If you want to invest in a rental property, Costa Rica villa rentals provide some of the best returns for property investments. Customers will book a villa on the beach for most of the year because of the warm weather and low costs. With excellent infrastructure and minimal expenses, seeing a return on a rental property in Costa Rica is great supplemental income, especially in the area’s real estate market. Investors from all over the world have been flocking to Costa Rica to purchase rental properties for decades. If you are an investor looking to expand into the rental property sector, a beach front Costa Rican villa rental is one of the best options.
With 800 miles of coastline, there is plenty of opportunity for villa rental beach-front investment. The most popular spot for a villa rental is the Tamarindo coast which is only 45 minutes from the airport. Hence, tourist and renters from all over the world travel through this main international hub. Despite the amount of tourism in the area, land and property prices are relatively low. Of course, this makes it a hot spot for investors. Since Tamarindo has some of the highest tourist traffic of any city in Costa Rica, you are virtually guaranteed a return on your investment.
The best way to see a return on your rental villa investment is to market it properly. There are dozens of marketing and rental agencies in Costa Rica that will advertise your property to potential renters. Additionally, marketing and rental agencies coordinate anything a renter may need while visiting. This includes cleaning or lost keys. Typically a rental agency will charge a 20% commission. However, in cases where you find a renter yourself, a rental agency may only charge a 10% commission. Marketing your rental villa is the best way to draw more attention to it. Plus, this is the best way to provide valuable services to the renters.
Costa Rican villa rentals remain one of the best property investments for foreigners. This is because the country has great framework for foreign investors who know how to prepare their rental agreements. Foreigners have the same land purchasing rights as locals do. They can purchase Costa Rican land in their own name without any extra hoops to jump through. However, most investors create corporations in Costa Rica to purchase the property to lower the already favorable 0.25% property taxes. By creating a corporation, investors can protect themselves from being personally liable for the property. Because of its relative simplicity, investing in a rental property in Costa Rica can be a great supplemental income source.
During high season, December to April, investors can expect their income from rental villas to be double what they earn the rest of the year. These are the coldest months in North America and Europe and the hottest months for Costa Rica. The warm weather isn’t the only reason tourists visit Costa Rica. Renting out your property during holidays and festivals in Costa Rica can be a great way to keep it booked. Festivals like the Carribean Music Festival in March and April or the Full Moon festival in January draw heavy tourist traffic. Some renters prefer the cooler weather in Costa Rica between May and November. But, there are generally less tourists making this a good time for you to visit your own property. To see the best return on your property, you must have it open during high season.
The costs of owning an all inclusive rental villa in Costa Rica have been quite low for a long time now. However, Costa Rican income taxes recently changed to require every local income stream to be taxed 15%. Before this change the only taxes a rental property owner had to pay was the 0.25% property tax. While this new 15% doesn’t directly apply to rental properties, investors should pay the tax to avoid back taxes. Besides taxes, an investor can expect additional expenses to include utilities, insurance, cleaning services, maintenance, and marketing services. Despite the tax hike, a Costa Rican villa rental is still one of the most profitable property investments.
Investing in a Costa Rica villa rental can be one of the most profitable investments you can make today. With so many options for investing in rental property locations, and the most popular locations looking to expand, there is truly an option for every investor. By marketing your property with an agency, you can expect greater returns and more bookings throughout the year. Excellent infrastructure and history of foreign investing makes Costa Rica a safe place for a good return. Keeping your property open to rentals during the high season and holidays is the best way to double your income for that year. Low taxes and minimal extraneous costs allow most investors to get their feet wet in the rental property business with a Costa Rica property. Whether you are an experienced investor or looking for your first project, a beach front Costa Rican Villa Rental is one of the best ways to see a big return.