BUYING PROPERTY IN COSTA RICA AS AN INVESTMENT
Investing in Real Estate offshore can be both an exciting prospect but also a daunting undertaking to consider due to the distance, a perceived uncertainty regarding how secure that investment will be and a lack of knowledge of the local laws. Costa Rica is in many ways the ideal offshore location if you are considering investing in real estate in a foreign country because it offers peace of mind for your investment decision in a variety of ways that directly address those concerns. In 2018, according to International Living, Costa Rica was picked as the best location in the World to retire due to the political and economic stability, the beauty of its wondrous natural attractions, its beautiful beaches, abundant flora and fauna, really great weather, quality of life, world class health care availability, easy availability of healthy food, clean water availability countrywide, good communications structure, and friendly people being just some of the reasons. While there are other countries in Latin America that are cheaper, the overall value and quality of life that you get for your dollar, when all is considered, is what makes Costa Rica a winner hands-down. All of these advantages make it an ideal vacation spot as well as the ideal retirement and investment location.
The property prices in comparison to what you would pay for a similar property in North America and Europe are considerably lower by far, as well as the ongoing costs. To cite a specific example let´s look at a couple from Florida that recently purchased a 3 bedroom, 2 bathroom home inside a secure and modern residential development in the Grecia area which offers 24/7 security and awesome common areas that include lap pool, general use pools, jacuzzi, games area, picnic areas, gymnasium, squash courts, soccer courts and even a pet exercise area. They paid $128,000 for this property which has a nice terrace and backyard and covered parking for two cars and their closing costs were $4702 (cost was shared with seller). They pay a monthly Home Owners Association fee of just under $60 which covers the common area and residential maintenance, operation and security costs. Their annual property taxes are just .25 of 1% so on the $128,000 they pay just $320 or less* a year (*taxes can be paid quarterly but a discount is offered if the year is paid in full) and their annual cost for full home insurance is just $200. Their electric bill has been averaging $25-30 dollars per month and water is just $12 dollars monthly while cable/internet service (fiber optic) costs $55 per month. They are just a couple of miles from one of the best Farmers Markets (Fridays and Saturdays) in the country where they can obtain fresh, healthy food at very reasonable prices. This case in particular, is one of persons who are retiring but when you see the low initial and ongoing costs, you can see that buying a property to put to use as an investment income generator by renting out to tourists (both International and Local) also makes a lot of sense as well as providing a place to use for your own yearly vacations.
If we stay in the area of Grecia again and look at what could be purchased with this type of investment property use in mind we can find a nearby residential-commercial-medical development currently under construction with all the extras like pools, gym, walking & riding paths, a canal running all around the property and other extras. Located just 20 minutes from the Juan Santamaria International Airport, this is an ideal location for persons wanting a place for their arrival and departure nights as well as an excellent base of operations from which to tour all of Costa Rica. It is also attractive for weekends, getaways and vacation use by middle class locals from San José (the capital city) which is just 45 minutes away which allows them to maximize relaxation time. A 2 Bedroom - 2 Bath unit fully furnished and equipped (turn key ready to rent out) could be purchased for $110,000 plus closing costs. At a modest 50% occupancy rate and a modest $99 per night rate, this property could generate an ROI of 10-12% including all monthly and annual costs as well as the property management costs and it would leave plenty of time available for your personal use and that of family and friends!
Higher occupancy rates and higher per night rates can be obtained for properties at the beach or with ocean views of course, but the initial purchase costs will also be higher, so it is a question of what your budget is. Absolutely awesome properties can be found in the Los Sueños Beach Community and its surroundings as well as in Manuel Antonio-Quepos area (which boasts gorgeous beaches and the most visited National park in the country) and just south you can find dream homes with stunning ocean views in the communities of Uvita and Ojochal and nearby surroundings. If you look at the Guanacaste region you will find spectacular beach communities from which to choose as well. It really depends on your initial investment property budget and your own personal investment and vacation goals. The beauty of it is that Costa Rica offers something for every budget and taste!