Renting vs Buying

Ten Reasons To Rent Before You Buy Costa Rica Real Estate

  1. Weather: Try not to rush into buying something because it is such a great deal and “the weather is perfect.” Renting in an area will allow you to see if the weather is perfect for you during the dry and rainy season. Nearly all real estate sellers will tell you the “weather is perfect” all over the country.
  2. Security: Please don’t rush into buying something because it is such a great deal and “this is the best and most secure area” in Costa Rica. Renting in an area will let you meet the neighbors (Ticos & Expats) to find out the reality of the actual costs and actual security of the area.
  3. Comfort: Think before you rush into buying something because it feels so much like home with all of the convenient shopping and English speaking neighbors. Renting and spending time traveling around the country with an open mind to see if there are viable options that are completely unfamiliar to you will possibly open you to a much more rewarding lifestyle.
  4. Scarcity: Do not rush into buying something because there is so little inventory of quality construction in desirable places. Renting allows time to discover options in many areas. Multiple listing systems (MLS) are only just starting to take hold in Costa Rica so the selection at the moment is pitiful and remember that many Ticos will not even use a Realtor, many good bargains require you to spend several months inquiring in areas that interest you.
  5. Friendly Advice: Never rush into buying something because the first “friends” (usually found on the Bulletin Boards) who have lived in Costa Rica for a while appear to know a lot about what you need. The fact that someone has lived here for several years does not guarantee they know how you will adjust to the environment they are in.
  6. Standards: Analyze carefully before you rush into buying a house because it was built to “American or Canadian standards.” This is meaningless for Costa Rica. Renting and doing extensive investigation will allow you to learn how different building systems can deliver the amount of space you decide you want at a price that works for your budget. Homes that are properly built to Costa Rica standards are much stronger than nearly all homes in the US and Canada due to the very strict earthquake requirements here. The state of the art building, roofing, plumbing, and electrical systems are all available from a quality builder. There are solar water heater systems available for $1,600 that will supply most single family homes all of the hot water they need for ZERO energy cost. Radiant energy barrier in the ceiling is usually not mentioned because it costs a little more but, it can make a huge difference in your daytime comfort level at altitudes below 4,000 feet.
  7. Hot Deal: Don’t rush into buying something because it seems like a good deal. Beach properties and some other highly promoted areas are full of these bargains. This is always subject to “if it is too good to be true, it probably is not”.
  8. Health: Please do not rush into buying real estate until you know if the climate is right for you. We’ve heard people from Arizona claim the humidity caused them unacceptable breathing problems and renting in an area through both seasons will answer those questions for you.
  9. Culture: You shouldn’t rush into buying something without really understanding “Tico time and Pura Vida.” Renting for a while will allow you to know if you really can be tranquilo when the true meaning of mañana is “not today”.
  10. Disclosure: Don’t rush into buying something believing the seller or the Realtor is going to reveal any negatives in relation to the property. It takes time to find the warts.

Ten Reasons Why Buying Costa Rica Real Estate Can Be Smarter

  1. Recklessly purchasing is never a good idea, but in this market an experienced and professional Realtor (this is a very important factor) can and will show you purchase opportunities unlike anything we’ve seen in the last ten years, and many are being sold at a solid pace. While I am not of the opinion that the market recovery is so strong that all deals will be gone overnight, it is clear that in the current buyer’s market, now is the time to achieve the best strategic pricing both for personal use, and of course, long term appreciation.
  2. With rental contracts by law in Costa Rica stipulating a 3 year term, you are committing yourself to 3 years in a rental home or apartment, therefore, setting yourself up to buy in a much different market. While many rentals are done on shorter terms, in many cases, if you leave prior to a year time, you could stand to lose your deposit, which while not necessarily big money is a consideration.
  3. Lost equity: Buyers looking in the luxury or premier markets (for example in Escazu, Manuel Antonio, and some areas of Jaco) will likely pay between $4,000 – $5,000 per month for a luxury rental, thus dropping somewhere in the range of $180,000 during the course of their three year lease term in the home. While trial runs and being careful are important, the cost of higher end rentals leaves huge equity losses for the client which, with more aggressive purchase strategies could translate directly into returns on the total investment.
  4. Inventory cycles: With most of the bleeding inventory already off the market, and fewer and fewer REAL DEALS on the market place, the inventory to be found in a few years is likely not only to be more expensive, but also adjusted both with inflationary inclusions, as well as less motivated sellers.
  5. By renting, you don’t experience the ‘pride of ownership’ and it’s difficult to really take hold of the experience, to belong and to feel a real part of the area. This makes it more difficult to fully immerse yourself in the experience, cultivate your property, garden, relationship with neighbors, etc. It is also important that as a renter you will most likely be here on a tourist visa, requiring that you leave the country every 90 days. With a purchase, you can oftentimes start the residency process as an investor which can be an added plus.
  6. Renting a nice, furnished home is relatively expensive. I think a lot of folks make the mistake of trying to ‘rent first’ with a reduced rental budget, inevitably get locked into a property or neighborhood that does sit well with them and hence walk away thinking “Costa Rica is not for me” when they were simply in wrong micro area due to rental options available at their desired rental budget. Just like finding the right place to buy is of incredible importance and is a part of any good realtors dialogue with their clients, where you rent can greatly affect the experience and outlook on the country. Take it from someone who has lived in both cheap dives and luxury homes, that your experience and future vision of Costa Rica can be heavily impacted by your rental budget.
  7. On the other hand, if you’re landlord, a relatively high rent is good and one of the advantages you enjoy in owning real estate. Every month you pay rent is a month you could be collecting a return on your investment.
  8. Everyone, including our experienced team of long time residents here goes through an adaptation curve. Culture shock, linguistic challenges, local customs, etc are learned over time and nobody learns to speak enough Spanish to communicate effectively overnight. Working through this makes your experience in Costa Rica more rich and rewarding, but as a renter it’s often too easy to ‘pull the rip cord’ and not give yourself the chance fully enjoy your new experience in a foreign country and everything it has to offer. I have been an exchange student and lived in many countries and often times those first 3-6 months are challenging as you adapt… while blindly committing is irresponsible, like most things in life, the full richness and rewards are usually harvested over time and far too many renters confuse adaptation and adjustment to dislike.
  9. Many investors, if not the majority of purchasers in Costa Rica are not necessary looking for full time retirement or living. While purchasing a full time residence or retirement home can and should require a much more diligent experiential study of lifestyles, culture, etc. there are large numbers of clients who are purchasing here to diversify their investment portfolio, enjoy a second vacation home, corporate incentive, etc. For these clients, renting for long periods of time doesn’t make financial sense due to the rental premiums on the coast and equity sacrifices by missing purchase opportunities in today’s buyers market. If the purchase if for a second home or investment, renting for long periods of time will not necessary provide any additional insight.
  10. Making your home your own! In this world full of stress, there is an incalculable value of owning a piece of paradise, and having the opportunity to personalize, remodel, redecorate and enjoy your own piece of the world. While knowing you can go on vacation and pay to stay in a hotel room or rent someone else’s space in the world is nice, it doesn’t compare to the experience of owning a special property in a country like Costa Rica.

A little from each of them and also talk about if you are buying to live on a full time basis or buying for investment and/or vacation use. If you plan on becoming a full time resident we always recommend you rent in the location before you buy.

If you are still not sure whether renting or buying property is the right option for you.

Use the form below and we will have an agent contact you to help you decide.

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