Investment Property in Costa Rica

Home Costa Rica   Investment Property in Costa Rica

Investment Property Costa Rica - Investors' Guide

Investing in Costa Rica has been a dream for many Americans and Canadians for the last decade or so, drawn by the exotic landscapes, the warm Pacific waters and the tropical lifestyle. Costa Rica is now becoming of interest to European investors have realised that this little country with its stable government, idyllic location, wonderful climate and inexpensive property prices is a great place to invest some of their money in real estate.

These non residential property rights and the fact that there is NO property tax in Costa Rica

The Costa Rica property Market is continuing on its strong upward trend, partially assisted by the Baby boomers of North America who are buying both resort properties on the beaches and apartments in the Capital. For these investors from the north the property is mostly for personal use especially in the winter months when freezing temperatures make day to day living harsh.

Costa Rica is most definitely enjoying the property boom which is creating more jobs, increased investment and an improved GDP. Infrastructure is improving throughout the Costa Rica - and it was already fairly good - security and personal safety is excellent in most areas. Over the last four years, property prices have increased by 25% per annum and analysts believe that they will continue at similar levels.

The last four years have shown a 25% price growth. Prices are not as low as they once were, but you can still find good deals even along the pristine beaches. The property market in Costa Rica is currently catering to the vacation and retirement investor.

In Costa Rica all property owners enjoy the same rules and regulations regardless of whether you are a Costa Rican national, resident or overseas investor. New off plan developments that offer resort style properties are becoming very popular with wealthy Ticos looking for second homes by the beaches, as well as being the primary interest of overseas investors. This is predominantly because the rental market in these areas is far stronger but also because these resort communities typically offer onsite management.

Property purchase fees are normally split between the buyer and the vendor and rarely exceed 7% combined - which is relatively inexpensive when compared to similar countries. Once you have decided on the right investment property for you in Costa Rica, you should allow upto 21 days to complete the registering and purchase process.

Maritime Zone

The areas along the beautiful coasts of Costa Rica are known as the Maritime Zone, and are all owned by the state and cannot be developed â€" this Maritime Zone applies to some 95% of coastal regions of Costa Rica - as it considered to be Concession property and is regulated by the ICT "Costa Rican Institute of Tourism". These regulations set out the rules for foreigners and locals to own a concession property. These concession essentially stipulate the rights to use and enjoy specific properties located in Maritime Zones for a pre-determined amount of time and basically operates in the way of a lease. These laws also apply to islands, estuaries, rocky peninsulas, mangroves, in fact just about any natural formation that is above sea level within 200 metres of the shoreline.

You can, on occasion, receive a grant for a property, but this will not allow you the right develop property and is only available if you have been a resident for over 5 years.

This Maritime Zone in Costa Rica is essentially broken down into two areas - the first 50 metres are designated as public areas and only government approved constructions can be built here. The second section is the area that covers the next 150 metres which is considered a Concession or Restricted area. This "Leasehold" land van be utilised for a specific amount of time only with 20 years being the norm.

Some important points about buying and owning property in Costa Rica:

• Have your lawyer ensure that the property is free of liens, charges and equally importantly, of tenants. Should you take possession of a property with tenants you could find yourself in courts for a long term if they need removing.
• Property that has a no registered owner or an unattended property can legally be occupied by squatters and after just three months they will be able to legalise their right to stay in the property.
• Overseas owners are recommended to employ a management company or hire a manager to oversee the property in your absence so as to protect your investment.

Although the property market has been increasingly strong in Costa Rica, the rental market has only been averaging about 7% per annum, with areas of San Jose achieving 12% and certain coastal resorts achieving yields of between 6 and 15%. With new quality lifestyle resorts now being constructed in much sought after coastal regions and with much improved air links, we expect rentals to increase in volume the very near future.

Why invest in Costa Rica

• The property market is booming
• An established and easy purchase process
• Property bargains are still widely available
• International and local investment in infrastructure and tourism

Recommended areas for off plan investment in resort style communities include Tamarindo Bay, The Pacific Coast, the southern Caribbean coast. There are also some excellent eco-friendly developments in central Costa Rica.