,

I know there are a few people on this board that own and rent out properties in Costa Rica. I wanted to know if you manage them yourself or do you hire a property management firm? I have a relative interested in expanding into Latin American real estate (He already owns properties in South Africa, France, and the U.S.) and he wanted me to check out the scene in Costa Rica, Colombia, and Panama.

Also, if you guys were also property owners/managers in the U.S. how does it compare?

I have a property management company handle all my rentals, grounds and pool maintenance, housekeeping responsibilities, etc. To date, I have been extremely happy with their performance.

Each of my condo's has an escrow account, for all rental funds to be placed. The management company deposits all rental income, then deducts for water, electric, cable, condo fees, repairs, etc. Then, every 3 or 4 months, I'll have them cut me a check from my escrow account(s), and I'll deposit that money into my local CR bank account. Overall, pretty simple.

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You ALWAYS have an option ....... "NEXT" !!!

Thanks. That is precisely the answer I was looking for!

Counte,
Remember... YMMV! I feel lucky to have gotten a semi-trustworthy property mgmt company. But don't rest on your laurels. Do your homework, and LOTS of it. Hire an attorney to oversee your other attorney. Talk to people about their experience(s). It's your money, so make damn sure that you are comfortable with the people that are handling it.

Buena Suerte!

MG

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You ALWAYS have an option ....... "NEXT" !!!

MG
Are there any tax issues with the local government for collecting rent on your properties. Or does your CR corpoation deal with paying taxes on monies?
Zeus

Each of my units has it's own Sociedad Anonima. My attorney takes care of any/all legal issues. I'd rather not comment on taxes, monies - income / revenue earned, banking, tax shelters, etc. Bottom line is that everyone wants a piece of you. Know the rules and proceed with caution. But always keep in mind - there's more than one way to skin a cat!

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You ALWAYS have an option ....... "NEXT" !!!

MG,
Thanks for the response, Just like in the States everyone has their hand out, looking to Butt Phuck you if you don't cover your ass! My experience with trying to do business in CR is that everyone lies like a Mo Fo and its very hard to trust anyone.
Piece Out!
Zeus

Perhaps the strongest suggestion is don't let your tenants know the property is owned by a gringo unles you only rent to gringos.

Although evictions for non payment of rent are very hard in CR, they are nearly impossible if it's a gringo landlord and Tica tenant with Ch*ldren. For this reason, Tico landlords are reluctant to rent to chicas with Ch*ldren, except in the Pavas type areas. I have heard of situations where the Tica has not paid rent for more than 4 months before the owner was able to get her out. In the Pavas type areas I hear evictions are much quicker and more brutal.

On the other hand, Gringos should know that each lease agreement in CR is for 3 years even if you told the landlord you plan to move in 6 months. Therefore, don't expect to ever get your deposit back. It matters not whether you deliver the place back exceptionally clean or trashed, most of the landlords will keep your deposit.

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Slut Puppy in Training

Is low self esteem a prerequisite for being a good Ho or is it a result? ;-)

How does the company charge you, by percentage?

Yes. They deposit all monies (gross fees) from rental tenants into the escrow account, then deduct $100 per month condo fees (per unit), plus all fees for utilities, housekeeping, groundskeeper(s), mgmt fees. It's all done on a spreadsheet type program (similar to Quickbooks). All monthly statements get emailed to me.

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You ALWAYS have an option ....... "NEXT" !!!

Lenny makes some very good points. I even had a rental agent refuse to show me an apartment when he learned I had a live in non-gringo girlfriend. Deposit refunds are about as likely as a unicorn siting. When renting an aprtment with deposit add it to your annual amount and divide by 12 to get your real rate.

If you rent apartments furnished and are an absentee landlord, there is a high likelihood your tenants will get robbed (of your stuff, not theirs). The rental returns here vs cost to buy does not make it a very attractive proposition (In central valley, I can not speak to the beach areas)

BKTUNA
I am never going home

We have a few rentals and management manage them ourselves. They are all middle-class homes in Tico areas. Our investment strategy was to purchase 3 bedroom, 2 bath homes with a garage, within 5 miles of downtown and near bus stops.

Perhaps we are renting them too low. For example, we just rented a three bedroom, two bath, two car (carport) for 190,000 colones, roughly 385.00 USD. These are not upscale Gringo type houses; these are typical row houses in very typical Costa Rican neighborhoods.

I calculated the rent based on .09 percent per month (which I believe is low-standard in the U.S.) of the current estimated value of the house. Most of the tenants are very stable and pay on time. They typically stay four or five years. When there is a vacancy we put an ad in La Nacion and it is rented the day the ad comes out. Then the phone rings about 20 to 30 times a day with inquiries about the listing. Four days after the ad comes out, the inquiries taper off to about four a day. With all the interest, it makes me think the rent we charge is too low or there is a serious shortage of rental houses in the San Jose area. Perhaps we have under estimated the current value of the homes. We also use the standard annual legal increase of 15 percent per year.

For those of you who rent properties:

- How do you estimate what to charge for rent?

- How do you handle the deposit?

- Do you require first and last months rent up-front?

- Do you charge a cleaning and damage deposit or do you simply build it in to the rent?

- If you do charge a cleaning and damage deposit, do you find that renters try to use the deposit as the last months rent?

- If you charge a cleaning and damage deposit, how do you calculate the amount?

We have found that people leave water and electrical bills outstanding and then we have to chase them down to get them to pay the bill. If anyone out there has had this problem, I would be interested to know how to resolve it.

When I used to rent, me being a Tico the deposit i supposed to take care of bills and some minor damage or depretiation the property had suffered.

When renting

Only Deposit and first month up front. deposit is usually aquivalent to the first month amount ( like paying first and last)

Everything else is pretty much coverd by the deposit.

It's been a long time since I don't rent though.

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Tico and Panama, let me know if you need any help down here.
Panamaexplorers.com

That's 1.08% annual which is in line with the popular 1% minimum (values under 100k) formula in the U.S.. Based on all the activity when your ads come out sounds like you could increase your rents some, especially if your properties are above average condition. The simplest barometer to establish your rents is look what other similar properties in the area rent for and of course what people are willing to pay. Also, are you saying you increase rents on existing tenants 15%/year?

One gringo told me he paid 20% management fees to handle his CR beach properties, I'm assuming this high rate only applies to beach properties due to the high turnover of short term tenants. Anyone know if this is the average rate for quality property management in CR and if it would be closer to the U.S. average price of 10% elsewhere, like around SJO?

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Living well is the best revenge
http://www.youtube.com/watch?v=MwUtj_YnNoY

This is common in Costa Rica when you have the contract in colones. If it is in dollars you are only allowed to raise the rent 5% each year.