Is real estate in Costa Rica a good investment?
The short and right answer is yes. Costa Rica is a safe and beautiful country, with a stable democracy, a growing economy and plenty of other advantages that make it a really good place to invest.
The following is a guide that will help you understand why real estate in Costa Rica is a good investment.
Costa Rica Expat Real Estate Guide
We Will begin with the basics: an introduction to Costa Rica’s economic and housing situation, we will then go over areas where investing is not only safe but sound, a short analysis on property values, and then even going over the safest and most affordable way to bukd a house there in case you decide to take that route.
Costa Rica’s Economic Situation In 2024
Costa Rica, the land of “Pura Vida”, which literally translates to “pure life”. This motto is used in different contexts, but it boils down to enjoying life as it comes. That’s the source of Costa Rica’s special aura, but there’s even more about it that should interest you.
Often described as the world’s “happiest country”, Costa Rica offers a life changing experience. It holds a unique status with over 4% of the world’s biodiversity in just 0.3% of the global landmass. This Central American gem caters to a diverse range of people, from surfers riding fabulous waves on it Pacific and Caribbean coasts, to bird watchers and fishing aficionados. 75% of international visitors are accounted as tourists, representing 8% of the country’s GDP and supporting over 15% of its employment.
Beyond tourism, Costa Rica’s stable democracy, having no army, a well-educated, bilingual work force and population have made it an attractive hub for multinational companies such as Intel or Amazon.
Just on the first 6 months of 2023, multinational companies have invested almost USD 2 Billion in the country. The land of “Pura Vida” has been enjoying life on all fronts.
This has led to Costa Rica being ranked as the number 1 country in the world in Foreign Direct Investment (FDI) according to the size of its economy, recently enjoying investments from strong growing companies such as:
It’s clear that Costa Rica’s economy is growing in a stable manner, focusing on technical and specialized labor with higher salaries.
As a matter of fact, the OECD expects for Costa Rica’s GDP to grow by a 3.5% in 2024 and a 2.6% in 2026. The IMF is projecting inflation to stay in the limit of a 3% in 2025, which is viewed as moderate and stable. The companies listed above are making huge investments in the country, and many more are coming, such as Jonhson & Johnson, which will further strengthen the economy and the future of the country.
What about real estate? Well, with tourism being an evergreen and ever growing sector, the rental yields in the country range from 5% up to 8%. The property prices are expected to keep on growing at a stable and safe rate, and the demand for residential real estate from international buyers keeps growing and isn’t expected to stop.
Add to that a very safe and stable country and democracy, and you got yourself a very, very safe and smart investment.
Best Real Estate Investment In Costa Rica
What is the best place to invest in Costa Rica? As of 2024, it’s the Guanacaste province.
Guanacaste is a province on the north of the country, only a 3.5-hour drive from San José, the country´s capital city. Guanacaste is mostly known for its pristine beaches, forests, world class fishing, zip lining, scuba diving, waterfalls, hot springs, delicious food, and the warmth of its people.
Thanks to the healthy lifestyle and the access to high quality medical care in the province, 1 out of 5 blue zones in the world is in Guanacaste, where life expectancy is 85+ years.
That’s not the only great thing about Guanacaste. In recent years the province has flourished, leveraging the fact that over 75% of Costa Rica’s international visitors prefer beach travel, and standing out as Costa Rica’s top tourist destination.
As a matter of fact, tourism in Guanacaste has had one of the fastest post pandemic recoveries in the world. International arrivals to LIR surpassed those of 2019 by 2022, year on which they increased 70% compared to 2021, and in January through September 2023 arrivals have already increased over 14% vs 2022. Tourists arriving to Guanacaste stay for an average of 13.5 nights and their average spending per trip has been growing at a rate of 8% YoY over the last 8 years.
Of course, there are other very safe and stable areas too, such as Escazu or Santa Ana, which are in the San José province, where the capital city is located. Both “cantones” (districts), are amongst the wealthiest in the country, with quick access to world class hospitals and healthcare, all the amenities you can imagine, and quite good public transportation and roads.
Where To Invest In Guanacaste?
Most people will tell you about towns such as Tamarindo, Flamingo or Santa Teresa. If you actually go to these three places for a short visit, you’re likely to fall in love. Santa Teresa is an exotic surf town where all the rich and famous have mansions, from Jack Dorsey to Tom Brady. However, the access and amenities are deficient.
Tamarindo is another surf town which developed exponentially over the past 10 years, with a surge of apartment buildings, hotels and commercial developments. However, the access to the town leaves a lot to be desired, and the busy and loud nightlife can be discouraging.
Flamingo is a luxurious beach town, with a newly inaugurated marina, white sand and great hotels. Nonetheless, it also has a difficult access (a road usually with a lof of traffic jams) and as of 2024 the access to water (the permits the government gives out to have water in your property) is scarce and taking a lon, long time to be able to get it. That has become an issue for developers in the area.
That’s why a recommended area is Playa Negra.
Playa Negra, a surfer’s haven in the heart of Guanacaste, Costa Rica—a gem of tranquility, safe community living, and pristine nature. “Negra” (as locals call it) is a laid-back town, where you unwind, savor local delicacies, ride pristine beach waves and enjoy with family and friends. Yet, you’re a short 20-minute drive from busier towns like Tamarindo, 30 minutes from top-notch healthcare at Metropolitano Hospital, and premium education in Huacas.
The town’s population is comprised by friendly locals and expatriates who have shaped a safe and welcoming community. It’s a calm, relaxing surf town, that hasn’t been exploited by tourism, yet it still attracts enough people thanks to the great restaurants and hotels in the area. Demand is growing, and AirBnBs are scarce. It’s a great place to live or invest.
Cheapest Way To Build A House In Costa Rica
It’s likely that you will want to buy property that is already built or on the process of being built. Usually that results in the cheapest solution, because if you’re not a local and don’t have the time to be monitoring the construction site, then it’s likely it’ll become more expensive down the line.
Nonetheless, if you decide you want to build a house, the cheapest way to build a house in Costa Rica is by hiring a local and reputable construction company. Depending on the area of the country, there will be local construction companies that will offer better quotes. However, one of the mot affordable and fastest construction styles is steel framing, with one particular company called Bildtek being perhaps the best in all of Costa Rica.
Property Values In Costa Rica
Property values in Costa Rica are expected to continue growing by 2025. The tourism is growing, demand for real estate is growing, and the amount of expats coming into the country is growing. Therefore, property values are expected to rise, and if you buy in 2024, you get some perks:
- Inflation is expected to rise by close to 3% in 2025, buying now gets your money’s worth today
- Rental yields have been stable over the past two years, and with growing tourism, the demand is likely to increase them even more
- Property values are expected to rise over the next two years
Is Buying Property In Costa Rica A Good Investment?
Buying property in Costa Rica is a smart and safe investment. Not only is the Costa Rican economy growing, with enormous investments from companies such as Amazon and Intel, but the democracy is stable, and the country is safe compared to the region’s standards. Property prices are projected to grow in the coming years, alongside tourism and demand for short term rentals such as AirBnbs.
All these factors combined mean that investing in real estate is likely going to make you money either by the property price increasing, or my getting back your investment from long term and short term rentals.
If you’re thinking on investing and moving there, then you can have the peace of mind you’re buying property in a safe country, with no army, peaceful people, with high levels of education, a growing GDP per capita, which are mostly bilingual