If you’re researching, browsing, and looking to find homes in Costa Rica, there’s one piece of savvy advice that often pops up for new Costa Rican residents: rent before you buy. Because, in the land of microclimates, spotty utilities, roads that transition to dirt and potholes, swinging seasons, and real estate that once sat on the market for years, you can never be sure what you’re going to get (or when you could sell it to someone else).
The thing is, that’s only partially true. And sometimes, it’s terrible advice.
Let’s back it up. A decade or two ago, this advice was true: Utility coverage was spotty, so even if your would-be next-door neighbor had high-speed internet, you might have been looking at dial-up (yes, even a decade ago!). And roads that were passable in the summer/dry season (December-May) did (sometimes) turn to 4×4-required, snorkel-recommended water holes and mud pits in the winter/rainy season. And many homes did, indeed, sit on the market for years.
But it’s 2022 and things have changed. So let’s take a look.
The 2022 Reality: What to Look for & How to Find Homes in Costa Rica
The standard rent-before-you-buy advice comes down to several important factors. And, depending on your needs, priorities, and relocation style, it may be good advice! Here’s what to look for:
- General Location: If you’re still in the “I’d like to live near the beach, not too urban, not too rural” phase, then you’ll want to rent first. Take 6 months (preferably 3 months in rainy season, 3 months in dry season) to explore each potential area and find your right fit.
- Specific Location: If you’ve narrowed in on a general location, know that there are often many, many different neighborhoods and communities from which to choose.
- Traffic: Depending on where you’re headed, you may need to consider local traffic. Heading for a small beach town, like Potrero (near Tamarindo)? Traffic won’t be a major issue. Planning to live in the Central Valley’s posh Escazú? It can take an hour to drive four miles during rush hour.
- Convenience to XYZ: If you need to be within 20 minutes of a major hospital or close to a specific private school, do not rely on Google Maps. It’s not just traffic: Varying road and climate conditions, scheduled road maintenance (they really are working on improving infrastructure!), and other factors could affect your commute. Always discuss these must-haves with your relocation expert, real estate agent, or trusted resident who lives (currently) in the exact area you’re considering.
- Microclimates: Never heard of a microclimate before? They refer not to major climate changes (ex. mountain vs. beach, cloud forest vs. dry forest) but to tiny variations (elevation, forest cover, etc.) that result in fairly big differences in temperature, rainfall, sun hours, and other climate conditions. The weather can change drastically within a mile’s drive!
- Utilities: Once upon a time, it was challenging to determine whether or not a specific utility was available at a specific address. Today, most homes and lots have a NISE number (número NISE) that identifies its location to utility companies; you should be able to call any utility (say, fiber optic internet) and, using the NISE, determine whether a specific service is currently available at your location.
- Roads: Costa Rica’s road infrastructure is improving but we’re not there yet. If you’re not planning on living within a gated community or residencial, both of which typically have HOA fees to cover internal roads, then this is one factor you do need to consider with care. Talk to people who live around any home you’re considering and, if you’re working with a real estate agent (for rentals or for purchase), choose someone who is the expert in your area. They will either know, or will know someone who knows, about road conditions during the rainy season.
- Time on Market: If you’re considering purchasing a home and are worried about time on market (if you ever choose to sell it), then consult with a local real estate agent. Not only is there a new MLS in Costa Rica (huge news!) but local agents with expertise in a specific area can give you a good idea of standard times on market for your area, right down to specific gated communities, condominiums, and even neighborhoods. For example, right now, many properties in northwestern Guanacaste (around Tamarindo/Playas del Coco) are currently sold within days, if not hours!
Those are the big basics to watch out for. Of course, there are other, often personal preferences to consider, as well – everything from power lines (visible?) to the neighborhood’s dogs (do they bark?).
Renting vs. Buying a Home in Costa Rica
There are two schools of thought in Costa Rica: 1) rent first or 2) to heck with renting. If you have strong feelings either way, then they probably won’t change. But if you’re on the fence about which is right for you, then consider this:
Pros of Renting:
- You can try before you buy. If you’re new to Costa Rica or are totally footloose and fancy free – no need to be within XYZ minutes of anywhere, specifically – then you’ll benefit from sampling life in many towns and parts of the country. Our strong recommendation is to spend 6 months – preferably, 3 months in rainy season and 3 months in dry season – anywhere you’re seriously considering.
- You can experience more of Costa Rica. There’s nothing like boots on the ground! If you’re adventurous and see your move more as another chapter in your book of life, then renting gives you the freedom to write a chapter in the rainforest, a chapter at the beach, a chapter on the Caribbean coast, a chapter in the mountains…
- You can explore various neighborhoods, microclimates, etc. You can be the best researcher in the world and still, what you read or watch is not the same as your lived reality. If you have trouble finding that “just right” neighborhood or climate, then renting gives you the ability to explore here, and then a mile from here, and then two miles from there. Etc. etc., until you’ve found your version of perfection.
- You don’t have to commit. If you hate where you’re living, no problem! Most long-term rental contracts require you give only one month’s notice.
Cons of Renting:
- It’s a tight rental market. If you’re like many people, you’re looking to find homes in Costa Rica with very specific qualities. If those include a pool and/or a view of the ocean, know that you’re competing against a premium short-term rental market (vacation homes), which rent often and well (and for more than long-term rentals). Depending on what you’re looking for, it may be very difficult to find it.
- It’s an expensive rental market. If you do find what you’re looking for, prepare to pay for it. Remember, you’re competing against those short-term vacation rentals. What you want to pay $1,500-$2,000/month to rent, they’re often billing at $2,500+ a week.
- It’s nearly impossible during summer/the dry season. Finding a home during the high season (about December-May) can be almost impossible, if you’re searching in a popular tourist area.
- You can’t customize anything. If you’re a long-term homebuyer (and especially if you like things “just so,” then know that transitioning to a rental home can be difficult. Nothing will ever be quite right or just the way you like it – and when it comes to an international move and culture shock, even small inconveniences can feel big.
- You’ll have a landlord. Again, it’s a matter of your personal culture (and culture shock). If you’re a long-term homeowner, it can be difficult to shift to being the lessee. When something needs changed or fixed, you’re on your landlord’s clock (hopefully, it’s fast!).
- And there’s no ROI. Long story short, your rent doesn’t work for you the way a mortgage or investment property does. That’s not necessarily an issue… unless it is for you. Put it this way: Even if you get a great deal on that oceanview pool property, $1,500/month for 5 years is $90,000 and no tangible asset to show for it.
The benefits and disadvantages of buying property are not quite the inverse of renting. Consider this:
Pros of Buying Homes in Costa Rica:
- You’ll have access to a larger inventory. Typically, when you’re looking to find homes in Costa Rica, there are more for sale than are available for long-term rental. And it’s not just sheer numbers – there are more homes of varying types. For example, it can be almost impossible to find a long-term rental in a specific gated community at the beach, but if you’re lucky (and your real estate agent is vigilant), one or two may come up for sale.
- You can create the home you want. Unless you’re building, you’re unlikely to find a home that is perfect as-is. When you purchase a home, you have the latitude to make changes, plant a garden, paint the walls, and do all the other things that make a house feel like a home.
- Your investment (probably) accruing value. The real estate market is hot and desirable homes are gaining value. If you’re looking to find homes in Costa Rica to by, not only are you not paying that aforementioned $90,000 in rent, but your investment will likely be worth more than $90,000, five years down the road.
- You’ll earn help in the process. A great real estate agent (hi there!) in Costa Rica will offer friendly advice and help throughout and long beyond your purchase and move. This can be invaluable. With a long-term rental, you probably won’t see much of your rental liaison after you sign a contract.
Cons of Buying Homes in Costa Rica:
- You’re committed to where you buy. Unless you’re willing to sell, you’re staying put. That can mean dealing with area construction, road repairs, or more (or less) rain than you were expecting. Do your due diligence (and if that’s not your thing, rent first!).
- Location dependent, it could take a while to sell. Guanacaste’s beach market may be sizzling right now, but the Central Valley isn’t quite so hot. If you haven’t purchased in one of the more popular areas, it may take months or years to sell your home.
- You’re responsible for everything. Even if you’ve been a homeowner for decades, learning how to own a home in the tropics takes some time. There’s lots of sun, wind, and rain here – and plenty of their accompanying maintenance.
Looking to Find Homes in Costa Rica?
Hi, I’m Rebecca Clower. (My friends call me Becky.) In 2006, I did what you’re preparing to do: I followed my heart and moved to Costa Rica.
For nearly two decades, I’ve made my home here. I’ve founded businesses and volunteered my time. I’ve gotten to know my neighbors and have grown to love my community. I’ve raised my two boys here. I’ve been on international TV. I’ve given back to my community. I’ve taken on major positions of responsibility and authority.
Along the way, I founded one of Costa Rica’s most successful independent brokerages. And for years, I’ve made it my job to help other people do the same. I offer real, honest advice and expertise to my clients. I promise not to sugarcoat the hard truths or gloss over the tough parts. I will tell you the whole truth, the full truth, and even the hard truths.
I hope that you’ll find the beautiful truths to outweigh them all. So, sign up for updates, download my free eBook, and get in touch. Let’s get started!