Over the past few years, Costa Rica’s real estate market has experienced a significant upturn, driven by a growing number of investors opting to purchase properties for rental purposes. In fact, between 2017 and 2024, the average value per residential real estate went from 153.40 thousands of dollars to 196 thousands.
This trend reflects the country’s attractiveness as an investment destination, emphasized by different advantages.
Costa Rica Advantages
Favorable economic and politic environments
Indeed, Costa Rica offers a stable political environment as well as a stable and growing economy, thus providing a reliable framework for business operations and property ownership.
Good healthcare system
Costa Rica boasts a good healthcare system, renowned for its quality and accessibility, which contributes to an overall high quality of life for residents and investors.
Flourishing tourism industry
Another key factor of Costa Rica’s demand in the real estate market is its thriving tourism industry. As the country’s leading economic sector, tourism creates demand for vacation rentals all year, especially in touristic locations such as the Pacific coast.
Advantageous policies
Costa Rica’s government has implemented various incentives for real estate development projects in order to attract foreign investment, including tax breaks for real estate development projects. These incentives not only encourage investment but also create economic growth and jobs, benefiting both investors and local populations.
Eco-friendly reputation
Furthermore, the eco-friendly reputation of the country also attracts people willing to live closer to nature and to buy sustainable properties.
Overall, the combination of all these advantages underscores Costa Rica’s expanding appeal as a destination for real estate, particularly attracting investors, expatriates, and retirees. Indeed, analysts expect the Costa Rican residential real estate market to exhibit a compound annual growth rate of 2.35% from 2024 to 2028.
The Downside of Managing Properties
Although owning and renting a property has numerous benefits, there are also potential difficulties and drawbacks. In fact, the responsibilities involved in property ownership and management can be time consuming and may even become overwhelming.
Managing tenants
Finding quality tenants that you can trust your property with can be a long process. To properly manage this step, you must invest your time and energy.
In case of short-term rentals, landlords also have to constantly take care of arrivals and departures of guests, ensuring they are welcome properly and making sure the accommodation is in good condition when they leave it.
Vacancies
Another difficulty that owners are likely to face while renting their property is the absence of tenants. Indeed, it can be difficult to attract tenants, particularly when the owner lacks the time or expertise to effectively promote their property.
Property Maintenance
The biggest work still resides in the property maintenance. Taking care of a property requires a lot of time and energy, particularly in the absence of hiring external help. Owners must dedicate themselves to tasks such as gardening, cleaning of the space, and even undertaking repairs when necessary.
Managing a Property Remotely
It gets even more complicated for people who live far from their property, or even abroad, as distance makes it difficult to supervise various tasks effectively and thus creates obstacles to good property management.
Narrow oversight
Being far away from your property makes property management complicated. In fact, distance prevents the landlords from properly monitoring tenant behavior, property conditions and maintenance issues.
Lack of immediate response to emergencies
In case of any emergency or security incidents, landlords residing away from their property do not have any immediate power of action, which can lead to uncomfortable or even dangerous situations for tenants and also property damage.
Legal issues
Landlords have to comply with the local laws and policies concerning rental real estate, even if they live in a different country, which means that they have to keep themselves updated on the potential legal changes. In this regard, managing from a distance is increasing the risk of encountering legal issues.
Obstacles to communication
Various factors associated with living far away can affect the communication between the landlord and the renters such as time zone differences or language barriers. Having to communicate solely via electronic devices also alter the experience for both landlord and tenants, as it lacks the genuine human connection usually present in face-to-face interaction.
Why Hire a Local Property Manager?
One solution to go through all of these processes and avoid the difficulties mentioned is to reach out to a local management company. Choosing such a company to help you will indeed take a lot of responsibilities off your shoulders while ensuring a good functioning of your rentals by presenting several advantages.
Local network
Local management companies have an extensive contact network in the area they are working in, allowing them to ensure a selection of skilled professionals to work on your property, whether it is gardeners, cleaners, or other service providers.
Knowledge of the market
Local management companies are implanted in the area and have in-depth knowledge of the market, and thus can help you maximize your rentals and incomes.
Legal conformity
Having a local management company by your side is a perfect way of ensuring that your activity is complying with every legal requirement, sparing you the need to constantly track updates or modifications in laws or policies regarding your activities.
Peace of mind
Last but not least, entrusting your business to a local management company allows you to relax, as you are assured that all aspects are being taken care of by on-site professionals who can contact you in case of any problems.
How to Find a Local Property Management Company
Now the crucial step is to find the right local property management company, taking into account your expectations and your property goals.
One company that has made a name for itself on the Pacific coast is High Vibe Management, serving regions from Jacó to Uvita, thus including tourist areas such as Playa Hermosa and Playa Esterillos. This versatile enterprise, created by Nicholas Tomeo, revolves around 5 main areas which are Property ownership, Property management, Relocation services, and Vacation home/Concierge services.
If you are interested in delving into the potential investment opportunities within this market and seek a deeper understanding, do not hesitate to reach out to High Vibe Management at [email protected]
Bibliography:
https://www.statista.com/outlook/fmo/real-estate/costa-rica#analyst-opinion
https://thelatinvestor.com/blogs/news/costa-rica-buy-property
Maïna Couturieux
