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COSTA RICA |
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How
Not to Ripped Off in Costa Rica
By Christopher Howard M.A.
“Is it safe to invest in Costa Rica?” This
is one of the most frequent questions I get
asked by the guests on my monthly
retirement/relocation tours. During my
nearly 30 years of living in Costa Rica I
have had the opportunity to observe a lot of
people make money and other lose it. I have
also bought and sold a lot of property here
and have currently have some sizeable money
invested in property.
Consequently, I have a good idea of what it
takes to invest safely here and have seen
many common denominators in cases where
people have “lost their shirts” through poor
investments, especially in real estate. The
whole process basically boils down to
perception and common sense. It is easy to
over pay for something in Costa Rica if you
haven’t done your homework.
Because there is corruption, bribery in
Costa Rica and most people have heard or
read about the horror stories, most English
speakers assume that if someone speaks
English they are trustworthy.
This is the BIGGEST mistake you can make.
Just because someone speaks good English or
is from the States, Canada or Europe does
not make the individual a good person. Some
people here will take advantage of naive
newcomers.
As I state in the fifteenth edition of my
perennial bestseller “The
New Golden Door to Retirement and Living in
Costa Rica,” “One ‘dangerous breed
of animal’ you may encounter are a few
foreigners between 30 and 60 years of age
who are in business but do not have
pensions. Most are struggling to survive and
have to really hustle to make a living in
Costa Rica.
Since they have no fixed income like a
retiree they are desperate and will go to
almost any means to make money including
overcharging you. Notice I use the word
overcharge. They may even have a legitimate
business but most certainly try to take
advantage of you to make a few extra
dollars. Some of these people may own
hotels, have tourism-related businesses, own
restaurants or pass themselves off as local
experts. Almost all of these characters have
very convincing websites extolling their
expertise and knowledge of the country. Most
complaints we hear concerning people being
“ripped off” are caused by individuals who
fit this description.”
Here is an example.
About four years ago while conducting one of
my retirement tours near Domincal I met a
portly North American who called himself
Gringo Mel (not his real name but similar).
He owned a hotel at the time and billed
himself as the best cook in Costa Rica among
other things. I should have known that
anyone who was so full of himself had to be
a conman. Anyway he told me he waned show me
some property that he was selling because
the owner was out of the country. We went
there and I fell in love with the place.
It had an incredible ocean view and a couple
of building lots. I told him I was
interested and to find out the price of the
land and home on it. He told me was $165,000
dollars. A few months passed and the
property and home had not sold. On my next
trip to Dominical I mentioned to a friend
who lives and works in the area that I was
interested in said property. She told me she
had talked with the owner and the real price
was around $120 dollars. This meant our
friend Gringo Mel was charging a $45,000
dollars commission as the middleman or 30
percent for his services. Needless to say, I
never purchased the property but almost got
taken to the cleaners by a fellow gringo.
On your first trip to Costa Rica you will
probably be besieged by con- artists anxious
to help you make an investment. Be wary of
blue ribbon business deals that seem too
good to be true, or any other get-rich-quick
schemes i.e. non-existent land, fantastic
sounding real estate projects, phony
high-interest bank investments or property
not belonging to the person selling it. If
potential profit sounds too good to be true,
it probably is.
There seems to be something about the
ambience here that causes one to trust total
strangers.
The secret is to be cautious without being
afraid to invest. Before jumping into what
seems to be a once-in-a-lifetime investment
opportunity, ask yourself this question:
Would I make the same investment in my
hometown? A friend and long-time resident
here always says jokingly when referring to
the business logic of foreigners who come to
Costa Rica: “When they step off the plane
they seem to go brain-dead.”
Here is more advice from my bestseller.
“One should be extremely cautious when
dealing with foreigners who consider
themselves experts in Costa Rica. Just
because a person was a professional in his
home country or has gone through the process
of moving here does NOT qualify him to be an
expert here. Some foreigners consider
themselves experts just because they have
lived here for a short time. Remember,
anyone can build a website and say anything
about themselves.”
We know people who move here, and go into
business and miraculously become experts
overnight. Costa Rica is indeed a magical
country!
Many naive newcomers have been taken
advantage of by other foreigners who call
themselves “experts,” but are really
incompetent imposters. So, be careful!
We suggest that if you happen to come into
contact with any foreigner who calls himself
an “expert,” no matter how convincing he may
be, do all of the following:
1.Ask for references from other foreign
residents who have used the expert’s
services. Don’t rely on the testimonials
that appear on a person’s website. They may
be slanted. If your expert will not give you
any references, you will know immediately
you are being duped or sold shoddy
second-rate services. Also, try to contact
the person’s last employer before they moved
to Costa Rica. Again, if they will not give
you the contact information, you can bet the
person is hiding something. If a person who
is not of retirement age and claims to have
been highly successful in his or her former
country, they may be trying to cover up
something about their background.
2. Check with the Association of Residents
of Costa Rica to see if they are familiar
with the person’s services.
3. Enter the person’s name in a search
engine such as Google to see what comes up.
Be careful because many of these rascals use
an alias. There are even companies you can
pay to do a background check if you suspect
something.
4. Ask how long the person has lived in
Costa Rica. If they have been here for less
than 10 years, be careful. It takes years to
understand this country. It takes more than
a year or two to know the ropes. Many of
these neophyte relocation gurus and
entrepreneurs mean well but just don’t have
enough experience under their belt.
5. Find out what the person’s educational
background was when they lived in their home
country and if they have any formal training
in the Latin American culture, studies or
foreign investments. If someone was a
plumber, janitor, welder or doctor, for
example, prior to moving here, this does not
qualify them to give professional advice in
Costa Rica.
6. Beware of colorful, well-designed web
sites built by the so- called experts to
express their admiration for the country to
attract naive foreigners. Many of these
sites try to scare you into to thinking
their services are the only ones that can
keep you from being taken advantage of. In
reality, they are manipulating you into
doing business through them.
7. Be cautious of publications that appear
to be helpful on the surface but incessantly
hype the services of the person(s) or
organization behind them.
8. Over the years we have run into so-called
foreign experts who live comfortably in
upscale in “Ivory Towers” and gated
communities in gringo enclaves such as
Escazú. The majority of their friends are
other English speakers, so they have never
have really immersed themselves in the local
culture. They are virtually still foreigners
living among other foreigners. These people
live in isolation from the real Costa Rica.
Few of them have any contact with Costa
Ricans except for their maids and servants
and rich Costa Rican friends from the
country-club set. They rarely venture out of
their safe environment to gather the
necessary experience to confront real life
situations here. Most live as if they were
still in their home country, and give advice
about a country and culture they really
don’t know.
9. Most important find out if the person is
truly fluent in Spanish. There is no way a
person can have expertise unless he or she
can communicate with the locals and
understand the nuances of the local humor,
culture and language. Beware: there are many
foreigners who say they speak fluent Spanish
with a vocabulary of only a couple of
hundred words. I have run into many of them
in my nearly 30 years here.
(10) Always ask to see a person’s residency
card with their real name on it. Many
Americans are working illegally here. Would
you buy property from an illegal alien in
the U.S.?
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Christopher Howard is the author of 16
editions of the perennial best-selling “New
Golden Door to Retirement and Living
in Costa Rica” and “Guide to Spanish in
Costa Rica.” His newest creation is
“Christopher Howard’s Guide to real Estate
in Costa Rica.” All of these books are
available through Amazon.com. Mr. Howard
Also conducts monthly relocation/retirement
tours for those thinking of moving here.
Please see www.liveincostarica.com
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