January 15th.
Tomorrow.
This is the day I am to recieve back rebids from construction companies. Is anyone else giddy? No? Just me? Well, alrighty then. I am a bit nervous. I know what I can realistically work with in terms of numbers, so this is largely, I think, a binary outcome, going forward or not. I want to go forward, of course, but emotional decisions are seldom good ones. Especially when there is an investment component to the outcome.
None the less, this has never been an entirely rational enterprise. I followed a lot of intuition in buying the land, finding an architect, and focusing on an approach.
I will let you know what I hear back.
Thanks for staying with me on this.
Tomorrow.
This is the day I am to recieve back rebids from construction companies. Is anyone else giddy? No? Just me? Well, alrighty then. I am a bit nervous. I know what I can realistically work with in terms of numbers, so this is largely, I think, a binary outcome, going forward or not. I want to go forward, of course, but emotional decisions are seldom good ones. Especially when there is an investment component to the outcome.
None the less, this has never been an entirely rational enterprise. I followed a lot of intuition in buying the land, finding an architect, and focusing on an approach.
I will let you know what I hear back.
Thanks for staying with me on this.
posted by warnerk at
4:06 PM
4 Comments:
I have been following your blog for awhile now as I also have a pretty piece of land in the Central Valley near San Ramon.
You are absolutely correct in assessing emotion as a negative in regards to investments. That is difficult for me to do in my stock investments although I try and impossible for me in regards to Costa Rica. I cannot, for the life of me, understand how you can NOT be emotionally involved with your Costa Rican property. Is this really a "binary" decision? Are your budget limitations absolute? Is it possible that your emotion may sway a decision which your head tells you is too risky? You know your character better than anyone else and these are the points in our lives which define us to ourselves and to others.
I embarked on a 5 year plan with my property there. My plan can be stretched to a longer period should the market not co-operate. Can you not do the same?
There is a number after which it makes more sense to take that money in cash and invest it elsewhere. The returns are greater. The building cost, according to these estimates, has gone from 64/sq foot to 125-200 a square foot. We are at the threshold where the improvement to the value of the land is less than the cost of the structure. And even if there is a gap, there is a cost to locking up 200k of capital until I sell it one day. Who knows, if oil goes to 200 dollars a barell, will anyone go to CR anymore.
However, as you point out, there is not a large cost in waiting, to see if labor costs reduce. They may. If materials and labor become cheaper, and I believe the latter is more likely than the former, then the cost of building could decrease a great deal. But this is, as always a gamble. I will need to weigh the costs of building, and enjoyment, against the benefits of investing this money elsewhere.
Tell me about your plans James, how far along are you now?
Thanks for your words.
So far, since I have a 5 year period before I retire, all I have done is construct a 75 meter service road and make a few plantings. I will install some more infrastructure items like a septic system and bring a transformer onto the property from the road and perhaps the water lines as well. I hesitate to build now since that would involve a cost to maintaining a residence as well as a risk of theft. Land prices seem to have increased dramatically in the Central Valley recently. I paid $4.85 per sq meter 18 months ago. Similar sized properties in my area are being offered for as much as $15 to $20 a square meter.
I did not buy this property as an investment, although the bare land qualifies as such. I bought the property as a place to where I could retire. I love Costa Rica and the place is on my mind constantly. I have two waterfalls, a stream and a major river bordering the land.
http://travel.webshots.com/album/55
7729347XjZaVA
Since my interest in my property is almost strictly emotional, there is no consideration of cost versus profit. I am using a different measuring stick than you. But since I am constantly designing and re-designing a home, I am fascinated with anything to do with building a residence in CR. I sure hope your estimate makes the project possible.
James,
Regrettably, the link did not work. Might be my computer though, and not the link. It sounds beuatiful. I wish you happiness in it in your retirement. Costa Rica is, indeed, magical. I cannot put my finger on why it is, but it calls me too.
Thats why I admit that this project is a love affair as much as I try to focus on the investment realities. Honestly, when I bought this land, there was no guarentee that it would be worth anything, or indeed mine. Between my niativite, my bad spanish, and outlandish trust, I could have been de frauded a million times. But I was not. then, 6 year later, I was suprised to learn the land was worth a lot of money, or at least a lot more than I put into it. That made me change my plan from 8 guys with hammers and drills and a half *ssed idea about building erecting a surf shack, to fulfilling a dream. Seeing a vision arise in concrete and metal and to stand there open and light and breathing, as a home, a real home.
So I understand your relationship with your land. I hope that your dreams come true, and that the blog helps you in some way. I am learning a lot from my readers.
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