Being a real estate agent in paradise is about helping dreams become reality. It is an awesome responsibility and one which should be taken with great care and thought. One of the most common dreams we here in my office is about owning and operating a hotel in a tropical destination, hotels for sale in Costa Rica. No more time in the office cubicle, no more traffic jams, no more wasted time in board meetings….just your piece of paradise and the opportunity to share it with people who are paying you to escape their daily grind. Waking up to welcome everyone down by the pool to some organic coffee, fresh fruit and to share stories and plan the days adventures. Welcome everyone back in the afternoon, happy hour by the pool, sunsets and story telling of the adventures lived... Ahh, sounds so idyllic and the reality is that it can and should be.. but the best of dreams are built with your head in the clouds AND your feet firmly planted on the ground.
There are some VERY important KEY elements to insuring that making a hotel investment is sustainable, enjoyable and rewarding in both the SHORT and LONG term. I will touch on a few of these core elements in this blog and will follow up with some additional region specific highlights about hotel opportunities in different areas of Costa Rica.
Number 1
Make sure you understand the pros, cons and lifestyle of the location where you are shopping for a hotel! We see so many clients caught up in the room count, financials and comparing hotel opportunities not only in different areas of CR, but also in the region. If you are a corporate investor, building a portfolio of hotels with streamlined management, staff, reservations systems, etc. this kind of statistical approach to a purchase is paramount, but for the individual operator or investor dreaming of your own property, this can be a HUGE mistake. Of course numbers are important, hotel revenue, expenses, cost per rooms, ROI’s, etc are important, but if you are going to be an owner operator, it is PARAMOUNT that you love the destination, community, lifestyle, and natural setting which you are ultimately going to be selling and living every day. The perfect hotel model in an area which you do not love and feel connected to will fail.. not a question of if, but of when. When you close your eyes and visualize those bed and breakfast or hotels owners who passionately share time, stories, magical moments, etc. with their clients each day, (effectively living the dream) it almost ALWAYS starts with them finding their dream location and then finding a way to share it with guests.
Number 2
Understand the market and destination you are buying in, obstacles and opportunities. There are a host of hotels of all sizes on the market in Costa Rica at any given time and just as many reasons why any given property might be for sale. Work with a real professional who can help you understand more than the bricks and mortar of an offering but moreover, how the property fits into a local, regional and global marketplace. Understand if the sellers are fatigued, need a capital infusion to unlock potential, are incompetent or just lacked the right vision and operational savy to be successful. Beware of becoming the buyer who just assumes you can do it better, but don’t miss out on opportunities due to a fear that you can’t. Some of the greatest hotel opportunities in Costa Rica are people who purchased or built in prime locations during an entirely different market here and who simply can’t compete or don’t have the energy to. Finding those gems in the right areas, which just need a bit of capital, vision or energy to unlock potential can be easier than you think if you have the right guide and take the time to analyze and understand the market you are buying in.
Number 3
Understand your own goals, limitations and focus. Do you have the vision, capital and ability to unlock potential? If so, consider looking at older hotels, distressed properties, options that are diamonds in teh rough and need to be cut, polished and built up, but “hide” untold treasures, returns and equity. There are PLENTY of these options around in Costa Rica for those with the vision, patience, capital and ability to put this work forth. At the same time, if you are are not ready to undertake the remodel, upgrades, build up time of marketing and occpuancies, recognize that and realize that you are going to need to ultimately pay a bit higher premium for properties that are turn key ready and likely producing higher returns. There are also some great opportunities for producing and amazing hotels un operation. You are likely not going to see firesafe pricing or as much flex on these more polished operations, which is why it is so important to KNOW yourself, goals and vision as well as working with a experienced professional to Insure that your search for a hotel is well grounded and informed.
Ultimately, owning a hotel in paradise can be the investment of a lifetime and the experience of a lifetime. Stay tuned for more installments where we begin to dive into some of the nuances of the different Costa Rica markets for hotel investments and an some thoughts on the pros and cons of each to help inform anyone considering making this important investment in a hotel in Costa Rica.
Interested in buying a hotel in Costa Rica? See below 3 hotels for sale in Manuel Antonio, Santa Teresa & Esterillos.