Costa Rica, sometimes referred to as the Switzerland of Central America, has been a haven for retirees and second home buyers from the United States since the 1990’s. This is no accident.
In the early 1980’s, some powerful minds in Costa Rica got together and saw something that they wanted, disposable U.S. income. These men realized that may marketing Costa Rica as an overseas retirement haven, the country could become the gold-standard in retirement destinations. A Madison Avenue ad firm was hired to create a marketing strategy to bring in retirees and investors from the U.S. and ever since, Costa Rica has become the top destination for American retirees and second home owners and investors.
Among the genius marketing campaign Costa Rica became known as the Switzerland of Central America and rather than having a rainy season, the country adopted the term “green season” to describe the wettest months of the year. While other countries weren’t even thinking about attracting overseas retirees, Costa Rica was becoming home to many American and Canada expats who were already retired or buying a second home in preparation for their retirement.
To the south, Panama, which had always relied on extra income from the Panama Canal, free trade zones, and U.S. military personal spending their paychecks while on leave from the canal, the idea of marketing itself as a retirement haven wasn’t even on the agenda. After the Panama Canal changed ownership in 1999, Panama began to look at Costa Rica’s example of marketing to retirees and has since become a viable option for American retirees as well.
It’s not just Panama who has taken the hint. Belize, Ecuador, Nicaragua, Colombia, and the Dominican Republic are all following suit and making it easier for retirees to invest, acquire residency and make their second home aboard. And while Costa Rica has recently put restrictions on its pensionado visa, making it less attractive than it used to be for foreign retirees, the country is still seeing robust real estate sales. Now, more so than retirees, Costa Rica is seeing investors looking to acquire second homes or vacation properties that they will only use for a few weeks out of the year while using the properties as a source of income through vacation rentals the rest of the year.
Prior to the 2008 global financial crisis, property values in Costa Rica were at an all time high and were valued much more highly than properties in Panama but since the financial crisis, property values have shifted. While Panama is seeing more retirees and Costa Rica seeing more real estate investors the countries are both seeing a boom in their industries thanks to foreign real estate investment. And while other countries throughout the region are attempting to mimic what some Mad Men did in Costa Rica back in the 1980’s Costa Rica still leads the region in many areas regarding quality of service and quantity of options, setting it above and beyond its neighbors, even after all these years.