Pros:

• Security and sense of community with other vacationers or expats
• Shared cost of upkeep and management makes it economical
• Easy to move in and typically features up-to-date amenities
• Often include modern conveniences like pools, seating areas, and access to public transportation
• Restrictive in terms of rules, policies, and decor
• Shared spaces may impact sense of freedom
• Less privacy than other living options

Buying Land in Costa Rica as a Foreigner

Buying land in Costa Rica gives you the opportunity to build a home or business from scratch. This option offers potentially spectacular views, provides an unmatched sense of pride and accomplishment, and represents the type of property ownership that you can potentially leave behind in a will or living trust. With the right architect, engineers, and contractors, you can include any amenities you want (such as swimming tools, golf or tennis courts, patios, and balconies). However, it is almost certain that you will also need a legal advisor to help comply with municipal, provincial, and federal laws. You will also need to work with a real estate broker or agent to scout available land. If you decide to begin a major building project after purchasing your land, you will often need to be able to oversee construction in-person to ensure satisfactory progress.

Having land of your own can be one of the most rewarding ways to make the most of this tropical paradise. You can construct a dream home for retirement or build and sell a luxurious house for profit. Owning land is also a great way to build a holiday home that you can rent out throughout the year. Because of the growing number of expats in the region, you can either join a developmental suburb near a city or choose an idyllic location away from the crowds.

Pros and Cons of Buying a Land in Costa Rica as a Foreigner

Foreigner-Friendly

• Foreigner-Friendly: Foreign investors enjoy the same legal rights as citizens. Be sure to contact the local municipality to preclude any exceptions.

Potential Year-Round Income

• Potential Year-Round Income: The Caribbean climate increase the likelihood of year-round income. Although Costa Rica has a conventional high season and a low season, the sheer biodiversity attracts visitors for various reasons during every month of the year.

Economic and Political Stability

• Economic and Political Stability: Costa Rica is a republic that is friendly with richer nations and has long enjoyed economic and political stability. It is a much safer bet for investment than other Central American countries.

• Diverse Opportunities: Costa Rica is flexible enough that you can buy land, existing beachfront property, a house, or a condo and then rent for profit.

• Expanding Infrastructure: Expanding infrastructure that includes railways, bridges, and new highways means that you can now reach remote locations easier than ever before. This expansion also makes living further out safer since you have more direct access to hospitals and other amenities as well.

• Idyllic Surroundings: One cannot say enough on how many regions in Costa Rica resemble a real-life paradise. Investing in this region can feel more like a sure-bet due to the guaranteed flow of vacationers, adventurers, and tourists. This can translate into income flow that you can use to calculate plans for your future. You can also take advantage of your property by using it as your own getaway between rentals or during renovations

3. The Major Steps to Purchasing Property in Costa Rica

Now that you have found your dream property in terms of location and type, it is time to take the key steps to secure this property for your own. Each of these steps work toward closing the deal on your desired property as soon as possible. If you have not already, it is important to enlist the help of an experienced and trustworthy real estate broker.

How to Find the Right Costa Rica Real Estate Broker

There are no licensing requirements for real estate brokers in Costa Rica. Since virtually any citizen can go into business as a realtor, it is important to verify that the agent is a paid member of a real estate association. Currently, the most popular association is the Costa Rica Global Association of Realtors (CRGAR). This organization sets standards of service and offers a sense of transparency and security to foreign buyers.

After hiring a broker, the standard steps to purchasing property are as follows:

1. Make an Offer

• 1. Make an Offer: The first step is to make an offer in order to demonstrate interest in the property and put yourself ahead of competitors. Most offers are generally lower than “asking price.” An offer should be high enough to ensure likelihood of closing the sell, but low enough that you are not paying more than the property is worth. Check the worth of a property by conducting research on surrounding sales and getting a second opinion from an assessor.

2. Finance Your Property

• 2. Finance Your Property: As with most countries, it is unlikely to receive local financing as a foreigner. Most financiers require that applicants are legal residents of the country. It is possible to receive grants or loans as a major developer, but the most common ways to finance your property in Costa Rica include home equity loans (on your existing properties), direct savings, or retirement funds

3. Consult an Attorney

• 3. Consult an Attorney: Experienced brokers can recommend a local attorney to process what is known as a “due diligence report.” The law in Costa Rica requires you to produce a due diligence report as proper documentation that you are making a legal purchase. This report usually includes verifying registration of the title for sale, knowledge of any existing mortgages or liens on the property, and proof that any back taxes have been paid in full. The lawyer should also create and append the official contract of sale.

4. Sign the Deed

• 4. Sign the Deed: Costa Rica law requires that a local Notary Public confirms and formalizes your purchase transaction. You must sign the deed and record the transaction with the Public Registrar to ensure a legal purchase. Fortunately, you do not necessarily need to be present in the country to complete this step. Simply sign the documents remotely or authorize your lawyer to employ the power of attorney.

5. Pay Required Closing Fees

• 5. Pay Required Closing Fees: You should anticipate any required closing fees to reduce unexpected surprises down the road. It is customary that the buyer and seller each pay half of the total closing costs, but since this is not always the case, you should verify this early in the process. Closing fees can include deed transfer taxes of around 2.3-percent and attorney association (Colegio de Abogados de Costa Rica) fees of approximately 1.5-percent of the sale price. Total closing fees can cost up to 3.8-percent of the declared value of the property.

4. Understanding Property Management When Purchasing Property in Costa Rica

A unique aspect of buying property in Costa Rica is the recommended use of property management company or firm. Property management companies oversee the upkeep and maintenance of your real estate, keep your property compliant with local laws in your absence, and supervise the flow of guests and revenue from any rental property. Whether you choose to rent your property independently as an absentee owner or list it on an online marketplace such as Airbnb, a local property management company can help your property remain in great condition both before and after the rental. You can also enlist a property management firm to forward important legal documents or to pay relevant property taxes in your absence. Management companies are particularly useful for preventing a rural property from falling into disrepair, and these companies can help protect your investment by making your property look trustworthy and legitimate to potential clients.

Property Management and Ongoing Costs

In the real estate industry, hiring a property management firm is a standard ongoing cost to ensure upkeep of your property and protect your investment. While this ongoing cost is unavoidable for most absentee owners, it is fortunate that Costa Rica has some of the most reasonable rates in the world. Costa Rica also has one of the lowest property tax rates in the Caribbean (approximately 0.25-percent each year).

Annual property management ongoing costs to consider include the following:

• Property taxes (0.25-percent)
• Homeowner Association (HOA) fees
• Landscaping and exterior maintenance
• Utilities
• Cable and WiFi
• Standard security
• Potential maid or pool services
• Luxury taxes for hotels, villas, or beachfront rental properties

Depending on the type of property, annual maintenance can be as low as $1,500 or as high as $20,000. Since there are plenty of management firms from which to choose, be sure to ask questions that fit your property (e.g. rural vs. urban) to find the right management company and protect your investment.

5. Pitfalls to Avoid When Purchasing Property in Costa Rica as a Foreigner

Purchasing Costa Rica real estate for sale is an incredible opportunity, and many buyers are delighted to find the process much simpler than in other Caribbean countries. However, there are potential mistakes you should avoid in your quest for the perfect property. Some of the most common errors include the following:

Making Assumptions About the Process

• Making Assumptions About the Process. Since the culture of Costa Rica is laid-back and welcoming, some buyers make the mistake of assuming that the process is overly simplistic. It is important to have written documentation of the real estate market and municipal laws to avoid legal pitfalls. For example, a property for sale needs to be fully registered and titled to avoid any claims against the property after you have already handed over your money.

Trusting the Wrong Individuals