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Rental yields in San José currently range from 6.4% to 8.6% depending on property type and location, with apartments and houses offering the strongest returns as of September 2025.
Investment properties in central districts like Rohrmoser and Mata Redonda deliver gross yields between 7.76% and 8.13%, while luxury villas typically generate lower percentage returns at 6.4-7.2%. Net yields after expenses generally fall 1.5-2 percentage points below gross yields, making San José's rental market competitive compared to other Central American capitals.
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San José rental yields range from 6.4% to 8.6% with apartments delivering the best risk-adjusted returns in central districts.
Houses generate the highest gross yields at 8.6%, while luxury properties offer lower percentage returns but higher absolute rental income.
| Property Type | Gross Yield Range | Best Districts | Investment Range |
|---|---|---|---|
| Houses | 8.6% | Santa Ana, Heredia | $200,000-$400,000 |
| Apartments | 7.5-8.35% | Rohrmoser, Mata Redonda | $150,000-$250,000 |
| Condos | 7.1-8.0% | Escazú, Central Districts | $170,000-$350,000 |
| Luxury Villas | 6.4-7.2% | Escazú, Santa Ana | $400,000+ |
| Short-term Rentals | Variable | Tourist Areas | $180,000-$500,000 |
What types of rental properties are available in San José and how do their yields compare?
San José offers four main property types for rental investment, each delivering different yield profiles based on target tenant demographics and location factors.
Houses generate the highest gross yields at 8.6%, primarily because they attract families willing to pay premium rents for space and privacy. Single-family homes in districts like Santa Ana and Heredia consistently outperform other property types due to limited supply and strong demand from expatriate families working in Costa Rica's growing tech sector.
Apartments deliver solid yields between 7.5% and 8.35%, making them the most balanced option for new investors. These properties typically range from 1-4 bedrooms and attract both local professionals and international renters seeking urban convenience. The apartment market benefits from consistent demand across economic cycles, providing more stable rental income compared to luxury properties.
Condos with amenities yield 7.1% to 8.0%, appealing particularly to young professionals and digital nomads who value security features, gyms, and swimming pools. Modern condo developments in central districts command higher rents but also require higher purchase prices, resulting in moderate yield percentages.
Luxury villas and premium properties generate lower percentage yields at 6.4-7.2% but offer higher absolute rental amounts, typically attracting corporate executives and affluent expatriates on long-term assignments.
How do rental yields vary between San José neighborhoods and districts?
Rental yields in San José vary significantly by district, with emerging middle-class areas often outperforming established luxury neighborhoods on a percentage basis.
Mata Redonda delivers the highest apartment yields at 8.13%, benefiting from its central location and growing appeal among young professionals. Properties here typically cost around $155,000 for a one-bedroom unit generating $1,050 monthly rent, creating an attractive entry point for investors.
Rohrmoser offers strong yields at 7.76% while providing better long-term appreciation potential due to its established expat community and proximity to business districts. One-bedroom apartments average $170,000 with monthly rents around $1,100, attracting tenants who prioritize location over luxury amenities.
Heredia presents exceptional opportunities with yields ranging from 8.16% to 8.57%, driven by lower property prices averaging $125,000 for one-bedroom units. This district benefits from its proximity to universities and tech companies, creating consistent rental demand from students and young professionals.
Escazú yields range from 6.98% to 8.06%, reflecting the district's mixed character of luxury developments and more affordable housing options. Higher-end properties near shopping centers generate lower percentage yields but attract premium tenants, while properties in less central areas of Escazú can achieve yields above 8%.
Santa Ana delivers competitive yields between 7.5% and 8.0%, with average one-bedroom prices at $147,025 generating monthly rents around $950. This district appeals to investors seeking a balance between yield and tenant quality, as it attracts both local and international professionals.
How do yields differ based on property size and surface area?
Property size significantly impacts rental yields in San José, with smaller units generally delivering higher percentage returns while larger properties generate greater absolute rental income.
One and two-bedroom apartments consistently achieve the highest yields at 7.7% to 8.4%, driven by strong demand from young professionals, couples, and digital nomads. These compact units typically range from 50-80 square meters and represent the sweet spot for investors prioritizing cash flow over total returns.
Three-bedroom apartments around $310,000 can achieve exceptional gross yields up to 9.2% in central districts, representing an optimal balance between rental income and property price. These units appeal to small families and shared housing arrangements, maintaining high occupancy rates throughout the year.
Larger family homes and villas generate yields between 6.4% and 8.6%, with the wide range reflecting location and property quality variations. While percentage yields may be lower, these properties often command monthly rents exceeding $2,000, providing substantial absolute returns for investors with larger capital bases.
Properties below 45 square meters face rental limitations in San José's market, as most tenants prefer units with separate bedroom space. Conversely, properties exceeding 200 square meters often experience longer vacancy periods and seasonal demand fluctuations, particularly in the luxury segment.
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What is the typical total purchase price including all fees and closing costs?
Total property acquisition costs in San José range from 5% to 10% above the listed purchase price, requiring careful budget planning for accurate yield calculations.
Median apartment prices currently sit at $2,343 per square meter as of September 2025, with typical investment properties ranging from $100,000 in secondary areas to $500,000+ in premium expat districts. These base prices represent the starting point for total investment calculations.
Closing and transaction costs consistently add 5-10% to the purchase price, including lawyer fees, property registration, notary services, and transfer taxes. For a $250,000 property, investors should budget between $262,500 and $275,000 for total acquisition costs.
Legal fees typically range from 1% to 2% of the purchase price, while property registration and notary costs add another 1-2%. Transfer taxes vary based on property value but generally contribute 1-3% to total closing expenses.
Due diligence costs including property inspections, title searches, and survey work can add $2,000-$5,000 to smaller transactions, though these expenses represent crucial protections for foreign investors navigating Costa Rica's legal system.
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What ongoing taxes, maintenance, and management costs should landlords account for?
Ongoing property expenses in San José typically consume 15-25% of gross rental income, significantly impacting net yields and requiring careful financial planning.
Annual property tax represents the smallest regular expense at just 0.25% of registered property value, translating to approximately $625 yearly for a $250,000 home. This low tax rate makes Costa Rica attractive compared to many international markets.
Maintenance costs consume 1.5-2% of property value annually, covering routine upkeep, pest control, painting, and minor repairs. For a $250,000 property, budget $3,750-$5,000 yearly for maintenance to preserve rental income and property appreciation.
Homeowners' insurance premiums range from $800 to $1,500 annually depending on property value and coverage levels. Properties in areas prone to natural disasters may face higher premiums, particularly for comprehensive coverage including earthquake and flood protection.
Condominium and luxury development HOA fees range from $100 to $500 monthly, covering shared amenities, security, landscaping, and building maintenance. These fees directly reduce net rental income but often justify higher rental rates from tenants valuing amenities.
Property management services typically charge 10-15% of rental income for tenant screening, rent collection, maintenance coordination, and legal compliance. Self-managing landlords can eliminate this cost but must invest significant time in property oversight and tenant relations.
How do mortgage rates and financing options impact net rental yields?
Current mortgage rates in San José range from 5.88% to 6.99% APR for 30-year fixed loans, reducing net yields by approximately 2-3 percentage points for leveraged investments.
Residential mortgage financing allows down payments as low as 5-10% for properties up to $1,209,750 under jumbo loan programs, enabling investors to leverage their capital across multiple properties. However, lower down payments result in higher monthly payments and reduced cash flow.
Financing costs significantly impact net yields, particularly on high loan-to-value transactions. An 80% LTV mortgage on a property generating 8% gross yield typically reduces net yield to 5-6% after accounting for interest payments, insurance, and financing fees.
Interest-only mortgage options may be available for certain investment properties, improving short-term cash flow while building equity through property appreciation rather than principal payments. These products suit investors prioritizing immediate yield over long-term equity building.
Foreign investors may face additional requirements including larger down payments, higher interest rates, or requirements for local income verification. Working with experienced mortgage brokers familiar with international client needs proves essential for securing favorable financing terms.
What are the average rents for short-term versus long-term rentals?
Long-term rental markets in San José currently favor investors seeking stable yields, while short-term rentals face new regulatory challenges affecting profitability.
Long-term lease rates as of September 2025 average $2,500 for studios, $2,934 for one-bedroom units, $3,506 for two-bedroom apartments, and $4,373 for three-bedroom properties. These rates provide predictable monthly income with minimal vacancy risk in desirable neighborhoods.
Short-term rental properties generate average annual revenues of $22,019 through platforms like Airbnb, with nightly rates averaging $170 and occupancy rates around 48%. Prime vacation rental locations can command $460 per night with occupancy rates reaching 56-70% during peak seasons.
New VAT regulations implemented in 2025 impose a 13% tax on short-term rental income, significantly impacting net yields for Airbnb and similar platforms. This tax applies to properties rented for less than 30 days, making long-term leases more attractive from a tax perspective.
Short-term rentals require substantially higher management intensity, including guest communication, cleaning coordination, and maintenance of furnishings and amenities. These operational demands often consume 25-35% of gross income compared to 10-15% for long-term rental management.
Seasonal demand variations affect short-term rental performance, with peak tourist seasons generating higher rates but shoulder periods experiencing significant occupancy drops and rate reductions.
Can you provide specific rental yield examples for different property types?
| Property Type | Purchase Price | Monthly Rent | Gross Yield | Net Yield (Est.) |
|---|---|---|---|---|
| 2BR House - Santa Ana | $280,000 | $2,000 | 8.6% | 6.8% |
| 1BR Apartment - Rohrmoser | $170,000 | $1,100 | 7.8% | 6.1% |
| 2BR Condo - Escazú | $225,000 | $1,500 | 8.0% | 6.2% |
| 3BR Villa - Luxury District | $450,000 | $2,700 | 7.2% | 5.4% |
| Studio - Central San José | $120,000 | $850 | 8.5% | 6.7% |
| 3BR Apartment - Heredia | $195,000 | $1,400 | 8.6% | 6.9% |
Who are the main tenant demographics and what do they typically seek?
San José's rental market serves five distinct tenant segments, each with specific preferences driving rental demand and yield potential.
Tech professionals and expatriate families represent the highest-value tenant segment, preferring condos and houses in secure areas like Escazú, Rohrmoser, and Santa Ana. These renters prioritize security features, reliable internet, proximity to international schools, and access to modern amenities, often accepting premium rents for quality properties.
Young singles and couples form the largest rental demographic, seeking one and two-bedroom apartments in central, walkable neighborhoods with access to restaurants, nightlife, and public transportation. This segment drives consistent demand for moderately-priced units in emerging districts.
Digital nomads and remote workers require furnished short-term rentals with high-speed internet, flexible lease terms, and proximity to coworking spaces or cafes. This growing segment supports both traditional and Airbnb-style rental models, often paying premium rates for convenience and flexibility.
University students and young professionals create steady demand for affordable housing near educational institutions and major employers. These tenants typically accept smaller units and shared accommodations in exchange for lower rents and convenient locations.
Tourist and vacation rental guests seek luxury amenities, prime locations, and unique experiences, supporting higher nightly rates but requiring significant management investment and dealing with seasonal demand fluctuations.
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What are current vacancy rates and how do they vary by property type and area?
Vacancy rates in San José remain exceptionally low at around 10% in top districts, indicating strong rental demand and limited supply in desirable neighborhoods.
Apartments in central districts experience the lowest vacancy rates due to consistent demand from young professionals and small families. Properties in Rohrmoser, Mata Redonda, and central Escazú typically maintain occupancy above 90% throughout the year.
Single-family houses face slightly higher vacancy periods during tenant transitions but generally achieve strong long-term occupancy once rented to family tenants who tend to stay longer than apartment renters. Houses in family-friendly districts like Santa Ana and Heredia experience minimal seasonal vacancy fluctuations.
Luxury properties and premium villas face the highest vacancy risk, particularly during economic uncertainty or seasonal downturns. These properties may experience 15-25% vacancy rates as the tenant pool is limited and rent levels are sensitive to economic conditions.
Short-term rental properties experience significant seasonal variations, with peak occupancy during Costa Rica's dry season (December-April) and notable drops during rainy season months. Annual occupancy rates for well-managed short-term rentals average 48-60% depending on location and property quality.
Properties priced above market rates or lacking modern amenities face extended vacancy periods regardless of location, emphasizing the importance of competitive positioning and property maintenance for maximizing rental income.
How do you calculate rental yields from gross income to net returns?
Rental yield calculations in San José follow a systematic approach from gross rental income through various expense deductions to arrive at net investment returns.
Gross yield calculation starts with annual rental income divided by total property purchase price including closing costs. For example, a $200,000 property generating $1,200 monthly rent produces a gross yield of 7.2% ($14,400 annual rent ÷ $200,000 purchase price).
Operating expense deductions typically reduce gross yields by 1.5-2 percentage points, including property taxes (0.25% annually), maintenance costs (1.5-2% of property value), insurance premiums ($800-$1,500 yearly), and property management fees (10-15% of rental income).
Vacancy allowances should account for 5-10% income reduction even in strong rental markets, as tenant transitions, maintenance periods, and seasonal fluctuations affect cash flow predictability.
Financing costs significantly impact leveraged properties, with mortgage interest, PMI, and loan fees reducing net yields by 2-3 percentage points on typical 80% LTV investments. Cash purchases eliminate financing costs but require larger capital investments.
Net yield calculation factors all expenses: Net Yield = (Annual Rent - Operating Expenses - Financing Costs - Vacancy Allowance) ÷ Total Investment. This final metric represents the actual cash return investors can expect from their San José rental properties.
What are the smartest property investment choices based on current market trends?
Three-bedroom apartments priced around $310,000 in central districts currently offer the optimal balance of yield potential and market demand, generating gross yields up to 9.2%.
Townhouses and condos in emerging family districts present the strongest growth prospects, benefiting from San José's expanding tech sector and increasing expatriate population seeking family-friendly housing options.
City center apartments near major employers and transportation hubs provide the most stable rental demand, particularly moderate-sized units appealing to young professionals and couples who form the largest tenant demographic.
Properties requiring minor renovations or updates in established neighborhoods offer value-add opportunities, allowing investors to increase rents and property values through strategic improvements while benefiting from below-market purchase prices.
Avoid luxury villas and premium properties unless seeking absolute returns over percentage yields, as these properties face longer vacancy periods, higher maintenance costs, and limited tenant pools during economic downturns.
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How have rental yields and property values changed over recent years?
San José rental yields have strengthened from approximately 7.3% in Q3 2024 to 7.84% in Q2 2025, reflecting improved rental income growth outpacing property price appreciation.
Property prices increased 12% year-over-year as of June 2025, driven by foreign investment, tech sector growth, and limited inventory in desirable districts. This appreciation rate exceeds historical averages but remains sustainable given underlying economic fundamentals.
Rental rates rose 2-3% annually over the past year, though increased housing supply in some areas may create downward pressure on rents in oversupplied segments. Premium properties experienced stronger rent growth than entry-level units.
Five-year property appreciation averaged 4-6% annually, providing solid total returns when combined with rental yields. This appreciation rate reflects Costa Rica's stable political environment and growing appeal to international investors and residents.
The vacation rental market expanded 24% since 2020, driven by pandemic-related remote work trends and Costa Rica's appeal as a lifestyle destination. However, new tax regulations may moderate this growth going forward.
What are the expected yield forecasts for the next 1, 5, and 10 years?
One-year yield forecasts predict stabilization between 7.8% and 8.6% for urban rental properties, supported by continued economic growth and steady rental demand from tech sector expansion.
Five-year projections suggest yields will remain in the 8-9% gross range (6.5-7% net) driven by San José's projected urban population growth and sustained demand from international businesses establishing Costa Rican operations.
Ten-year yield expectations depend heavily on broader economic cycles and potential regulatory changes, though Costa Rica's positive demographic trends and political stability support continued investment attractiveness for international property investors.
Risk factors that could impact future yields include changes to foreign investment regulations, significant economic downturns affecting expatriate employment, or major shifts in remote work policies reducing demand for premium rental properties.
Technology sector growth and Costa Rica's positioning as a regional business hub suggest continued strong fundamentals supporting rental property investment returns over the medium to long term.
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How do San José yields compare with other major cities in the region?
San José delivers competitive gross yields of 8.25-8.6% for urban properties, significantly outperforming major US cities where comparable properties typically yield 5-6%.
Within Costa Rica, San José yields remain competitive with coastal markets like Tamarindo (7-10% yields, up to 17% for premium properties) and Nosara (7-9% for eco-luxury properties), while offering greater market stability and liquidity.
Jaco's vacation rental market generates 6-8% yields but faces higher seasonal variability compared to San José's more stable urban rental demand from local and expatriate professionals.
Heredia, part of the greater San José metropolitan area, offers exceptional yields at 8.37% while benefiting from university and technology company presence creating consistent rental demand.
Compared to other Central American capitals, San José provides above-average yields with superior legal protections for foreign investors, stable currency, and established expatriate communities supporting rental demand across economic cycles.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
San José's rental property market offers attractive yields for investors seeking both income and appreciation potential in a stable Central American market.
The combination of growing tech sector employment, favorable foreign investment laws, and limited housing supply in prime districts supports continued strong rental demand and competitive yields for well-positioned properties.
Sources
- The Latin Investor - San José Real Estate Market
- The Latin Investor - Costa Rica Housing Market
- The Latin Investor - San José Property
- Global Property Guide - Costa Rica Rental Yields
- The Latin Investor - Costa Rica Real Estate Forecast
- Costa Rica Law - Real Estate Market Prices 2025
- The Latin Investor - San José Price Forecasts
- Select Commercial - San José Commercial Mortgage