Advantages and benefits of owning real estate in Costa Rica

Investing in real estate in Costa Rica has become a profitable solution that provides advantages and strengths to the return on investment! 

Costa Rica is a country known for its natural beauty and quality of life, so it is understandable that many people wish to have their own company, business, home and invest in the medium and long term in this wonderful place. 

If you are considering moving to Costa Rica to start a new life, explore investment opportunities in a thriving market, Costa Rica offers an exceptional quality of life, breathtaking nature, rich culture and diverse opportunities for financial and economic growth. 

Discover all that this country has to offer and start your Costa Rican adventure today!

Costa Rica is a very attractive country for real estate investment. There are several reasons why this is so. First, Costa Rica’s political stability is very solid. Costa Rica is a stable and peaceful democracy, which has abolished its army since 1949. This creates a favorable environment for business and investment. Secondly, the Costa Rican economy is stable, despite the crises that have occurred, the average GDP growth rate of 3.8% has been maintained over the last 10 years. In addition, the local currency, the Costa Rican colón, has maintained a stable exchange rate against the U.S. dollar. Third, The Costa Rican education system is free, continuous and of high quality. Education is compulsory and is offered to all children, regardless of their socioeconomic background. This means that all children have the opportunity to receive a solid, well-structured education that prepares them for a successful career and a fulfilling life. According to data from the National Institute of Statistics and Census of Costa Rica (INEC), the illiteracy rate in Costa Rica is 2.8%. This means that 97.2% of the population 15 years of age and older can read and write.

All of the above, projects internally that the country maintains and is the basis of its stability, both its political position, health and education systems, economic and financial development, its environmental conservationist approach, its geographical position, and many other advantages, allow the investor to understand that developing a company, business and investing in real estate in Costa Rica, is a great option. 

On the other hand, the demand for real estate in Costa Rica has increased in recent years due to population growth and the attraction of tourists and expatriates. This has led to an increase in the construction of new real estate developments. Costa Rica is known for its natural beauty and biodiversity, making it a popular tourist destination. This means that there is a steady demand for vacation rental properties, which could be an opportunity for real estate investors. 

Costa Rica has favorable policies for foreign investment in real estate. Foreign investors can own and operate real estate in the country with few restrictions. In addition, foreigners have the same legal rights and protections as Costa Rican citizens in relation to real estate.

There are no limits on the amount of properties a foreign investor can own in Costa Rica. However, there are some restrictions on land ownership near the country’s coasts and borders. To acquire properties near the coast, foreign investors with proper legal and investment advice, can and should use business structures, corporate and trusts among other instruments to comply with the regulations of the country, if they are convenient and create some kind of advantage, are main possibilities, but not exclusive, because there are other possibilities and legal structures to develop enterprise, business and investment, everything will depend on the correct advice that keeps at his side the investor. Even foreigners can obtain mortgage loans to buy property in Costa Rica, but the process can be more complicated than for Costa Rican citizens. It is recommended that foreign investors work with our team of specialists in real estate developments, and thus keep at their disposal the advantages that the real estate laws allow them to have in Costa Rica to ensure compliance with all regulatory provisions and take full advantage of competitive advantages. 

This is the time to invest in real estate, because there is a growing real estate market, with high demand for units, which means that there are opportunities to find properties at attractive prices, low maintenance, and that are projected to double or triple the investment price in a relatively short period of time, but it is necessary to have the collaboration of specialists in the area of real estate investment. It is reiterated that in recent years due to population growth and the attraction of tourists and expatriates due to political conflicts and wars, has caused the investment in real estate to be in this spiral of increasing demand, real estate investment maintains a potential for growth in the short, medium and long term with an exponential projection in the return on investment.

Another advantage is that Costa Rica has favorable policies for foreign investment in real estate, which means that international investors can own and operate properties in the country with few restrictions and the same legal rights and protections as Costa Rican citizens. 

On the other hand, Costa Rica’s natural beauty and biodiversity attract a large number of tourists, which means that there is a constant demand for vacation rental properties, which could be an opportunity for real estate investors. Also, the trust system in Costa Rica may offer tax advantages for foreign investors.

In summary, some of the competitive advantages of acquiring real estate in Costa Rica are the following:

Political stability: Costa Rica is known for being a politically stable country, which means that there is less likelihood of instability or uncertainty in the real estate market.

Warm and pleasant climate: The climate in Costa Rica is warm and pleasant all year round, which makes it an attractive place to live or invest in a property.

Natural beauty: Costa Rica is known for its natural beauty, with stunning beaches, mountains, rivers and rainforests that attract tourists from all over the world. This natural beauty is also reflected in the real estate market, with properties offering breathtaking views and a tranquil setting.

Good quality of life: Costa Rica is among the countries with the best quality of life in Latin America, which makes it an attractive place to live and to invest in property.

Economic stability: Costa Rica has maintained a stable economy in recent decades, with steady economic growth and controlled inflation.

Easy access to services: Costa Rica has a well-developed service infrastructure, which means that essential services such as health care, education, and utilities are easily accessible.

Cultural diversity: Costa Rica is a very culturally diverse country, with a rich history and a wealth of cultural influences from around the world. This is reflected in the architecture and design of properties in the country.

Low cost of living: Costa Rica offers a relatively low cost of living compared to other Latin American countries, which means that it is possible to live well for less money.

Incentives for investors: Costa Rica offers incentives for investors, including tax exemptions and facilities for foreign investment.

Profitability potential: Costa Rica’s real estate market has experienced an increase in recent years, indicating that there is potential for profitability for investors.

What is the return on real estate investment?

Having outlined some of the advantages of acquiring real estate in Costa Rica, we now turn to the issue of return on investment. Although this issue should be developed based on the investor’s objectives and purposes, it should be clear that the type of asset to be acquired and the conditions under which it is acquired will allow a return on the investment in the short, medium and long term with the best benefits. 

The real estate ROI system is a financial measure used to evaluate the profitability of an investment in real estate. Basically, the return on investment in real estate is the amount of income generated by the investment divided by the total cost of the investment.

Calculating the return on investment in real estate involves considering several factors, such as the acquisition cost of the property, the cost of necessary improvements and repairs, maintenance and management costs, as well as the income generated by the property, such as rents or sales.

The return on investment in real estate is usually expressed as a percentage, and can be calculated in different ways. One of the most common ways to calculate the return on investment in real estate is through the formula of free cash flow divided by the total cost of the investment.

It is important to keep in mind that the return on investment in real estate is not the only measure to consider when evaluating the profitability of an investment in this type of asset. Other factors, such as the market value of the property, the risk associated with the investment and the inflation rate, must also be considered.

At Arista Costa Rica, we have a select multidisciplinary group of professionals, distinguished by their extensive training, experience and specialization in various areas of investment and legal and notarial advice, ensuring a service of excellence. Our group is ready to advise and accompany you in an integral way from the previous study or feasibility study of the investment until the return of the investment is obtained in the most effective way possible. 

If you need and highly skilled team, contact us!