Can You Afford a Vacation Home in Guanacaste?

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Many of us have dreamed of being able to say, “I have property in Guanacaste.” But dreams have caveats.

For this article, I conducted a brief analysis of the average prices on 288 homes for sale in Tamarindo in the classifieds section of specialty website Encuentra 24. The result: To buy a home in this area, you should have enough in your wallet for about $2,000 per square meter.

In Playas del Coco, with 211 properties, an average square meter costs about $1,564. Both prices have remained relatively unchanged in 2016, according to the analysis of the website.

Other famous beaches in the Nicoya canton average about $1,800 in Nosara (with 123 homes available) and $2,000 in Sámara (with 119 homes).

Now, the big question: Can we buy properties in this area? To respond, we should analyze existing credit conditions as well as our ability to pay, given that not many people have their own resources to opt for an already built second home at the province’s most sought-after beaches.

Let’s look at an example. If the property you are looking at has 50 square meters of construction, its value would increase to about $100,000 (ȼ54.7 million) at several beaches. If it’s a 75 m2 home, the value is described in the chart.

You probably already have a mortgage loan on your first home and other debt from credit cards or vehicles. If you do, remember that your maximum debt level should be 35 percent of your net income.

A quick calculation by a factor of three shows that your net income should be greater than ȼ3.1 million or $5,640.

If you go by the classification used by La Nación’s State Program on the payment ability of Costa Ricans, people who have this type of income usually are large or medium business owners, executives, professionals or department heads with at least a university degree.

How many Guanacastecans meet these conditions? The National Household Survey shows that not even an average of households in the fifth quintile (the most wealthy) manage to earn an equivalent amount. It’s probably a very low percentage of the population that has incomes of this level (the average is approximately ¢2 million).

This article doesn’t aim to dash anyone’s dreams. There are other options that could allow us to enjoy a second home in Guanacaste, such as properties for sale by banks. In most cases, the discounts offered on these properties increases our purchasing power, considering also that in some cases banks offer better credit conditions.