For nearly a decade, Costa Rica has not only become a favored travel destination for millions of foreigners, but has also become a "hot spot" for real estate investment dollars. Condos, high rises, developments of all shapes and sizes were built along the ocean to satisfy the demand for "inexpensive" vacation homes and retreats.

Many rushed to borrow on the increasing equity in their homes and developers found it easy to raise money for their projects. Jaco Beach , on the Central pacific coast of Costa Rica, currently has an inventory of over 2500 condominiums, many only half completed. Developments have been shuttered as the money flow dried up. The subprime crisis deepened and the rapid escalation of prices along the pacific and Caribbean coasta of Costa Rica came to a screeching halt. "Emergency liquidations" became common as buyers and investors became illiquid and lines of credit and equity dried up.

"Is the party over for investors in Costa Rica real estate?"

There are still ways to make money here...but due diligence and selection are absolutely mandatory.

1. Gear your thoughts and targets to baby boomers that are just beginning to move here for retirement...these groups will be providing the basis for an imbalance in the supply demand ratio.

2. While many gringos love the beach, the majority of the baby boomers prefer inland, Central Valley areas which are more central and have more conveniences AND more temperate climates.

3. There are opportunities which are best described ( as above ) as "emergency liquidations"...some of these are OK, some are outstanding. The key is knowing what the resale market is OR how quickly you can resell the property ( or...how you will accomplish the sale. Costa Rica does not have an MLS system and , while some real estate people will tell you that one exists...the reality is that realtors generally do not cooperate with each other. Profit depends on the buy AND the sell...not just one side of the equation.

4. There is a shortage of homes for resale. Tico ( Costa Rican) style homes are totally different than American homes and simply not satisfactory for 95% of "gringos". In our area, there are probably 15 homes for sale ( in a town of 50,000 and a surrounding market area of probably a quarter million ) and, of those, probably two are fairly priced. The other reflect a supply and demand imbalance. Obviously there is a market for American style homes which are Tico built.

5. Generally, larger pieces of land are cheaper( per sq. meter ) than smaller. Obviously , it would make sense then, to buy, subdivide and resell. With the right piece of property, this can be a goldmine. Sometimes it makes sense to put houses on, other times to simply sell the raw land. Obviously this depends upon the financing and financial backing available.

There are opportunities here...huge and consistent opportunities. But you have to be here or at least have access to accurate and honest evaluation. then your profits will be large and they will be consistent.