Hotels are not for everyone. And in South Pacific Costa Rica, they are hardly for anyone. The people who visit this region of the country tend to be of the variety that prefer a more unique and embedded experience, and the number of big hotels in this region is reflective of that preference (there is a whole zero branded hotels in the Costa Ballena).
Visitors come to the Costa Ballena wanting something with less structure and more integration with nature; something a big more personal, with a more “homey” environment from which to enjoy the peace and tranquility that living here (however briefly) affords us.
And for those who come with more permanence in mind, the idea of moving to Costa Rica is traditionally appealing to retired people, although more and more part-time residents of all ages are arriving every year. These are people who visit for 3-6 months at a time, seeking a simpler lifestyle. They are drawn to the reputation of this country being one of the longest and most stable democratic governments in Latin America, where foreign investment is easy, both large and small, for private and commercial interests.
Creative expats can combine their desire to move to a land full of natural beauty with the opportunity for starting a new business. Moving to Costa Rica before retirement age can simply be a matter of opening a small business on your property as a rental destination – an easy and fun way to make your real estate investment work for you.
Long term rental properties can generate an annual yield of 5-7% of the purchase price. Short term vacation rentals yield a slightly higher annual return of 8-12%.
How to make the dream work before retirement
Some people spend half the year in their home country like Canada, the US, or in Europe, running an accommodation in the summer months in those countries, and the other half operating in Costa Rica’s high season (December-April).
This is not a country for ‘Type A’ personalities, but if you go slowly, in the pace of the place, you can go far. Many deals can be found on properties for sale by absentee owners, who want or need to use the income they’ve tied up in Costa Rica real estate elsewhere, so keep an ear to the ground and an open mind.
There are key elements that make the difference between a successful rental, and a property that will only provide headaches. Buying in a popular vacation destination with the right balance of a constant flow of people and the nature and seclusion that makes Costa Rica special will make all the difference – to you and your guests. Consider your own enjoyment of the property first and then market to the people like yourself who will enjoy the great escape in Costa Rica that you have cultivated.
Choosing your target market
If you are interested in high-turnover rentals, you want your facilities to be of a certain standard, close to amenities, and close to attractions (nature, beaches, adventure).
Small vacation rentals allows for families to have a more intimate time, with the ability to bring pets and have your kids/grandkids run and splash about in the pool. Couples who want more privacy prefer to rent a small home and property to ditch the encumbrance of clothing. Whatever the reason, vacation rentals are a convenient alternative for travelers, and a mode of expression of taste and hospitality for the international array of proprietors.
Many tourists opt for the vacation rental for the savings. Rentals generally provide guests with more space for less money. Especially for those who are staying for an extended holiday, hotels can get pricey very quickly, whereas rental homes will often give a better rate for those staying for a longer time. These visitors also have the benefit of a full kitchen and a laundry room, giving them more freedom to live at their own pace.
Living in a vacation home gives a renter the opportunity to see what life feels like for a local while they thinking about if they want to make their stay more permanent and buy their own home. And in our experience as real estate agents in the Costa Ballena, we know that the majority of our buyers are long-time visitors to this region who have fallen in love with the lifestyle and are ready to make a more permanent stay.
***If you are currently operating a vacation rental in the Costa Ballena, we’d love to hear from you. We offer a great referral program to business owners who refer buyers to our office. Send us an email or give us a call to discuss how your business can work even more effectively for you.