Costa Rica – Renting
I meet a lot of folks who plan to move to Costa Rica and want to buy some property right away.
I pretty much always advise the same thing. Don’t! Costa Rica has an huge number of locations that you might want to call home, and you can’t find them by making a few trips to this country. In fact, where to live in Costa Rica is probably one of the most important things to consider!
I have lived here several years, and I can say that even after that much time, my wife and I find some new spot where we would like to live, and we do this about every 2-3 months.
My suggestion to anyone is be patient. Come to Costa Rica and spend at least nine months to a year just traveling the country. Why? Two reasons:
First, about 55% of those who come to this country return to their home country within one year. Maybe it is homesickness or the inability to adjust culturally, but it is a fact. If you own a home, you are financially not liquid and more important, you are tied here until the house is sold. I teach this to those who take one of my relocation tours.
Second, you will almost always save a HUGE amount of money. You will find new places, expand your concept of what you might like, plus you’ll learn the customs and the culture around buying property. You’ll know where to find the good deals, and you will be FAR less likely to get taken!
So what do you do? I suggest you find a nice centrally located home, apartment, or condo and RENT.
Rental laws in Costa Rica heavily favor the tenant. If you are comfortable with Spanish, the actual law is here. Basically, you can sign a rental contract with the owner (landlord) for any period of time you like. What is interesting as that even if it is for six months, the landlord cannot cancel or make changes (see below) for three years. You are pretty much protected. If the rental is in dollars, rent increase are negligible or non existent. If it’s in colones, they can raise it 15% each year. Furthermore, if the rate of inflation was more than 15% during the previous 12 months, they can raise it by that amount. This is article 67.
Further, if you do sign a three year lease, you can pretty much leave at any time without penalty… though you would likely lose your security deposit.
So what I am saying here is that you can find a nice place to live for a year… never touch your principal, and have time to get to know Costa Rica. You will have time to think about the important things you will want in a home; things such as being near shopping, the beach, good hospitals (important if you are much over 60 or suffer from bad health problems). Whatever you decide, it will be better decision.
Finally, if you do decide to rent, why not rent a vacation home and not just a condo?
Vacation Rentals
Vacation rentals do not fall under the laws above. Short term rentals all popular for vacations, and it is strictly between the parties. You have no protections as far as I know.
One other important thing. Vacation rentals, even the best ones, are vacant for many, many weeks each year. This costs the owners money. Theowners rightfully make up for this by pricing it higher for shorter terms and the holidays.
Many owners would LOVE a longer term deal as that is much less work for them and they still get the money! So… FInd a nice vacation rental and negotiate! Tell them you want it and will pay cash for nine months to a year and watch them drop that price. It’s a clear win-win. If they do not drop it for such an great offer, shop elsewhere as they are just too dumb to realize a good deal when it bites them. Also, if you can afford it, offer 50% cash up front and 50% mid way.
Renting and Telephones
If you rent, the landlord will likely be the owner of the phone line in the house. In Costa Rica, many landlords turn OFF the ability to make international calls. Some also turn the phone off for the reception of international calls. While the outbound calling thing can maybe be solved by using a calling card (purchased in Costa Rica), your friends, family or business associates may not be able to call you. This is often a negotiable issue and should be covered in your lease that the landlord will continue to provide the phone line and make available incoming international calls. Some landlords absolutely refuse to allow outbound international calling, so if you don’t have a cell phone, this may be a problem.
Other stuff
Renting a furnished apartment, condominium or home can be a good alternative. I actually did this when I first came here. All my furniture and a fair part of my personal effects remained in storage in Chicago. I then ‘released’ them to be shipped here once I found the right spot for me.
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