By Christopher Howard

“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 others lose it. I have also bought and sold a lot of property here and currently have quite a bit of 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 and bribery in Costa Rica, and most people have heard about or read 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 length 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 web sites 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 con man. Anyway he told me he wanted 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 $120,000 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 web site 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 web site. 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 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.?