Why Costa Rica homes are good for vacation rental investments

Vacation rental Atenas Costa Rica homes

Thinking about retiring in Costa Rica? Or, being able to vacation there frequently? Learn how buying Costa Rica homes for vacation rentals can be an investment in your future, and let you make money when you’re not there.

Atenas Costa Rica
Atenas Costa Rica

You’ve discovered Costa Rica, a place millions of tourists come to every year on vacation. You’ve found you really like it, and would love to visit anytime you want. Maybe you’re even thinking one day of retiring in Costa Rica, a top international retirement destination. But you’re not quite ready to move there permanently.

One way to make all of that happen is by investing in a vacation home rental.

Buying Costa Rica homes as vacation rental investments is how many people help finance the purchase and upkeep of their future retirement home. Or, they simply plan to always use it as a vacation home, and make the house pay its expenses by renting it out when they’re not using it.

Atenas Costa Rica homes
Atenas Costa Rica homes

Are vacation rentals in Costa Rica a good investment?

A popular area for vacation rentals in Costa Rica is the charming country town of Atenas. There are well over 50 vacation home rentals in this area, and occupancy rates average 70 to 80% in high tourism season, and 40 to 50% in low season, according to statistics from Dennis Easters, an Atenas Costa Rica realtor and co-owner of Pure Life Development.

Vacation rentals are a good investment if you are not ready to move to Costa Rica full-time, or you are retired and able to vacation whenever you want. And a vacation home is a hard asset of real estate,” explained Easters. “Most people who have bought vacation rentals in Atenas are pre-retirement, usually two to five years before they will retire. Some people already have one vacation home and found it is profitable. Then, they end up buying multiple homes and running them as a business.”

Renters are mostly from the U.S. and Canada who come during northern winter months to escape snow and cold weather. Or, they are tourists who want to visit Costa Rica’s Central Valley and Central Pacific Coast, since Atenas is 30 to 45 minutes from both areas. People also rent vacation rentals while looking at Atenas real estate in order to get to know the area better before making the big decision to buy. Renters additionally can be people who have already bought land and are building a home, and need a place to stay in the meantime.

Vacation rental guest house in Atenas Costa Rica
Vacation rental guest house in Atenas Costa Rica

John and Gay Boggs moved from the U.S. to Costa Rica in 2013 and bought their home in Atenas not even thinking about vacation rentals. The couple added a guest house on their property originally planning it for their own friends and family visiting, but then their realtor, Easters, told them how good the market is for vacation home rentals in Atenas.

Besides renting out their guest house, earlier this year they bought another property in the same Atenas residential development where they live and are building a new home to use exclusively as a vacation rental.

“We thought it would be a good investment because we love our builder (Rolando Perez Gonzalez) and the quality of his work,” said Gay Boggs. “And our neighbor’s house, also built by Rolando, is rented consistently for one to three months at a time. It’s a great investment and rate of return, and properties really hold their value in Costa Rica.”

Villa Doughty vacation rental in Atenas Costa Rica
Villa Doughty vacation rental in Atenas Costa Rica

Dianne and Steve Doughty own three vacation rentals in Atenas, Costa Rica. Currently living in Texas, the couple says they have too much family in the USA to move to Costa Rica permanently. They started buying properties in Atenas in 2011 as an investment and for a personal vacation home. They found it was profitable to rent out the house when they weren’t using it; then simplified their lives in the U.S., and bought two more houses.

“We treat it as a business, and manage it that way,” said Dianne Doughty. “It’s a good, steady source of income if you want to share the house and not live there full-time.”

“We tend to keep our rentals in the lower price ranges because we want to keep them rented, but it more than pays for our expenses and we can deduct a lot of expenses from our taxes,” added her husband, Steve.

The couple advertises on VRBO, HomeAway, and on their own website Atenas Vacation Villas. Now both retired, they visit Costa Rica up to six months a year, staying in one of their houses each time, which they block off for when they need it.

The Doughty’s say the key to owning successful vacation rentals is having good, dependable property managers. “You have the normal maintenance that you have with any home; there’s no difference with an investment home. But if you’re not in the country, you have to have good property managers and a solid network of help,” said Dianne.

Vacation rental Atenas Costa Rica homes
Atenas Costa Rica vacation home rental

What to know about vacation rental investments in Atenas, Costa Rica

Realtor Dennis Easters cautions that prospective buyers should be clear that owning Costa Rica homes for vacation rentals is a long-term investment. “Don’t go into a vacation rental real estate deal thinking you are going to make a bundle of money quickly,” he said.

“You can expect about a 5 to 7% return on investment rate on vacation rentals in Atenas, Costa Rica,” noted Easters. “Vacation rentals also take time to get set up and get going. You have to create listings on VRBO, Airbnb, HomeAway, and other websites, and make sure real estate agents in the area are aware of their listing. Then, with the first 10 clients, you’ll find out what works and what doesn’t, what’s missing, and what you need to improve.”

The Doughty’s additionally recommend having a good accountant and a good attorney in Costa Rica, and obtaining  Costa Rican residency to be able to open bank accounts and do business easily in the country.

Article by Shannon Farley

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