Investing in Costa Rica real estate
An investment starts with a clear goal: own use, rental or long-term appreciation. Each goal calls for different criteria.
- Purchase and closing costs (indicative – always verify)
- HOA, management, insurance, maintenance, local tax
- Occupancy and nightly rate as a scenario, not a certainty
- Liquidity and time to resell
Investment calculator
Enter your own assumptions. Results are model scenarios, not a promised return.
| Conservative | Base | Optimistic | |
|---|---|---|---|
| Total investment | $310,500 | $310,500 | $310,500 |
| Gross yearly income | $22,848 | $38,400 | $48,576 |
| Operating costs | $9,305 | $12,882 | $15,222 |
| Net operating income (NOI) | $13,543 | $25,518 | $33,354 |
| Loan payments yearly | $0 | $0 | $0 |
| Cash flow yearly | $13,543 | $25,518 | $33,354 |
| Gross yield | 7.4 % | 12.4 % | 15.6 % |
| Net yield (NOI / investment) | 4.4 % | 8.2 % | 10.7 % |
| Cash-on-cash return | 4.4 % | 8.2 % | 10.7 % |
Net yield sensitivity (NOI / investment)
| Booked nights per month / Average nightly rate (USD) | $160 | $180 | $200 | $220 | $240 |
|---|---|---|---|---|---|
| 8 | 2.5 % | 3 % | 3.5 % | 3.9 % | 4.4 % |
| 12 | 4.4 % | 5.1 % | 5.8 % | 6.6 % | 7.3 % |
| 16 | 6.3 % | 7.3 % | 8.2 % | 9.2 % | 10.1 % |
| 20 | 8.2 % | 9.4 % | 10.6 % | 11.8 % | 13 % |
| 24 | 10.1 % | 11.6 % | 13 % | 14.4 % | 15.8 % |
Rows: booked nights per month; columns: average nightly rate. Other inputs stay as entered.
- NOI (net operating income) = rental income minus the owner's operating costs, before loan payments and income tax.
- Cash flow = NOI minus yearly loan payments (principal and interest). Without a loan it equals NOI.
- Cash-on-cash return = cash flow / equity actually invested (own share of price + closing costs + furnishing).
- Enter cleaning, guest turnover and booking-platform fees only if they are not already in the manager's commission, to avoid double counting.
- Input origin: defaults are model values or developer assumptions, not documented operating results of any specific unit.
Formulas: income = nights × 12 × nightly rate; NOI = income − commission − (HOA + fixed management + utilities) × 12 − insurance − tax and maintenance on price − reserve; net yield = NOI / total investment. Conservative = 70% of nights and 85% of rate; optimistic = 115% and 110%. Defaults of 3.5% closing, 20% commission, USD 150 fixed management, 16 nights and USD 200/night are a developer's assumptions for one specific model (email of 14 Oct 2026), not audited market data; 0.25% reflects the general Costa Rican property tax rate (confirm with the municipality). Verify current terms with the developer, a lawyer and a tax adviser.
Frequently asked questions
What is the annual property tax in Costa Rica?
The municipal property tax is 0.25% of the registered value per year. Homes above a legal threshold (updated annually) also pay the luxury home tax (impuesto solidario).
How is rental income taxed?
Costa Rican rental income is usually taxed as capital income at 15% after a standard 15% deduction (about 12.75% of gross rent); short-term tourist rentals are also subject to 13% VAT. Taxation in your home country must be reviewed with a tax adviser.
Do you guarantee rental returns?
No. Returns depend on occupancy, nightly rates, management and costs. Our calculator shows transparent scenarios with editable assumptions, not a guarantee.
Can I manage a Costa Rican property from Europe?
Yes, usually through a local manager or an on-site rental programme handling bookings, cleaning and maintenance for a commission. Review the management contract as carefully as the purchase contract.
Answers are general and indicative. Always review a specific transaction with a Costa Rican lawyer and tax adviser.