What are the best property investments in Costa Rica?

Authored by the expert who managed and guided the team behind the Costa Rica Property Pack

Everything you need to know before buying real estate is included in our Costa Rica Property Pack

Who is the author of this content?

THELATINVESTOR

A team specialized in real estate investing in Latin American countries (Costa Rica, Mexico, Colombia, etc.).

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Costa Rica. If you'd like to learn more about us, you can check our presentation page.

What types of properties are available to invest in Costa Rica?

Costa Rica offers five main property types for investors seeking diverse investment opportunities.

Single-family houses dominate the residential market, ranging from modest homes in rural areas to luxury villas in gated communities. These properties are available in urban centers like San José and Escazú, coastal regions including Guanacaste and Puntarenas, and rural mountain areas throughout the Central Valley.

Condominiums and apartments represent the fastest-growing segment, particularly popular in beach towns like Tamarindo and Manuel Antonio, as well as urban centers. These properties often include amenities such as pools, security, and maintenance services, making them attractive to both investors and renters.

Land investments offer significant flexibility for development projects, with options ranging from small residential lots to large commercial parcels. Investors can choose between titled land with full ownership rights and maritime zone concessions for beachfront properties.

Commercial properties include office buildings, retail spaces, hotels, eco-lodges, and boutique hospitality businesses, particularly strong in tourism-focused areas and urban business districts.

Eco-friendly and sustainable homes are increasingly popular, featuring solar panels, rainwater collection systems, and sustainable building materials, appealing to environmentally conscious buyers and the growing remote worker population.

Should I buy or rent in Costa Rica if I'm looking for long-term value or returns?

Buying property in Costa Rica generally provides better long-term value and returns compared to renting, especially as of June 2025.

Property ownership offers several financial advantages including equity building, potential for appreciation, and rental income generation. The current market conditions favor buyers with increased inventory and stabilized prices following recent market corrections, creating opportunities for investors to enter at attractive price points.

Buying becomes especially advantageous for those planning to stay in Costa Rica long-term or seeking residency through property investment programs. The country's no capital gains tax policy means profits from property sales are not taxed, maximizing investment returns when compared to many other countries.

Rental yields in Costa Rica average 7.27% nationally, with higher returns possible in tourist areas and beach towns where short-term vacation rentals can generate 8-12% annual yields. This income potential makes ownership financially attractive compared to paying rent without building equity.

Renting remains preferable for those testing the market, planning short-term stays, or preferring flexibility without maintenance responsibilities, but it doesn't offer the wealth-building potential of property ownership in Costa Rica's appreciating market.

How much did properties in Costa Rica used to cost, what do they cost now, and what's the price forecast for the next 5-10 years?

Costa Rican property prices have experienced significant changes from 2023 to 2025, with varying trends across different regions and property types.

In 2023, the national average home price was approximately $877 per square meter, representing a baseline before recent market adjustments. The market experienced both growth and corrections during this period, with some luxury coastal areas seeing price increases while others faced inventory buildup.

As of June 2025, the national average has risen to about $1,021 per square meter, though significant regional variations exist. Guanacaste apartments average $2,896 per square meter due to high tourism demand, while Limón houses average $971 per square meter, reflecting more affordable inland pricing.

Recent market trends show a post-pandemic correction period where single-family home median prices dropped 30-41% year-over-year in some oversupplied areas, while prime land prices surged up to 30% in select coastal and mountain regions with development potential.

Short-term forecasts for the next 1-2 years predict 6-8% annual appreciation in sought-after coastal areas like Guanacaste and Manuel Antonio, with 4-5% growth expected in the more stable Central Valley market around San José and surrounding suburbs.

Long-term projections for the next 5-10 years suggest cumulative appreciation of 15-25% in prime markets, with eco-certified and sustainable properties expected to outperform traditional construction due to growing environmental consciousness among buyers and renters.

What are the main trends shaping the Costa Rican real estate market right now?

Six major trends are currently transforming Costa Rica's real estate landscape as we move through 2025.

Eco-friendly and sustainable development has become the dominant trend, with high demand for properties featuring green certifications, renewable energy systems, and sustainable building materials. Buyers increasingly prioritize environmental impact, driving premium prices for eco-conscious developments.

Vacation rentals and Airbnb-ready properties continue showing strong growth, especially in beach towns and tourist hotspots where short-term rental regulations have stabilized and profitability remains high for well-managed properties.

Off-grid and remote work-friendly retreats are gaining massive traction among digital nomads and remote workers seeking properties with reliable internet, co-working spaces, and sustainable power systems in scenic locations away from urban centers.

Pre-construction condominium projects offer affordable entry points for investors, featuring modern amenities and potential for price appreciation between purchase and completion, particularly in emerging coastal areas.

It's something we develop in our Costa Rica property pack.

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How exactly does the property buying process work in Costa Rica, step by step?

The Costa Rican property buying process follows six essential steps that typically take 30-60 days to complete.

Step 1 involves finding a suitable property through a licensed local real estate agent who understands regional markets and can identify properties matching your investment criteria and budget requirements.

Step 2 requires submitting a formal offer through a Letter of Intent, followed by price and terms negotiation between buyer and seller, often involving counteroffers until both parties reach agreement.

Step 3 involves signing a Purchase/Sale Agreement where both parties commit to the transaction, typically requiring a 10% deposit held in escrow by the attorney or real estate agency to secure the deal.

Step 4 encompasses the crucial due diligence period where your attorney verifies clear title, checks for liens or encumbrances, reviews property surveys, confirms zoning compliance, and conducts property condition assessments.

Step 5 consists of the closing process where both parties meet before a Notary Public to sign the Transfer Deed, with the notary responsible for registering the transaction with the National Registry.

Step 6 completes the process through final payment disbursement and official ownership transfer, with the new owner receiving registered title documents confirming legal property ownership.

What kinds of people are currently investing in property there?

Four main investor groups are actively purchasing Costa Rican real estate as of mid-2025.

Local Costa Ricans represent a significant portion of buyers, investing in primary residences, rental properties for passive income, and land for future development projects, often focusing on areas with strong infrastructure and growth potential.

Expats and retirees, primarily from the United States and Canada, are attracted by Costa Rica's stable political environment, excellent healthcare system, favorable climate, and residency options through property investment programs.

Digital nomads and remote workers form a rapidly growing segment, drawn by the country's digital nomad visa program, reliable internet infrastructure, affordable living costs, and scenic work environments that enhance productivity and lifestyle.

International investors seeking portfolio diversification are targeting Costa Rican properties for high rental yields, capital appreciation potential, and currency diversification benefits in a stable Central American market with strong tourism fundamentals.

What are strong reasons to invest in Costa Rica real estate—and what are some bad or risky reasons?

Costa Rica offers compelling investment advantages but also presents potential risks that investors must carefully consider.

Bad or risky investment reasons include speculative buying without proper due diligence, which can lead to fraud, unclear titles, or purchasing in restricted maritime zones where ownership rights are limited.

Other risky approaches involve ignoring local laws and regulations, potentially resulting in legal disputes or financial penalties, and overpaying in oversupplied luxury markets that have experienced recent price corrections.

Which types of properties can I expect to find at different budget levels?

Costa Rica's property market offers distinct options across four main budget categories, each providing different investment opportunities and potential returns.

Under $100,000 budgets typically access small houses, tiny homes, or undeveloped land in rural areas or emerging neighborhoods like Barva in Heredia province, offering entry-level investment opportunities with potential for future appreciation.

$100,000-$250,000 budgets can secure condominiums, small family homes, or development land in up-and-coming areas or less touristy regions, providing moderate investment potential with steady rental income possibilities.

$250,000-$500,000 budgets access larger family homes, beachfront condominiums, or prime development land in popular regions like Manuel Antonio or emerging areas of Guanacaste, offering strong rental yields and appreciation potential.

Over $500,000 budgets unlock luxury villas, oceanfront estates, gated community homes, or commercial properties in prime locations like Escazú, Tamarindo, or the Papagayo Peninsula, providing premium rental income and long-term value appreciation.

It's something we develop in our Costa Rica property pack.

What are the biggest mistakes people make when investing in Costa Rican property—and how can I avoid them?

Foreign property investors in Costa Rica commonly make five critical mistakes that can result in significant financial losses.

1. Inadequate due diligence represents the most costly mistake, where investors fail to verify ownership history, title clarity, and zoning compliance. Always hire a reputable Costa Rican attorney to conduct thorough title searches and property investigations before committing to any purchase.
2. Relying on verbal agreements or handshake deals leads to legal disputes and unenforceable contracts. Ensure all terms, conditions, and agreements are documented in writing and reviewed by qualified legal counsel before signing any documents.
3. Ignoring local laws and environmental regulations can result in property seizure or hefty fines. Understand property taxes, residency requirements, environmental impact assessments, and building codes before investing in any Costa Rican real estate.
4. Overlooking professional property management services leads to poor rental performance and property deterioration. Use experienced local management companies for vacation rentals or long-term rental properties to maximize returns and maintain property value.
5. Buying in restricted maritime zones without proper legal advice can result in ownership disputes or property loss. Maritime zone properties have specific concession requirements and limitations that differ significantly from fee-simple titled land ownership.

We did some research and made this infographic to help you quickly compare rental yields of the major cities in Costa Rica versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.

Which areas in Costa Rica are best for investment depending on whether I want something affordable, up-and-coming, or high-end?

Costa Rica's real estate market offers distinct investment opportunities across three main category levels, each with specific advantages and considerations.

Affordable areas like Limón Province offer the lowest entry prices but require patience for infrastructure development and market maturation, making them suitable for long-term investors comfortable with emerging market risks.

Up-and-coming regions such as the Southern Zone provide balanced investment opportunities with growing tourism infrastructure, improving accessibility, and authentic local character that appeals to both long-term residents and eco-conscious tourists.

High-end areas like the Papagayo Peninsula and Escazú command premium prices but offer luxury amenities, established tourism markets, and strong rental yields that justify higher initial investment costs for investors seeking immediate returns.

If I want to rent the property long term, which areas are best, who are the ideal tenants, what do they want, and what kind of rental income or yield can I expect?

Long-term rental investments in Costa Rica perform best in specific areas with established expat communities and reliable rental demand.

The Central Valley region, including San José, Escazú, and Santa Ana, offers the strongest long-term rental market for professional tenants, expats working in Costa Rica, and families seeking quality schools and healthcare access.

Beach towns like Tamarindo, Manuel Antonio, and Nosara attract digital nomads, remote workers, and long-term tourists seeking 6-12 month rental arrangements with modern amenities and reliable internet connectivity.

Ideal long-term tenants include American and European expats working for multinational companies, retirees seeking temporary or seasonal housing, digital nomads requiring 3-12 month stays, and local professionals in urban areas seeking quality housing with international standards.

Tenant preferences consistently include security features such as gated communities or alarm systems, modern amenities including air conditioning and updated kitchens, proximity to international schools and healthcare facilities, and high-speed internet connectivity for remote work capabilities.

Rental income expectations vary by location, with urban Central Valley properties generating 7.5-8.6% annual yields, beach town properties achieving 7-10% yields, and mountain communities producing 6-8% yields depending on property quality and location desirability.

It's something we develop in our Costa Rica property pack.

What about short-term rentals—where should I buy, what are tourists looking for, what kind of income can I expect, and what are the rules or restrictions?

Short-term vacation rentals in Costa Rica offer significant income potential in specific tourist-focused regions with established infrastructure and regulatory compliance.

Prime short-term rental areas include Guanacaste province locations like Tamarindo and Nosara, Manuel Antonio on the central Pacific coast, the Nicoya Peninsula, and Arenal region, all offering consistent tourist traffic and developed vacation rental markets.

Tourists consistently seek fully furnished properties with modern amenities, secure locations with 24/7 security or gated community access, proximity to beaches, national parks, or adventure activities, and comprehensive amenities including pools, air conditioning, and kitchen facilities.

High-season rental rates can generate exceptional returns, with prime beachfront properties earning $150-400 per night during peak season (December-April), while shoulder seasons (May-November) typically generate 60-70% of peak rates with good occupancy management.

Regulatory requirements mandate registration with the Ministry of Tourism for all short-term rentals, payment of tourism taxes ranging from 4-13% depending on property type and location, compliance with local zoning laws and fire safety requirements, and adherence to municipal licensing requirements that vary by location.

Average annual yields for well-managed short-term rentals range from 8-15% in prime locations, though success requires professional property management, marketing expertise, and consistent property maintenance to maintain competitive ratings and occupancy levels.

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.

Sources

1. RE/MAX Ocean Surf Costa Rica - Property Types
2. Costa Rica Christie's - Property Guide
3. Costa Rica Real Estate - Property Types
4. Coldwell Banker Samara - 2025 Investment Trends
5. OSA Property Management - 2025 Market Predictions
6. The Latin Investor - Housing Market Analysis
7. Costa Rica Law - 2025 Price Trends
8. Global Property Guide - Costa Rica Price History
9. Coldwell Banker - Complete Buying Process Guide
10. The Latin Investor - Foreigner Real Estate Guide