Feb. 25, 2006 - Jardines de Ensuenos – Truth in Advertising and Promotional materials
Those who receive my newsletters
on a regular basis and follow
our project and website closely
already know how irritated I get
when I see materials distributed
by our competitors in this market
place that have no resemblance
to truth or reality for the buyers
of properties in Costa Rica. Hence
why I created and posted our Pledge
on our site. This week I am going
to point a finger directly at
one of our Jaco competitors, McCaw's
Beach Club to demonstrate some
issues all too common. For those
not aware this is a high priced
project on the south end of town
priced at $475,000 up to $2.1
million with an overall density
right off the radar screen so
if you just love concrete and
buildings entirely covering your
living space you will be right
at home here. To say the least
we are not in the same market
for the same buyers to supply
a similar product but none the
less should those buyers expect
to receive information from the
seller that resembles something
in the way of truth or realtiy?
Below I am copying the exact material
provided by them. Read this carefully
and see if you can see a glaring
flaw?
| CR
Condo Informantion |
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| Revenue |
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McCaw's
unit 14 |
| Estimated
weekly rental income |
3,000 |
| Expected
number of weeks rented
per year |
40 |
| Management/
realtor fees for renting
(%) |
.25%
750.00 |
| |
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| |
|
| Expenses-
(put all expenses as a
YEARLY cost) |
|
| Association
fees |
6000 |
| Estimated
Homeowners Insurance |
800 |
| Real
Estate taxes |
750 |
| Utilites
(Electric, phone, cable
etc) |
1800 |
| Cleaning
(cost per week rented) |
2000 |
| Misc |
4000 |
| Other
expenses not listed? |
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|
| Purchase
of Unit |
|
| Purhcase
price |
450,000 |
| Interior
Square footage |
1,200 |
| Patio
Sq footage |
100 |
|
Total Sq Footage |
1,300 |
| |
|
| Deposit
required |
25.0% |
| Estimated
settlement date |
sept
1 06 |
| |
|
| Estimated
Sales Price in three years
from today |
750,000 |
| |
|
Should the buyer be a little suspicious
of these figures if this is what
they are going to use to assess
the merits of making this investment????
1.So they are going to rent
out for $3,000 up to $20,000
a week for a $2.1million penthouse.
What percentage of Costa Rican
tourists will actually pay $428
- $2,857 a night? I submit to
you it is well under 5% of all
tourists will even remotely
consider paying these amounts.
Keeping in mind Costa Rica is
not the French Riviera, South
Beach or Rodeo Drive, thank
heavens.
2.Hence with this small market
to absorb these units would
you consider it reasonable to
suggest that one is going to
get a 77% occupancy rate on
this type of unit when the national
average is 64% for all lodgings
running from pocket change rates
and up????
3.Real estate taxes, they must
have a somewhat different calculator
than I as taxes are .25% of
the property value per year
so if the unit is sold for $450,000
would the taxes then not be
$1,125 a year?
4.Sale price is $346 a square
foot or $3,723 a square meter
and yet the most gorgeous condo
in San Jose sells their 3 story
penthouse for $2,000 a meter.
Is construction cost at the
beach actually double what it
is in San Jose, this just might
be a good question for the buyers
to bear in mind.
In my opinion these figures
should leave the prospective
buyer either in hilarious laughter
or crying in their beer. There
is nothing realistic about this
scenario what so ever and indeed
exemplifies caviat emptor to
its fullest. I most certainly
note that none of the material
from the developer contains
any notice or pledge to the
truthfulness of their material.
Regards,
Trevor Chilton
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