If there's one great place to enjoy a vacation or even relocate to, it's beautiful Costa Rica! In 2023, the country received an unprecedented number of visitors, and this will likely continue this year.
This means that if you have an investment property in Costa Rica, you've got a lot of opportunities! But there is one challenge that comes with every opportunity.
The competition is fierce, and you may struggle to see higher returns for your rental home. We'll show you how to succeed as a real estate investor in Costa Rica.
Here's what to do:
Conduct a Rental Analysis
Your first step should be to assess how much you can reasonably charge as a rental fee.
If you charge too high a price, you'll deter potential tenants. This is not the ideal way to get higher returns. Stay within the range of your quoted price as much as possible.
You can always charge more, but you'll have to offer a better deal to your tenants. You can do this by offering more property amenities, a fully-furnished home, professional cleaning services, etc.
Follow the Law
Before you seek tenants, you'll have to familiarize yourself with the standard guidelines for Costa Rican landlords. To work in your favor, you'll need to outline the tenant's obligations within the lease agreement.
For example, you'll need to specify penalties in case your tenant terminates the agreement earlier through no fault of yours. The standard practice is that you can keep their security deposit.
Historically, Costa Rica has been pro-tenant, so it can sometimes be difficult to evict an irresponsible tenant. To avoid any hassle, always filter out the best tenants first.
Work Toward Tenant Retention
Whether you operate a vacation rental or want to target residents, you don't want to have a high tenant turnover. This will bring the added stress of having to keep finding new tenants. It can also tarnish your reputation as a landlord in the long run.
You have to work toward building a long-term relationship with your tenant. You must see them as your customers, who'll keep paying for your service if you offer quality.
To build this relationship, you'll need to attend to their needs. If there's a repair issue, it should be dealt with immediately. If they have questions, you should be able to respond as quickly as possible.
This can be a major strain at times. The best solution is to hire a property management company to handle the most burdensome tasks.
Rent Your Investment Property in Costa Rica
Now you know how to earn higher returns from your investment property in Costa Rica.
Your first step should be to conduct a rental analysis. You'll want to stay within the range of the quoted price. You can charge more if you offer more tenant services and amenities.
Make sure you're compliant with Costa Rican law before seeking tenants. Your long-term goal should be to ensure tenant retention.
This is much easier if you have a property manager to help you. PMI Costa Rica has over 20 years of experience and is your best choice.
