Jeff Hickcox interview me for his book “REAL ESTATE INVESTING GUIDE COSTA RICA Fundamentals for Profit in Paradise”, and you can find that interview starting on page 187-189. I am including the interview below as I find it to be very informative especially now that the rental market here in Atenas is very hot and extremely competitive. Educating our clients is our number one goal at Pure Life Development. By providing quality information about the REAL ESTATE market in our area, as well as general information about living in Costa Rica, we hope to provide the highest level of customer service to you, our valued client! Jeff has a great website that has great information as well.
What are the merits of a buy-hold-rent investment strategy?
My whole career has been based on buy-hold-rent strategy. If you look at real estate investments as a whole over the long term, property values always increase. This is not to say that they cannot decrease, but buying smart is the key. When buying to hold and rent, you must consider the desirability of the property in question. Always research the market of the area you are thinking of investing in, and then go for it! With the right property, marketing, and good property managers in place, you only stand to gain on your investment. In the end, your tenants will have paid for your vacation or retirement home, and you can sit back and enjoy the Pura Vida.
What services does your firm offer to the homeowner?
Pure Life Development is a full-service real estate company, with a special emphasis on rentals and property management. We cover all aspects of property management including, but not limited to: employee management (maids, gardeners, maintenances workers), general maintenance and upkeep, tenant placement, marketing, a meet-and-greet for incoming tenants, specialized services for tenants during their stay, payment of property expenses, and general accounting for the property. Every property and owner is different, so we are always flexible to meet the needs of the individual owner or property.
Why is it important to have a qualified property management company?
Property managers are important anywhere, but it is especially important when you do not live within the country. It is virtually impossible to manage a business (and I see any investment as a business) from afar. To make the most of your investment, you need someone who will maintain your property in top condition, so that you will always get top dollar when renting or reselling. In addition, with the climate here in Costa Rica, a property can go from stunning to less than glamorous in a matter of months.
What are some of the major obstacles an investor must aware of when considering leasing out their investment?
As with all investments, you must be aware of the people who interact with your investment (property in this case), be it your property managers, workers, or tenants. There are always issues that arise, and you need competent managers who can address those issues efficiently and effectively.
What is the average cost for your services?
Our basic services run $150-$300 per month as a management fee, depending on the size of the property. In addition, we charge a 10% commission of rental income if the owner places the tenants, and 25% commission if we place the tenant. We always encourage our homeowners to be active in this process, however, that is not always possible.
In your professional experience, what is the average occupancy rate of rentals (full time, and vacation rentals)?
Naturally, the occupancy rates change due to market conditions and area. For example, vacation rentals in high season (which traditionally runs from December 15th until May 30th) have occupancy rates around 95%. Green season (June 1st until December 14th) occupancy rates can drop as low as 50%. If you have a good property manager who markets your property well, your green season rates can often be the same as high season. Long-term rentals are a different story altogether. Here in the Central Valley, many areas like Atenas, La Garita, Alajuela, and Grecia have a shortage of long-term rentals which make for higher demand. Currently, we have a 97% occupancy rate for homes that are rented for longer than one year.