Buying the Dream: Costa Rica from Condé Nast Traveler on Concierge.com

Buying the Dream: Costa Rica

by Carolina Buia | Published December 2003 | See more Condé Nast Traveler articles ›

Why settle for a country house when you can settle in a foreign country? Carolina Buia reports on making yourself at home in nine to-die-for destinations

Overview: This Central American country has mountains, rain forests, and beaches fronting both the Caribbean and the Pacific. Americans tend to favor Guanacaste, in the northwest, the driest of the country's seven provinces; the fact that it has an international airport and reliable infrastructure lead lodging analysts to call it the next Cabo San Lucas or Hawaii—albeit infinitely more affordable. In beach communities such as Playa del Coco, a modest three-bedroom home starts at $110,000; 12 miles away in Playa Flamingo, a 7,000-square-foot villa with marina access costs $1.2 million to $3 million. Those who want a more urban feel settle in the San Jose suburb of Escazu, where homes sell for between $200,000 and $600,000.

Fine print: Foreigners have the same property rights as Costa Rican citizens do. Up to 160 feet inland from the mean high tide mark is considered public property and building is not permitted; from 160 to 660 feet is the median-terrestrial zone (MTZ). If you become a resident, you may own a house or a condo in the MTZ, but you'll essentially be leasing the land beneath it from the government. Work with a reputable bilingual real estate agent, since a property listed in an English-language newspaper can be twice the price of the same property in a Spanish newspaper. Financing is rare and expensive; most transactions are done in cash.

Hidden costs: A notary public, who is also a lawyer, must be hired to execute the intent to purchase and sell, called an escritura. If you plan to be absent for long periods of time, be aware that if squatters occupy your land for ten years, they can legally register it as their own.

Rental prospects: According to Coldwell Banker, during the high season (November through April) you can expect a 50 percent occupancy rate for large homes and 80 percent for smaller homes and condominiums. In high season in Guanacaste, a two-bedroom, two-bath condo with an ocean view can rent for $500 to $700 a week, while a five-bedroom villa with views and gardens goes for up to $5,000. A three-bedroom home in the heart of Escazu, with all modern amenities, is $375 to $600 a week. While there are several income-tax brackets, expect rental income to be taxed at roughly 10 percent.

Suggested real estate agents: For Guanacaste, Linda Gray of Coldwell Banker Coast to Coast Properties (506-670-0805; coldwellbankercr.com) and Marilyn Henderson of Carico Real Estate (506-233-8057; caricohenderson.com); for Escazu, Les Nunez at Re/Max First Realty (506-290-3183; remax-first-cr.com).

Want a home (far) away from home? Follow Carolina Buia's directions through swamps of bureaucracy and knotty financing:
Buying the Dream: Introduction
Buying the Dream: Bali
Buying the Dream: Barbados
Buying the Dream: Bermuda
Buying the Dream: England
Buying the Dream: France
Buying the Dream: Italy
Buying the Dream: Mexico
Buying the Dream: Spain