Whether you’re a seasoned commercial real estate owner or are just beginning to consider your investment options, there is an opportunity out there! Let’s discuss some of the current investment and/or commercial real estate Costa Rica trends.

So, we thought we’d discuss the why, the benefits, and the opportunities, before hitting on what’s trending in 2024, not only from a buyer or developer standpoint but also from a demand point of view. Read on!

Why Do Investors Choose Costa Rica?

Why Do Investors Choose Costa Rica

Costa Rica’s political stability, high standard of living, investment opportunities, and thriving tourism and business climates have long made it a popular destination for savvy investors and multinationals. 

For example, since 1990, the nation’s tourism industry has witnessed 7.4% year-on-year growth. In 2021 and 2022, Costa Rica earned the top ranking in the Greenfield FDI Performance Index: Costa Rica is the world’s best-performing nation relative to its size, when it comes to attracting foreign direct investment (FDI). Costa Rica’s scores – 11.4 (2021, opens as a PDF) and 12.7 (2022) – put the country significantly ahead of runners-up (Lithuania and the UAE in 2021; North Macedonia and the UAE in 2022).  

Bottom line: Costa Rica stands out as one of the world’s most attractive investment markets. In addition to ranking #1 in the Human Development Index in Central America (UNDP, 2021) and #1 in innovation in Central America (WIPO, 2021), we also boast the following statistics and indicators: 

  •     Costa Rica receives 2.5+ million annual international tourists;
  •     Home to 7.4% year-on-year tourism growth since 1990; 
  •     #1 for the Greenfield FDI Performance Index;
  •     High regional ranking on the 2022 Freedom in the World Country Report;
  •     A World Bank success story
  •     The world’s #11 country, according to the BTI Transformation Index;
  •     The World’s Happiest Country
  •     A top-5 global retirement paradise;
  •     One of the globe’s most family-friendly destinations
  •     An investment ally for more than 400 multinationals;
  •     Latin America’s #3 for intellectual property rights
  •     And more.

We’re happy to discuss further but, for the sake of this post, let’s keep it at this: Costa Rica’s investment climate is demonstrably strong, and has attracted investors for decades. With that in mind, here’s what’s currently trending: 

Current Trend: Multifamily Real Estate

Current Trend_ Multifamily Real Estate

Generally speaking, multifamily real estate refers to any residential building containing more than one housing unit. Note: There must be separate units – think: separate entrances, separate kitchens, separate living spaces, etc. – for a property to qualify as multifamily; a single residence whether multiple families reside isn’t what we’re discussing here. 

We’re all familiar with the most common examples – duplexes, townhomes, apartment complexes, and condominiums for sale – although these are a little different here in Costa Rica. But the general rule stands: Essentially, any property with multiple units (even if the owner resides in one of them) can be considered multifamily.

In Costa Rica, duplexes and apartment buildings – at least, here in the North Pacific province of Guanacaste – aren’t very common, but townhomes and condominium high-rises are very popular. Both are housed (pun semi-intended!) within the umbrella term, condominio, which is colloquially (and legally) used to refer to a gated residential community for sale, of any type (be it single-family homes, townhomes, or multi-family condominium buildings), that share communal spaces and certain amenities, such as gated security. 

From a legal point of view, a condominio for sale denotes real estate where individual units (or homes) within a larger property are privately owned, while common areas and amenities are shared among the unit owners.

So, with all that said, multifamily property is one of the growing real estate Costa Rica trends right now, especially here in the North Pacific, where open land can be hard to come by – and is often pricey, when you do. For investors, multifamily property allows you to purchase a single piece of land and develop multiple units – and, often, multiple luxury units ­– to not only get the best bang for your buck, but also the best bang for your buyers’ bucks.  

If you’re interested in a multifamily investment, your search should begin with the following checklist:

Location

Location is paramount from an investment standpoint, particularly for multifamily properties. You’ll need to pinpoint a stellar location that attracts your ideal buyer, whether that means a downtown Tamarindo locale for a condominium of 1-2BR units attracting younger buyers or an ocean-view plot in the hills of Playa Flamingo, for high-end condos appealing to families. Bottom line: Know your product and your buyer before you begin to scout locations.

Total Number of Units

Next, evaluate the entire property: How many units and rooms in each? If this is your first project, you may want to consider a smaller-scale multifamily building – which, in Costa Rica, likely means 6-10 units. These options offer significant potential with less risk or headache and are generally more affordable for first-time investors.

Potential Income

Determine the potential income of the property. As Costa Rica’s MLS still isn’t fully centralized (we’re working on it!), this is where a great real estate agent comes in: Talk with someone who has extensive experience in selling multifamily condo projects, in your specific target area and for your specific target buyer, to determine what buyers are paying for different property types.

Costs

In Costa Rica, building costs vary widely, depending on your location, level of construction, and other factors. In theory, multifamily is more cost-effective to build per residential square meter, but keep in mind that you will also have to include the cost of those community amenities – from the simplest entrance gate and parking facility to retaining walls, luxury infinity pools, landscaped gardens, BBQ ranchos, and more. 

As for ballpark numbers, both single-family and multifamily residential construction typically gets benchmarked around $135-$210 per sq. ft. here at the beach. It’s important to block out your expenses well in advance – and always add a 15-20% buffer to your budget for unforeseen costs. 

Learn More: Costs of Building a Home in Costa Rica

From our CEO & lead broker, Becky Clower, a real estate investor and developer:  

From our CEO & lead broker, Becky Clower

My newest development project, Punta Playa Heights, is a 16-unit condo project and relaxed beach community brimming with indelible moments, nature connections, and boundless discovery, paired with affordable luxuries, coastal authenticity, and off-the-beaten-path ambiance within a gated setting.

I chose my location – above Pirate’s Bay, a secluded beach that’s also very convenient to Playa Conchal, Brasilito, and Flamingo, as it’s a very attractive community and area for everyone from snowbirds to full-time residents. 

I also opted for a low-density project (just 8 residences per building, 16 in total), which is definitely a part of the current real estate Costa Rica trends: It’s more exclusive and, at least in this case, more appealing to buyers, as each residence feels like a true home. We’re also including important amenities that appeal to buyers’ values and needs, such as solar power, elevators (great for convenience and aging-in-place!), underground parking (perfect in the rainy season), and more. I really leveraged my market knowledge to get in my buyers’ heads and answer their most pressing needs, which I think is of the utmost important to any project’s success.  

The project’s two towers reside within Punta Playa Vista, a 25-acre gated community that encompasses densely treed forest and lush countryside overlooking striking Pacific Ocean panoramas. Here, our neighbors include another ocean-view condo development, single-family homes, and the new Mango Walk subdivision, a gated neighborhood of single-family homes. This location was doubly attractive, as there was already existing community and infrastructure, which not only adds to the appeal but helps minimize some of my costs.

We’re still under development but, as testament to the growing trend and appeal of multifamily properties, Punta Playa Heights is already over 75% reserved, and we are just beginning construction this month (June 2024). The market is hot!

Multi-Family Real Estate for Sale     Development Property for Sale

Current Trend: Commercial Real Estate

Current Trend_ Commercial Real Estate

Commercial real estate is an umbrella term for all properties used for business purposes – from offices and retail spaces to warehouses and hospitality businesses. 

Commercial real estate investors earn income by leasing spaces to businesses, often benefiting from longer lease agreements, higher rental yields, and significant property appreciation. As a counterbalance, however, commercial real estate typically requires higher initial investments, involves more complex management, and is more sensitive to economic fluctuations.

Note: Multifamily projects are often lumped in and/or considered a subset of the broader commercial real estate sector, while other times it is treated as a distinct category. For the purposes of our local market and current real estate Costa Rica trends, they are both real estate investments but they are separate, as multifamily projects are residential real estate, while commercial real estate is, well, commercial.

Very generally speaking, investment properties in Costa Rica can be classified into three categories: existing businesses, hotels, and income-producing homes/vacation rentals. Existing businesses include restaurants, coffee businesses, shops, and more, while tourism & hospitality extends to hotels, B&Bs, retreats, vacation rentals, villas, and more. 

Of course, commercial real estate also extends to the actual real estate that houses businesses – and that’s a huge chunk of where the opportunity currently lies: Business owners seek modern, updated commercial buildings located in high-traffic areas, preferably with primary road frontage. Building a commercial center, whether it’s a single-level strip or a multi-level building, represents big opportunity for ROI.

From our CEO & lead broker, Becky Clower, a real estate investor and developer: 

From our CEO & lead broker, Becky Clower, a real estate investor and developer

Plaza Mar Azul, my Playa Flamingo commercial development, is another great example of current trends – specifically, how well they respond to market needs.  

We broke ground on Plaza Mar Azul early this year and I am incredibly excited to share that our entire commercial center (all 12 units) are already rented.

If you know the market, though that’s no surprise: Plaza Mar Azul is located in the highly sought-after Playa Flamingo area, home to the new $50M Marina Flamingo, as well as a tight-knit international community, several gated communities, and upscale real estate that dots the hills. People really want to live here and so, in turn, business really want to set up shop here.  

That said, there was a hole in the market: More businesses sought opportunity than there was opportunity available. That’s exactly the kind of opportunity a commercial real estate investor should look for: Don’t build where everyone else has already build but, rather, build where people will want to set up shop next year. 

I also had a personal motive: Plaza Mar Azul will soon be home to BWP Group headquarters! It will serve as an incredible home office, close to home and convenient to our other offices north and south. Again, that’s the great thing about choosing a great location: You can eliminate any potential tenant objections, by answering their needs and concerns through careful site selection and building choices. 

Hotels & Businesses for Sale     Development Property for Sale

Current Trend: Storage Facilities

Current Trend_ Storage Facilities

A subset of commercial real estate, we thought we’d mention this separately because it’s a big trend right now 

In beach areas such as ours, here in the North Pacific, storage space can be tight. Pair that with a country that hasn’t developed a culture of storage facilities, and you have a recipe ripe for prime investment. 

Whether you purchase a turnkey facility or build new, storage facilities (often combined with secure parking) offer an easy business opportunity, with very little overhead, low staffing requirements, and excellent cash flow. Just be sure to choose a location that is convenient and easily accessible. 

Hotels & Businesses for Sale     Development Property for Sale

Know This: Investment Incentives

Know This_ Investment Incentives

Beyond an attractive business climate and ROI, Costa Rica offers many incentives for investors, from large multinational corporations to individual investors. 

Without going into the multinational and major corporation side of things, for individual investors, the country also offers investor residency, which yields its own benefits and incentives, including: 

  •     Tax Exemptions: Coming soon! A recent law (still in process) will grant the investor residency category a significant import tax exemption on household goods and vehicles.
  •     Investment Tax Exemptions: Coming soon! The same recent law will provide additional tax exemptions, including transfer tax exemptions, income tax exemptions, and other business-related tax exemptions.
  •     Legal Right to Reside: As a resident, you can stay in Costa Rica for as long as your residency is valid.
  •     CCSS Healthcare: As a resident, you’ll pay into Costa Rica’s public healthcare system, known as the Caja or CCSS. This grants you access to all public healthcare services, with no copays, deductibles, or additional fees, ever.
  •     Permanent Residence: Upgrade to permanent residency after three years, granting a longer residence period and the right to work, as well as an optional path to citizenship.
  •     Ease of Daily Life: Get a driver’s license, easily open bank accounts, connect utilities, get a cell phone, request a firma digital (digital signature hardware, widely used in Costa Rica), and more. 

Want to Discuss Costa Rica Commercial Investment Trends & Opportunities?

Want to Discuss Costa Rica Commercial Investment Trends & Opportunities

If you’re looking for commercial properties on Guanacaste’s Gold Coast, then welcome to our wheelhouse! From luxury hotels to water sports businesses, from vacation homes to service industry businesses, we broker, offer, and represent a wide range of Costa Rica investment properties for your consideration.

Finding your right fit is not an easy task. At Blue Water Properties of Costa Rica, we’re here to help. To discuss, to advise, and to advocate on your behalf. We’ll send you the properties that fit your budget. We’ll recommend excellent residency and business attorneys. We’ll even put the word out on that uncommon gem you’re after (but that hasn’t yet hit the market).

Along the way, we’ll help you explore all the many possibilities, joys, and roads to life in paradise. That’s what we do. We thrive on relationships. We crave connection. And our goal is never to “sell a business;” it’s to fulfill dreams. It’s to make people happy. It’s to help you. Genuinely help.

We promise the fastest communication and best services in the industry. We will work to deliver on your dream. We will never pressure you. And we really do hope we’ll become friends along the way.

We’re proud to offer some of the best Costa Rica real estate, from condos and homes to land and businesses for sale. So, go ahead – try us. Give us a chance to show off our expertise – and wow you with the possibilities! We look forward to it.