The third in a series of articles comparing Central America’s two leading expat and retiree destinations.  Costa Rica is the more established of the two, but Panama is the upstart new kid on the block with a full head of steam and a pocket full of dollars.  Who will come out on top? Read more and find out.

Click here for Round 1: Retirement Benefits

Click here for Round 2: Climate

Click here for Round 4: Things To Do

Round 3: People and Culture

If you are going to relocate, either as an expat or retiree, its important to know what your neighbors will be like.  Considering that most prospective expats and retirees don’t want to live in a country full of jerks, this article takes a look at the culture and people in both countries and determines a winner.  Round 3, begin!

Note: These are generalizations and not meant to include every citizen.  Also, food will be covered in another article.
Costa Rica

The oft-repeated generalization is that Costa Rica, in fact, has no culture.  This is impossible; even a land of brain-eating zombies have a culture of, well, eating brains.  The Ticos certainly do have a culture, albeit not as impressive as the Mayan-rich countries to the north.  And if culture is defined by recent social and political instability, then I think most Costa Ricans would be more than happy to have little of it.

CR is definitely the whiter of the two countries, with 97% of the population classifying themselves as white or mestizo.  Some Ticos will claim that there isn’t racism in the country, which is easy to say when you never really see Afro-Caribbeans or pure indigenous people.  In fact, Afro-Caribbeans were not allowed to leave the Limón province until 1949 (however, the U.S. had some pretty draconian racial laws at this time as well).  But alas it is the 21st century and for the most part all is well.

Ticos are generally conservative people who for the most part shun the weird and bizarre.  Additionally, they shy away from debate in an almost offensive manner as to, ironically, not offend anyone.  Perhaps that is the Central American key to political stability: don’t talk about politics, don’t stir the pot.  They will, however, do whatever they can to impress their guests and are extremely amiable.

Religiously, Costa Rica is a dominantly Catholic country.  However, the church does not have the kind of power or influence it does with CR’s neighbors; many Ticos claim to be Catholic but practice it more as a tradition than a lifestyle.  A crucial part of the country’s culture is its strong middle class, something of an oddity in Latin America.  It acts as a sort of homogenizing ease between the poor (yes, Costa Rica has poor people despite claims to the contrary) and the rich elite, smoothing over tensions by giving the poor an feasible economic ladder to climb.  Thus, coupled by the fact that the country has no army and no military budget, is the reason why the school, medical, and road systems are developed.

Summing up, Ticos are smart, kind people who wish to leave a good impression on visitors.  While this makes for a great vacation and you know your neighbors will be peaceful folks who invite you over for sunset dinners, the general disdain for healthy debate takes some of the spark out of conversation

Panama

Panamanians must be split up into two groups: those living in the capital, and everyone else.  Just about every city-dweller in the world makes fun of, looks down on, or thinks less of the hicks, rednecks, countryfolk, farmboys, etc etc that live outside the metropolis’ limits.  But the inhabitants of Panama City seem to have an indignation, nearly reaching hatred status, of everyone else in the country.  Once, when telling a Panama City friend of mine that I was going to go to the rainforests to the west of the city, he became perplexed and responded simply with “Why would you want to go there?”.  PCity is the place to be; if you don’t live there, then you haven’t made it to the top yet.  Thus the snobbish attitude that many capital residents have and the reason why two groups must be made when looking at the people and culture of the country.

Whereas Costa Rica is very, very white, Panama is a melting pot of races and cultures.  A healthy population of Afro-Panamanians, as well as several indigenous communities, inject a good deal of diversity into the country.  Additionally, the canal project and subsequent international trade has brought sizable enclaves of Chinese, Koreans, and Indians to the capital.  The diverse crowd, along with prosperous economic times, makes racism a mute point, although it does exist.

The Panamanian attitude, especially in the capital, is a combination of New Orleans’ “let the good times roll” and Las Vegas extravagance. The new found wealth that the canal and international banking have brought has fostered a forward-thinking capitalistic society that could care less about the past; in fact, I had a Panamanian history and culture professor in Panama City tell me that history is pretty much irrelevant and can even be a hindrance.Panamanians can be a bit more closed off than their Tico counterparts, but once the initial ice is broken they are as inviting as any culture.  They love to talk about anything, which is perhaps a vestige from their Colombian roots.  However, the wealthy elite, who are growing in number, can be a bit prudish and flashy.

Round 3 Winner: TIE.  While their timidity and political disassociation can get a bit annoying at times, the Tico’s welcoming vibes are irresistible and definitely add to the charm of the country.  Also, their predominately European heritage makes them unique in Central America.  Panamanians love a good party and are cool people, but the initial closed circles and penchant for the uber-rich to flash money around is a turnoff.  But the diverse racial mix of the country, including several indigenous groups and the Afro-Panamanians on the Caribbean coast, make up for any big-spending showboaters.

The second in a series of articles comparing Central America’s two leading expat and retiree destinations.  Costa Rica is the more established of the two, but Panama is the upstart new kid on the block with a full head of steam and a pocket full of dollars.  Who will come out on top? Read more and find out.

Click here for Round 1: Retirement Benefits

Click here for Round 3: People and Culture

Click here for Round 4: Things To Do

Round 2: Climate

A major consideration for any prospective retiree or expat wanting to relocate to Central America is climate.  No where in the U.S. or Europe does the climate change so rapidly, even within an hour or two by car.  Let’s take a look at the climates in each country and see who comes out on top.  Round 2, begin!

Panama

What happens when decide to build your capital city in the rainforest?  A metropolis that is hot as hell.  That’s precisely what Panama (well, the Spaniards) did and the result is a swealtering, humid city where it is impossible to stay dry, especially if you are a gringo.  That, coupled with the Panama City penchant for always wearing collared shirts and suits, and it is nearly impossible not to sweat out every toxin in your body.  I lived there, and needed a shower after my walk to the university at 7:30 in the morning.

Outside of the city things change dramatically.  The coasts, especially the Pacific, enjoy a nice ocean breeze that keeps things comfortable, and this is where many foreigners spend much of their time.  The rainforest – and Panama certainly has a lot of it – is hot, muggy, and wet (duh) but I found it to actually be cooler than the burning concrete of the capital.  Conversely, the awesome Azuero Peninsula is much like southern Spain: hot and arid.

The mountains, of course, are much more temperate.  Thus the reason Boquete feels like a suburb of a U.S. city.  El Valle de Anton is also a quaint mountain hamlet within striking distance of Panama City  But Panama just doesn’t have the mountains that Costa Rica does.

Costa Rica

There is a reason Costa Rica has been the expat and retiree haven for 30 years.  The climate is quite incredible, extremely diverse, and for the most part predictable.  The rainforests are hot and sticky, which of course is what makes them rainforests.  The central mountains (including San Jose) are cool year round (60′s and 70′s) with moderate rainfall, providing the climate needed to produce the famous coffee.  The nights are cool here and light jackets are fashionable.  The beaches, like Panama’s, benefit from the seabreeze; however, the Caribbean can get sweltering and it can rain like hell.

Round Two Winner: Costa Rica.  While Panama City may rule in terms of nightlife, diversity, and commerce, its like an oven.  An oven with a rainforest in it.  San Jose’s mild climate and close proximity to rainforests and beaches gives it the edge in terms of climate.  The mere fact that Costa Rica has more mountains, thus a milder climate, makes it the winner in round two.

Voice your opinion below.  Agree, disagree, or have additional info thats been left out?  We want to hear from you…

By Patrick Connelly

In the United States, timekeeping and punctuality are extremely important. In Costa Rica, on time is thirty minutes late.

This single cultural difference is the cause of incalculable headaches, marital verbal jousts (usually in public), and the occasional complete gringo psychological meltdown. For the uninitiated, the manner in which life progresses in Costa Rica can be a quite a shock. Life is slower, catered to be savored.

Costa Rica is unique in that its culture has been carved and crafted by so many different nationalities. Geography is the culprit here. The country lies in a peculiar spot on the Central American isthmus that allows for cultural invasions to occur freely; most notably, because it lacks a major indigenous population. A whopping ninety-four percent of Ticos classify themselves as white or mestizo, while less than four percent are Afro-Caribbean or indigenous. Consequently, Costa Rica is an anomaly on the isthmus in that there is not the prevalent indigenous culture or the indigenous versus white dynamic as seen in Guatemala or Belize, nor the visible social ills that often accompany it.

To make up for the lack of indigenous civilizations, Costa Rica became a land of immigrants, much like the United States. Perhaps this is why people from the U.S. find the country so appealing; indeed, the idea of the American dream is alive and well here. Europeans and Chinese immigrants arrived en mass at the turn of the twentieth century, bringing with them their respective cultures; more recently, North Americans have added to the cultural dynamic. As far as Latin American countries go, it is a real melting pot.

Which is not to say that San Jose is like Rome or New York. This is, after all, a Latin American country, and with it comes the standard-bearers of Latin cultures. For instance, driving. The first time a highway built for two lanes becomes a makeshift four lane monster – with motorbikes weaving between cars and trucks – one realizes they are definitely not in Kansas anymore. As in much of the Latin world, the siesta has gone the way of the dodo, replaced by the need to improve the bottom line; however, in the more rural and mestizo parts of the country a post-lunch nap is still enjoyed. As with the first point on punctuality, make a mental note: businesses – sometimes all businesses in a town – may be closed for a few hours in the afternoon. Find a nice hammock, a good book, and relax.

While the Central American staple of beans and rice – comida típica ­- is ubiquitous throughout the country, Costa Rican food is as diverse as its people. As a result of the large immigrant population, tourism, and the McWorld which we now live in, everything from fast food to filet mignon can be found quite readily, even in remote locales. One will definitely not go hungry in Costa Rica, nor will one end up eating fried ants and monkey stew.

Like people from the U.S., Ticos have forged their own culture and identity from their unique geographic position and diverse racial makeup. They are incredibly proud of their country’s achievements, particularly the fact that Costa Rica has not collapsed into civil war or ethnic slaughter like so many of its neighbors. “More teachers than soldiers” is a popular claim to fame. A certain mean between the extremes is the goal of most Ticos; in other words, proud but humble.

While they may be humble, machismo still exists among Costa Ricans, albeit not to the extent of other Latin countries. In the Meseta Central and along the coasts machismo has been replaced with modern day liberalism, and the old vestiges seemingly only exists within the taxi and bus driver community. However, in more rural areas with large mestizo populations women may occasionally receive inappropriate catcalls (dubbed piropos); ninety-nine times out of a hundred these are innocent, merely males asserting their masculinity to their nearby amigos. Ignoring the calls and whistles usually does the trick.

Back to the first point. We estadounidenses often forget that our culture is one of the most work-driven and fast moving in the world. Not always being punctual does not mean that Ticos are lazy or inefficient; in fact, they are very industrious…when its deemed necessary. A business meeting at five thirty starts at five thirty; similarly, a bank will open its doors promptly at the same time every morning. To exemplify the achievements of their country, Costa Ricans will go out of their way to make foreigners feel at ease, trying their best to impress. Additionally, altitude defines attitude. In the urban mountain ranges things are generally a bit more punctual, a bit more scheduled, a bit more…U.S.. Along the coasts and in the rainforests life moves slower; manaña is said to be the national answer to everything. But this is part of Costa Rica’s charm, the ability to live life at the perfect pace. It is truly pura vida.

Picture provided by barnabywasson on flickr

As retirees struggle to find a solid economy that provides a safe place to invest in, Mexico stands out as one of the most advantageous countries south of the border in which to do so. Out of a list of things that makes real estate investment in Mexico a very attractive option, property taxes may be by far the greatest of all advantages.

The property tax rate in Mexico may range from 0.275% to 1.350%, depending on the location of the property and it is payable annually. Regardless the property location, property taxes are lower than those in the US.

Average real estate taxes in Mexico

When compared to the United States real estate market, Mexico´s property taxes are almost 50% less than those of the US. A property of around $450,000 located in Sayulita can have an annual property tax of just $150. Similarly, the owner of a property of around $200,000 will normally not exceed $130.00 per year.

Why are property taxes in Mexico so cheap?

Mexico´s priority is to encourage investing, so instead of having property taxes as a source of big revenue, the government prefers to attract investment and promote homeownership by making the real estate market an attractive and profitable investment for foreign real estate buyers.

The cost of property ownership tax (Impuesto predial) in Mexico is pretty reasonable. After the owner receives the bill via mail they can pay it at a local bank where a receipt will be issued. Bear in mind that these paid receipts are a key document for the sale of the property in the future.

Photo used for this entry was kindly provided by Flickr user blmurch

By Carol Stanley

Contributing writer to Latinworld.com

You are finally retired, and want to find a new and exciting life. The house is sold, the family is spread out, and frankly you feel like it is time for you to kick up your heels.

There are many attractive places to relocate south of the border. This is the time to investigate, check out real estate prices, and find your perfect lifestyle. Almost anywhere you look there will be a wide selection of homes to choose from. Most cities in Mexico boast of economical living in comparison to the United States real estate prices. Generally speaking food costs, utilities, transportation, entertainment, and health care are fairly reasonable.

Be aware that moving to a foreign land has some challenges. The language is probably one of the biggest challenges. In Mexico many people speak English, but there will be times when you struggle to communicate. Also, there are cultural differences with regards to time. Things move a little slower in Mexico so don’t be surprised if 9am is really 10am. Things are different south of the border and you will have an adjustment period to go through, however, this is part of the learning experience.

Some of the things you will have to look into are as follows:
1. Laws of the country and how they apply to U. S. citizens
2. Banking in a foreign country and where to have your direct deposits go
3. Pet laws
4. Taking your automobile to a foreign country and costs
5. What you can bring, and what is best left behind
6. Papers that need to filled out before entering your place of choice
7. Medical care including medicare benefits
8. Learning the new language
9. Finding affordable housing that suits your needs
10. Activities
11. Traveling (back and forth to the U.S.) flight availability and costs

There are more things to look into, but this is a beginning. All relocating experiences offer challenges and can be exhausting; and moving to a foreign country will just offer a few more things that need to be addressed.
Here are some suggestions for retirement destinations in Mexico:

San Miguel de Allende
Puerto Vallarta
Loreto
Lake Chapala
Cancun

Check out the many websites, make some calls, find expat forums and ask questions. The best advice is to spend some time living in one of these exciting places. Actually it is a good idea to visit several places, and the longer you stay you will get a true feeling for the place. You may be willing to give up certain comforts, but there are some things that are important to you, and those things should be addressed.

You could very well have that adventure of a lifetime.

Featured Blog Contributor:
Carol Stanley is a well known speaker and author. She writes frequently on baby boomer and retirement topics. Her latest book, For Kids 59.99 & Over can be found at all online bookstores. www.babyboomerpower.com, www.boomercarol.com

In this interview Scott Bower highlights the must see sights in and around San Jose, Costa Rica. He also gives his take on the environmental impact that new real estate developments are having on the coastal areas. Scott owns a travel company, Package Costa Rica, and has been living in the country since 2001.

Download the mp3 file by clicking the right button of your mouse and selecting “Save Link As…”

1. Legal guidance – Buyers should use a real estate company or their own attorney to guide them through the legal process. Costa Rica’s legal system varies from most countries. Buyers must contract a trusted attorney to do the due diligence necessary. Make sure there is no impending tax burdens on the property, zoning, among other things that could affect title or future construction.

2. Get familiar with Costa Rica – Don’t get swallowed up by the beauty. Often times tourists fall in love with the incredible scenery and charming people, but forget that real life is not a permanent vacation. Don’t forget about bills, work, cultural differences. It is a good idea to live in an area before you make a purchase, even if it is for a couple weeks or a month.

3. Research the area thoroughly – Think about your needs. Do you want modern conveniences like Internet, cable TV and air conditioning? Or would you prefer to live in the middle of rain forest with wild animals looking in your window? Costa Rica has a wide variety of climates, from the more dry “pampas” of Guanacaste to the alpine forests of Heredia. Don’t forget about the tropical Caribbean coast. Once you decide the type of climate you like make sure you can find a place that has what’s important to you. Do you like to surf or shop in large malls? Is there a grocery store nearby? What about a bank? If you are looking to go into full immersion, maybe living in a place with very few foreigners is a good idea?

4. Compare and contrast – Once you’ve seen numerous properties, make a check list of the pros and cons of each one. Carefully consider all factors like the quality of the construction and surrounding neighborhoods.Make a list of must have things and other things that you desire, but can live without.

5. Once you’ve made a purchase, get involved with the culture – One of the most important aspects of living in another country is immersing yourself in the culture. Costa Ricans are generally very welcoming and like to teach others about their local culture and expressions. Spend time learning Spanish. It will help you a great deal. Live like a Tico!

Click on the link to view thousands of properties in Costa Rica

I have exchanged a few emails with Bret Dudl, property developer in Costa Rica. He recently gave me some insight into the tax ramifications when buying Costa Rica property.
Here is what he writes:

The advantages of buying property in a corporation in Costa Rica are many, but it’s very important to use the right kind of corporation and to know what the tax ramifications are for each.

• When you buy property in a corporation and subsequently sell it you can avoid the transfer tax

• Corporations in Costa Rica don’t pay income tax.  This can be a major advantage if the corporation is going to retain profits for a future investment

• There is a big difference between a SRL (similar to a U.S. LLC.) and a SA (similar to a C-Corporation).  You use a SRL if you are a US Citizen and want to receive the benefits of pass through losses to offset gains.  You use the SA if you have more than one officer of the corporation and want to sell shares of stock to others.

Ok, I’m glad I got your attention. I had the pleasure of chatting with Ben Vaughn, real estate professional and author of Guys in the Zone, a very insightful Costa Rica real estate blog.

This was a really fun interview. The sound quality is not the best, but I enjoyed speaking with him. We covered a lot…from the most common misconceptions people have about buying Costa Rica real estate to how the real estate market there is being affected by the economic slow down around the world. Listen to the interview and find out why you should be yodeling naked on the pacific coast of Costa Rica! (the answer is about 5 minutes in)

picture provided by jeepeenyc on on flickr    http://www.flickr.com/photos/jeepeenyc/974730475/

Article written by Sharon I. Heafey and Victor Loza

Contributing writers to Latinworld.com

Ouch that Hurt!

If you knew me, the last thing you would ever think was that I was gullible. I’ve owned a very successful computer consulting and training company for 20 years, worked for a law firm, and come from a family whose philosophy is, “Believe half of what you see and none of what you hear.”

I’m tenacious, do tons of research and have endless questions that I’m not shy about asking. So how did my husband and I get ourselves into trouble when we built a home in Mexico? Simple, we did not make sure that we had the right agent. Fortunately, finding the right agent is not as hard as it was 4 years ago when we moved to Mexico.

Rules of the Road

Rule #1: Find an agent that is a member of a reputable real estate organization. In our area of Rosarito and Ensenada that would be AMPI (for both Rosarito and Ensenada) or APIR (for Rosarito) or APIE (for Ensenada). It’s a small community and everyone knows who to work with. In addition, AMPI is also recognized by the National Association of Realtors (NAR) and agents are governed by a Code of Ethics.

If you are already working with an agent, ask them about their membership in one of these organizations. If they tell you they don’t belong because membership doesn’t mean anything, run, run very fast. There is a reason why they are not members of any of the local Associations and you don’t want to be the person who finds out why.

Rule #2: Get references. Start by talking to someone in AMPI, APIR or APIE. Let them know that you have already met and selected a realtor, but want to find out if they are a member in good standing. Ask if there have been complaints against them and how they were resolved. Not all agents will be members of all organizations, so be sure and ask your agent which organization they belong to.

Talk to at least two clients who have worked with the agent – even if they did not buy. Don’t rely strictly on written testimonials. These are easy to get – or fabricate. You want to hear the tone of their voice or whether they hesitate before they respond. Ask the reference what the best part of working with the agent was, and where the agent could have improved. There is always room for improvement so you should expect to hear something, even if it is minor.

Since you are moving to a new country, it is equally as important that the buyer received support after the sale. Was the buyer dropped like a hot potato when the commission check cleared or did the agent help them with their phone and cable hook up, find a doctor, dentist, dry cleaner, and best of all, a great taco stand?

Rule #3: Beware of the bait and switch to get you to buy NOW. As the economy changes, there is more misleading advertising. Ads range from claims that there are fire sales where prices are dropping by hundreds of thousands of dollars to homes having great ocean views when they really have an ocean “peek a view.”

There are good deals out there, but they probably aren’t going to disappear in the next 24 hours. If you really want a property, but have not had time to do all your research, put down a refundable deposit and have it held by a reputable company that you and the seller agree upon. Ask to see the previous listing before the drastic drop in price and find out how long the property was on the market. A change in price of $100,000 after being listed for only 24 hours screams mistake, not deal.

Rule #4: Find out if your agent owns property in Mexico. I’ve never been big on, “Do as I say, not as I do.” If your agent is telling you that owning in Mexico is an excellent investment, you deserve to know how committed they are. Over the last four years there have been numerous agents that have easily come and gone because they were on a month-to-month rental.

If you want to be able to call your agent six months or even two years from now, you have a much greater chance of having your agent in the country because they have made the commitment to invest and live in Mexico. With 80% of buyers finding their property on the Internet, you will even find brokers claiming they have offices in Mexico when they neither operate nor live in Mexico. Ask where their offices are located and then stop by to check out the location.

Rule #5: Make sure your agent has experience with your type of purchase. There is a huge difference between buying a built unit and building your own home. We actually own two properties. Our home in Rosarito was already built and we lived there for the 2.5 years it took to build our home in Ensenada. The purchase in Rosarito was easy, smooth and pretty much stress free.

Stressful cannot begin to express our experience with building our home in Ensenada. Now we know, from personal experience, every mistake you should not make and exactly what you should do to protect yourself. There is a huge difference between learning about building a home and building one. If you want to build a house, find an agent who has actually experienced building.

Today, more and more buyers are looking for property in wine country. Purchasing property with the goal of making wine is totally different than buying a house or condo. There are considerations that you would never begin to think about in the United States or Canada. Be sure to work with an agent who has experience with this type of purchase in Mexico. If they don’t have personal experience, let them know you don’t have a problem working with an associate of theirs that does have the proper experience. If your agent isn’t willing to share some of their commission to make sure you are protected, maybe they are not the right agent for you.

Rule #6: Ask for documentation on listings. So many times the agent will tell you they have a great listing, but can’t provide you with documentation showing proof of title. There is nothing worse than getting your heart set on a property and then after weeks or months of running around in circles, you find out that the seller doesn’t have clear title. Not only are you out a property you fell in love with, but you have lost time and possibly another piece of property that you would have liked equally as well.

However, it is not uncommon for an agent to get a new listing that could fit your needs, but not have had time to properly research the property. That should not be a problem as long as you are aware that there is a possibility you might not be able to make a deal if the research turns up some problem.
Here Comes the Offer

Yes, you can have a good experience purchasing property in Mexico. You want to make sure that you have a knowledgeable, experienced, and ethical agent. When you are ready to make an offer there are a myriad of additional considerations and concerns, but if you have selected the right agent, you will have the right person to guide and protect you.

Sharon Heafey and Victor Loza are co-founders of Your Baja Connection. YBC provides real estate and relocation services for buyers in Mexico. YBC can be reached at 858.748.5870, via email at YBC@YourBajaConnection.com, or at www.Your BajaConnection.com.

At Your Baja Connection we understand all these issues and we have purchased and gone through the process ourselves. We want to be Your Baja Connection and are ready to assist you in a worry-free purchase of your new retirement or vacation home or condo in Mexico.