Buying a property in San José: a complete guide

All sources have been thoroughly verified for credibility. Furthermore, a local real estate expert has reviewed and approved the final article. 

Yes, the analysis of San José's property market is included in our pack

Considering buying real estate in San José? You're not alone!

Many people are drawn to San José's urban amenities and fantasize about owning a modern apartment or a stylish townhouse there.

Does it make sense, though? Are property prices increasing in San José? How much does it cost? Should you consider investing in Escazú or Barrio Amón? Is there any hidden tax? Can I get a very good rental yield? Where?

We have all the answers you need.

At TheLatinvestor, we know this market like the back of our hand. Actually, we've gathered all our findings in a pack. Get it now.

In this article, get ready to receive valuable insights from us.

How is the property market in San José?

Is the property market doing well or poorly? People disagree. Instead of listening to opinions, we prefer to look at data and stats to find the real answers.

Property types

In San José, there are various types of properties for sale to meet different needs.

These include single-family homes with their own yards, condos or apartments in multi-story buildings, townhouses with shared walls and amenities, and vacant land where you can build your own custom home.

Additionally, there are commercial properties like shops and offices available for sale.

Whether you're looking for a cozy home, a convenient apartment, a low-maintenance townhouse, a piece of land to develop, or a business space, San José offers a diverse range of property options to choose from.

Buying or renting?

(If you're purchasing for personal use and not for renting)

If San José is your city of choice, you might be considering whether it's better to buy a property or opt for renting in this vibrant capital of Costa Rica.

Usually, buying is better than renting in San José due to the city's strong economy and high property values.

On the other hand, if you value flexibility, renting might be the better choice.

Property prices in San José

On average, according to the last reported data from Central Bank of Costa Rica, buying a property in San José would cost you around $2,400 per square meter.

It's just an average. The value of a square meter for a house in San José city center might differ from a suburban property. You'll get a more detailed in our pack for buying property in San José and in Costa Rica.

To give you some context, it means that, instead of purchasing a flat in Manhattan, you can obtain 6 properties in San José.

Also, housing prices in San José are 35% cheaper than in Guanacaste (Costa Rica).

The most upscale neighborhoods in San José are likely Escazú, Santa Ana, and Rohrmoser, known for their luxurious homes and amenities. In contrast, more affordable areas in San José include neighborhoods like Hatillo, San Sebastián, and Pavas.

Trends

First and foremost, we have to acknowledge that Costa Rica remains, today, a very stable country. The last Fragile State Index that has been reported for this place is 41.

Keep this in mind when thinking about the possibility of buying a property in San José.

Besides that, if we look at the IMF's GDP forecasts, Costa Rica's economy is expected to soar by 14.1% in the coming 5 years, resulting in an average GDP growth rate of 2.8%.

If you want to invest in real estate in San José it's a good thing because individuals are becoming wealthier, leading to a probable rise in housing prices.

Also, in Costa Rica, the average GDP per capita has changed by 7.2% over the last 5 years. It's a solid number.

This data is a positive signal - housing prices in San José might soar in 2024 and after that.

Looking for more updated data? We've done a big-picture study to find out if it's a good idea to purchase property in Costa Rica right now.

Buying property in San José

It can be difficult to buy property in San José due to the difficulty in obtaining reliable and up-to-date information about the market. That's why we have created the pack to buy property in San José and in Costa Rica.

Buying process

In the pack of documents we have built, we've covered everything about buying a property, from the contacts you'll need to the taxes that need to be paid, and even where to look for available properties.

Now, we're presenting a simpler version to make it easier for you to understand and follow along.

This is the step-by-step process to purchase a property in San José:

1. Define your budget and property requirements.
2. Research the real estate market and neighborhoods in San José, Costa Rica.
3. Obtain pre-approval for a mortgage (if needed) from a Costa Rican bank.
4. Engage a licensed Costa Rican real estate agent.
5. View properties and make offers, taking into account local laws and regulations.
6. Negotiate the terms and price with the seller, considering Costa Rican customs.
7. Hire a professional home inspector experienced in San José properties.
8. Review and sign the purchase contract, which must be in Spanish.
9. Secure financing or payment arrangements through a Costa Rican financial institution.
10. Complete the property title search and due diligence, considering local land registry systems.
11. Attend the closing with a Costa Rican notary and finalize the transaction.
12. Transfer ownership and receive the keys to your new property, adhering to Costa Rican property transfer protocols.

Also, if you're not from the country, you might want to check our article on how to buy property as a foreigner in Costa Rica.

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Where to find a property

If you're looking for properties in San José, these websites can assist you:

• Costa Rica si - Costa Rica Si Real Estate offers a variety of outstanding properties for sale in Costa Rica, including homes, condos, lots, and commercial properties.
• Zucaes Real Estate - Specializing in properties in Costa Rica, Zucaes Real Estate offers a comprehensive selection of homes, rentals, and condos in various areas of San Jose.
• Costa Rica 1 Realty - A real estate agency in San José that provides property sales and rentals. They offer comprehensive assistance and a wide range of options in the western area of the city.
• Real Estate Costa Rica MLS - Offering a diverse range of residential and commercial real estate listings, including homes, condos, land, and luxury properties.
• RE/MAX - A reputable real estate agency specializing in properties in the Playa Jaco and Central Pacific Costa Rica area.

Also, know that we have included contacts of real estate agencies, property lawyers, moving companies, expats communities and more in our pack for buying property in Costa Rica.

What you can get

As mentioned before, the average price per sqm in San José is $2,400. A 1-bedroom property with an area of 60 square meters would cost approximately $144,000, and a 2-bedroom property with an area of 85 square meters would cost approximately $204,000.

Of course, the price of properties can be influenced by their qualities and the area they're in.

Top neighborhoods in San José will come with higher price tags. A condominium in Escazú might cost you around $280,000, while a house in Santa Ana could be priced at $420,000.

Some spots will be friendlier to your wallet. You could find a property in San Sebastián for $110,000, or you may encounter one in Hatillo priced at only $90,000.

We give a more detailed pricing list in our full pack for buying property in Costa Rica.

Common mistakes

Here are the main pitfalls specific to buying a property in San José, Costa Rica:

• Foreign ownership restrictions: Certain properties may have limitations on foreign ownership, requiring careful consideration and legal advice.
• Complex property laws: Costa Rican real estate laws can be intricate, demanding expert guidance to navigate potential pitfalls.
• Ecological restrictions: Properties near protected areas may face building restrictions, impacting development plans.
• Infrastructure issues: Some areas lack proper infrastructure, affecting accessibility and property value.
• Water rights: Water availability and rights can pose challenges, especially in rural locations.
• Land use changes: Zoning alterations may affect your property's future use and value.
• Title security: Ensuring clear and undisputed title can be complex, requiring thorough due diligence.
• Capital gains tax: Understanding Costa Rican tax laws is essential to avoid unexpected tax liabilities.

We don't want this to happen to you, so we have included a full checklist for your property investment in our pack of documents. Avoid these mistakes and save a lot of money.

Everything you need to know is included in our Costa Rica Property Pack

Living in San José

Living in San José, Costa Rica, provides a unique experience, blending a vibrant urban lifestyle with rich cultural heritage.

The city offers a diverse range of cultural events, entertainment options, and economic opportunities, set against the backdrop of Costa Rica's stunning natural beauty.

Cost of living

The cost of living in San José, Costa Rica, offers a balance between affordability and access to amenities. While it may be higher than some other areas in Costa Rica, it remains considerably lower than major North American cities like San Francisco and New York.

Here are some examples to better understand the cost of living in San José, Costa Rica:

• Tamarindo juice: $3 at a local soda in Barrio Amón.
• Rent for a one-bedroom apartment in Escalante neighborhood: $800/month.
• Casado (traditional Costa Rican meal) dinner for two at Soda Tapia: $30.
• 1.5-liter bottle of Imperial beer: $2 at a supermarket.
• Electricity bill for an 85m² apartment using ICE (Instituto Costarricense de Electricidad): $90/month.
• Monthly membership at Gold's Gym in San Pedro: $70.
• Ticket to a movie at Cine Magaly: $10.
• Salsa Lizano (a popular Costa Rican sauce): $3 at a grocery store.

Neighbourhoods

We want to show information in an easy-to-understand way. So, we made a table that shows the different areas in San José. For yields, prices and rents, check our property pack.

Life in San José

San José, Costa Rica's capital city, is a vibrant and bustling metropolis, known for its rich cultural heritage, dynamic economy, and as a political center of the country. The city attracts a diverse range of businesses, including thriving local enterprises and international firms, contributing to its varied economic landscape.

Expatriates often appreciate San José for its combination of urban life and proximity to Costa Rica's natural wonders. The city offers easy access to stunning landscapes, from lush rainforests to majestic mountains, providing ample opportunities for outdoor activities like hiking and nature exploration.

Additionally, San José's lively cultural scene, diverse cuisine, and vibrant nightlife add to its appeal.

For those interested in real estate investment, San José's well-developed public transportation network, including an extensive bus system and plans for modern urban mobility solutions, enhances the city's connectivity and accessibility.

Healthcare in San José is notable for its high standards, with numerous reputable hospitals and clinics offering a wide range of medical services.

This network provides both locals and expatriates with access to excellent healthcare facilities.

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Renting out in San José

This section is for you if you want to buy property solely for renting out and earning income.

Long-term

Tenant Profiles in San José

If you're considering buying property in San José, Costa Rica, for long-term rental purposes, your target tenants could include professionals, students, and retirees. San José, as the capital city, hosts several universities and educational institutions, making it an attractive location for students and academic professionals.

Additionally, its growing business sector appeals to young professionals working in various industries.

The city's rich cultural heritage, peaceful neighborhoods, and pleasant climate also make it a favored destination for retirees seeking a tranquil lifestyle. Thus, properties in San José can cater to a diverse tenant base, from students and young professionals to the senior community.

Here is a little summary table we've made for you.

Rental yields

Nowadays, San José offers some opportunities in terms of rental yields. Actually, you can easily achieve 7 or 8% due to the high demand for rental properties in the city.

Single-family homes in the central areas of San José, Costa Rica, often yield high rental returns, thanks to the strong demand for properties near the city's abundant amenities and attractions.

Locations close to key business districts and commercial centers, where various multinational and local companies are situated, also tend to offer higher rental yields. These areas are appealing for professionals who wish to live near their workplaces and enjoy the convenience of urban living.

Therefore, properties in and around these bustling parts of San José are attractive for real estate investment due to their potential for lucrative rental income.

For further explanation and a more detailed breakdown, you can check the reports and analyses we have made.

Finally, be aware that rental incomes in San José are taxed at 15%, which is not much.

Short-term

You could also decide to rent short-term to business travelers, students, or tourists staying in San José for a short period of time. Additionally, you could rent to locals looking for a temporary place to stay while they search for a more permanent residence.

If you decide to go with that option, look for properties in the downtown core, near Sabana Park, or in the Escazú area. These areas are popular with tourists and have a high demand for short-term rentals.

Currently, there are approximately 2,065 active Airbnb listings in San José, reflecting a highly dynamic and bustling short-term rental market. The average daily rate stands around $63.

You have the opportunity to generate a nice additional income stream then. According to online testimonials and analytics platform like AirDNA, Guesty and Inside Airbnb, people who offer short-term rentals in San José can make around $700 per month. Also, the average occupancy rate is estimated at 52%.

Is it worth buying real estate in San José then?

Buying a property in San José, Costa Rica, can be a fantastic idea for those looking for long-term stability and potential financial gains. If you plan to settle down, invest, or retire in San José, owning property offers security and equity-building opportunities. The city's strong economy, diverse tenant pool, and promising GDP growth rate make it an attractive location for real estate investments.

Rental yields are high, especially in the downtown area, providing a steady income stream for investors. With a stable political and economic environment, Costa Rica is considered a safe bet for property appreciation over time.

However, if you're a short-term resident, prioritize flexibility, or have an uncertain financial situation, buying may not be the best choice. Renting can offer convenience and cost-effectiveness for those with temporary plans, while avoiding the financial commitment and responsibilities of property ownership.

Additionally, navigating the complex property market in San José may require local expertise, and foreign ownership restrictions can impact your ability to buy certain properties.

In conclusion, buying a property in San José can be a smart move for those seeking long-term stability and investment potential, but it's crucial to align your decision with your specific goals and circumstances.

Make sure you understand the real estate market in San José

Don't rush into buying the wrong property in Costa Rica. Sit, relax and read our guide to avoid costly mistakes and make the best investment possible.

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The content provided here is for informational purposes only and does not imply endorsement or advice. While we strive for accuracy, we do not guarantee the completeness or reliability of the information, including text, images, links, or other elements in this material. Following the content and analyses presented here does not assure specific outcomes. For guidance tailored to your individual circumstances, it is recommended to consult with a professional, such as a lawyer, accountant, or business advisor.