No cash, no buyers, there is still a solution!
Our company offers a framework for people willing to barter their property against another property in Costa Rica. The reason is very simple. Many people have properties while there is little cash available. And of course, there are very few serious buyers in the market. For example, certain people would like to capitalize on a lot they own, others would like that beach condo removed from their portfolio since paying those monthly HOA fees is not worth it anymore. No buyers, no cash, there is still a solution.
With the world reeling under global recession, the (un) availability of money plays a crucial role. As markets continue to be denuded, consumers are hard-pressed for cash and resources to make ends meet. In such a scenario, the age-old concept of commodity barters or exchanges assumes significance. A real estate bartering system implements barters between parties, each having one or more properties available for barter.
Spiraling costs and tightening cash flows could very well put a strain on investors. The bartering business is really recession-proof in a slow economy, and the barter system helps sellers find new buyers and move inventory, the cashless alternative boosts prospects bases, reduces bad debts, turns surpluses into profits, eliminates the idle time of caretaking and reduces cash outlays. By opting for exchanges, owners are assured of assets matching their requirements and demands. Moreover, through barters they can move assets to different locations, thereby spreading and reducing risk.
Property exchanges work on the premise: "I will buy your property, only if you will buy mine." They work in the case of those property owners who would like to move on and are on the lookout for properties in fresh surroundings, yet do not want to laden with additional expenses. A property exchange can be regarded as two separate transactions taking place simultaneously, where party A buys a property from party B, while party B buys the property from party B. The transactions take place on the same date via simultaneously closing. Both parties pay off any existing loans and obtain any new financing on the property they are buying. Rather than a seller-buyer transaction, it is a buyer-buyer deal.
In the US and Europe, barters are highly popular in areas where foreclosures are high; even then, swappers have to contend with paying taxes, in some cases higher than what they were paying for their earlier property. However in Costa Rica, barters are extremely cost-effective as there are currently no capital gain taxes. The only costs entailed are the transfer, brokering and registration fees.
Property barters may, in the long run, revive the Costa Rica real estate sector by encouraging people to consider buying and selling property again.