Costa Rica in the spotlight of investors
Investment in Costa Rica has diversified
Costa Rica has done a great job at positioning itself as one of the most solid investment markets in the region. While largely tourism-driven, the human capital and solid infrastructure are also other great draws that keep garnering foreign investment, both in the tourism sector as well as in others. Historically, Costa Rica has always had two major categories of real estate investors. There is a large percentage of people looking to purchase real estate in Costa Rica due to the lifestyle factor. Walks to beaches, dense rainforests, and a peaceful, laid-back way of living are some of the most common features that people envision when they think of relocating or retiring in the country. And that popularity seems to become more widespread with the passing of each year.
Recently, International Living Magazine named Costa Rica the top destination to retire in 2021. Among the highlights, the number praises Costa Rica for offering first world services for optimal quality of life, including renowned medical institutions, a low cost of living, and a diversified and multicultural setting.
The country has also amassed notoriety among investors. The tourism industry contributes more to the country’s GDP every year and has reached historic percentages of up to 12.5%. Among many international recognitions, the CEO World Magazine ranked it as the best country to invest in tourism in Central America in 2019. In 2020, the world pandemic and virtuality put the spotlight in the country again as digital nomads flocked to Costa Rica to live their dream lifestyle: working and living in paradise.
Aside from the lifestyle seeker wanting to relocate to paradise and shift their lives entirely, there is another buyer persona among our clientele, and that is the savvy investor looking for cash flow opportunities and solid records for revenue. But this buyer profile has proven to be more dynamic, with some new trends that seem to be gaining traction.
The market had seen significant shifts and of course, it is the buyers who are driving the change. An increasing interest in investors looking to merge lifestyle and income became very apparent. We call these buyers “lifestyle investors” because they crave both ends: the benefits of living and enjoying the culture, as well as reaping the benefits of a bottom-of-the-market purchase with strong rental returns. On the other side of the spectrum, many institutional investors who were solely looking for sources of income are becoming more interested in supporting nature-based solutions.
Lifestyle Investors
The desire to relocate to Costa Rica is nothing new. But a new layer has been added to the criteria of these buyers. Now more than ever people who want to relocate to Costa Rica want to do it on their own terms. Not only do they want to live here but they also want to leave their former lifestyles behind. They want to be able to diversify their income and add another stream of revenue, and real estate has become a great alternative to generate rental cash flow.
There are plenty of properties in the market that are apt for full-time living that also lend themselves to short-term rentals for vacationers. Take as an example Casa Sonidos del Agua in Manuel Antonio: it just recently entered the market, and it has amassed great attention for being one of the few properties in the area that has everything to work as an investment where you can live and collect rent on the side; great views, additional guest home building site for one, and a proven record as a rental.
Green Investing in Costa Rica
Among institutional buyers, there is a growing demand for eco investments. Green investing has been a predominant topic in our conversations with investors as many of them are shifting towards supporting development that aligns with the conservation of the environment. Costa Rica is a hub for niche markets like ecotourism due to its richness in natural resources, and many green-investors are finding in the country ideal alternatives in the form of nature-based solutions that also generate solid returns on investment.
A great example of the types of assets that green investors look for when they turn their eye to Costa Rica is the Nativa Development. Located just 14 miles north of Jaco, Nativa is an enclave of luxury condos and estates and also the home to the only transition forest of the Central Pacific. The listing of this entire resort property is not only a tremendous opportunity to acquire an already consolidated development thus lowering the risk of the greenfield investment, but it is also a one-of-a-kind opportunity to put money to work towards ethical land management.
While most of the valuable resources of Costa Rica are protected by state-owned conservation areas, a small yet significant amount is still owned privately. While the country implements conservation strategies in public infrastructure; they also acknowledge and encourage foreign investment towards green solutions.
If you want to have professional assistance when investing in Costa Rica, make sure you contact us.