Why Costa Rica is a Hotspot for Real Estate Investment in 2025

Costa Rica, a small but vibrant country in Central America, has long been a favorite destination for tourists, expats, and investors alike. Known for its stunning natural beauty, stable government, and welcoming culture, Costa Rica is increasingly becoming a hotspot for real estate investment. As we look ahead to 2025, several factors are converging to make this tropical paradise an even more attractive option for those looking to invest in property. From a thriving tourist industry to a favorable real estate market, Costa Rica offers a unique blend of opportunities for both short-term and long-term investors. In this article, we’ll explore why Costa Rica is poised to be one of the top real estate investment destinations in 2025.

Thriving Tourist Industry

Increase in Tourists Arriving Every Year

Costa Rica’s tourism industry has been on an upward trajectory for years, and this trend shows no signs of slowing down. Tourism continues to be a primary driver of real estate market growth, with a significant 14.54% increase in tourist arrivals from 2023 to 2024, and this number is expected to grow significantly by 2025. The country’s diverse attractions—ranging from pristine beaches and lush rainforests to active volcanoes and world-class eco-lodges—make it a magnet for travelers from around the globe.

The government has also been proactive in promoting Costa Rica as a premier tourist destination. Campaigns like the “Essential Costa Rica” brand have successfully positioned the country as a leader in sustainable tourism, attracting eco-conscious travelers who are willing to spend more on high-quality experiences.

Additional Flights Added to Each Airport

To accommodate the growing number of tourists, Costa Rica has been expanding its air travel infrastructure. Both Juan Santamaría International Airport in San José and Daniel Oduber Quirós International Airport in Liberia have seen an increase in flights from major airlines. New routes from cities in North America, Europe, and South America are making it easier than ever for travelers to reach Costa Rica. This improved accessibility is not only boosting tourism but also driving demand for real estate, particularly in areas close to these airports.

Stable Government

One of the key factors that make Costa Rica an attractive destination for real estate investment is its stable and democratic government. Unlike many other countries in the region, Costa Rica has a long history of political stability, with no standing army since 1949. The country has a strong rule of law, and property rights are well-protected, making it a safe environment for foreign investors.

The government’s commitment to sustainability and environmental conservation has also earned it a reputation as a forward-thinking nation. Policies aimed at preserving natural resources and promoting renewable energy have made Costa Rica a global leader in sustainability, further enhancing its appeal to investors.

Safety: A Key Advantage

When it comes to safety, Costa Rica stands out among Latin American countries. While no country is entirely free from crime, Costa Rica’s crime rates are significantly lower than those of its neighbors.

For real estate investors, this relative safety is a major advantage. It not only makes the country more attractive to tourists and expats but also ensures that properties are less likely to be affected by crime-related issues.

Increasing Foreign Investment

Costa Rica’s appeal to foreign investors extends beyond real estate. According to data from Cushman & Wakefield, the Central Bank, Procomer, and CINDE, foreign direct investment (FDI) in Costa Rica has been steadily increasing. In 2022, the country attracted 34 new investment projects and 81 reinvestment projects in sectors such as life sciences, advanced manufacturing, corporate services, and high technology.

This influx of foreign investment is creating jobs, boosting the economy, and driving demand for both residential and commercial real estate. As more multinational companies establish a presence in Costa Rica, the demand for housing, office space, and co-working spaces is expected to grow.

Favorable Real Estate Market

Big Demand for Luxury Homes

Costa Rica’s real estate market is experiencing a surge in demand for luxury homes, particularly in coastal areas like Guanacaste and the Papagayo Peninsula. High-net-worth individuals from North America and Europe are drawn to the country’s natural beauty, favorable climate, and high quality of life. Many are purchasing second homes or vacation properties, driving up prices in prime locations.

Increasing Amount of New Construction

To meet this growing demand, developers are launching new construction projects across the country. From luxury condos and villas to eco-friendly developments, there is no shortage of options for buyers. However, the increasing amount of new construction is also leading to a decrease in the inventory of buildable parcels, particularly in sought-after areas. This scarcity is likely to drive up property values in the coming years.

Digital Technology with Easy Use

The real estate industry in Costa Rica has embraced digital technology, making it easier than ever for buyers to invest in property. Virtual tours, videos, and online management tools allow investors to explore properties and manage their investments from anywhere in the world. Digital documents and online banking further streamline the process, reducing the need for in-person transactions.

Predicted Market Growth

According to industry experts, Costa Rica’s real estate market is poised for significant growth in the coming years. The combination of increasing demand, limited supply, and favorable economic conditions is expected to drive up property values. For investors, this means that now is an ideal time to enter the market.

Low Property Taxes

One of the most attractive features of Costa Rica’s real estate market is its low property taxes. Rates start at just 0.25% of the recorded value, making it an affordable option for investors. This low tax burden is particularly appealing to those looking to purchase multiple properties or invest in large-scale developments.

Commercial Real Estate Opportunities

In addition to residential properties, commercial real estate is also in high demand. Many buyers are interested in purchasing existing businesses, such as restaurants, hotels, and retail stores. There is also a growing demand for co-working spaces, as more people choose to work remotely. This trend is expected to continue, creating new opportunities for investors in the commercial sector.

Opportunities for Long-Term and Short-Term Investments

Costa Rica offers a wide range of investment opportunities, catering to both long-term and short-term investors. Many buyers are able to resell properties quickly or “flip” older homes and condos by making improvements. Land development is also a popular option, with many investors partnering with local developers to create new residential and commercial projects.

Financing Options for Foreigners

Financing real estate investments in Costa Rica has become increasingly accessible for foreigners. Local banks such as Banco Nacional (BN), BAC Credomatic, Lafise, and Banco de Costa Rica (BCR) offer financing options to non-residents. These banks typically require a down payment of 30-50% and offer competitive interest rates, making it easier for foreign investors to purchase property.

Residency Status with Real Estate Investment

Costa Rica offers a straightforward path to residency for real estate investors. Under the Investor category, foreigners who purchase property worth at least $150,000 are eligible for residency. This status comes with numerous perks, including the ability to open a local bank account, access healthcare, and enjoy tax benefits. For many investors, this is an attractive incentive to invest in Costa Rica.

Foreigners Can Own Real Estate with Same Rights as Locals

One of the most appealing aspects of investing in Costa Rica is that foreigners have the same property rights as locals. There are no restrictions on foreign ownership, and the process of buying property is relatively straightforward. This level of equality makes Costa Rica a welcoming destination for international investors.

Easily Rent Out Your Property

For those looking to generate rental income, Costa Rica offers plenty of opportunities. The country’s thriving tourism industry ensures a steady stream of short-term renters, particularly in popular areas like Guanacaste and the Central Valley. Many property management companies offer online tools to help owners manage their rentals, from booking and payments to maintenance.

Rental prices are on the rise, driven by increasing demand and limited inventory. While long-term rental options are scarce, short-term rentals can provide significant returns, especially in tourist hotspots.

Focus on Eco-Friendly Construction

Costa Rica’s commitment to sustainability extends to its real estate market. Eco-friendly construction practices, such as the use of renewable energy sources and sustainable materials, are becoming increasingly popular. The government’s goal of achieving carbon neutrality by 2050 is also driving demand for green homes, which are likely to become more valuable in the future.

Solid Infrastructure

Costa Rica’s infrastructure is another factor that makes it an attractive destination for real estate investment. The country has a well-maintained road network, making it easy to travel between major cities and tourist destinations. Fiber optic internet is widely available, catering to the needs of remote workers and digital nomads.

Investing in Costa Rica: Legal Considerations

While Costa Rica offers many advantages for real estate investors, it’s important to be aware of the legal considerations. Working with an experienced real estate agent and attorney can help you navigate the process and avoid potential pitfalls.

Risks and Challenges

No Established MLS System

One of the challenges of investing in Costa Rica’s real estate market is the lack of a Multiple Listing Service (MLS) system. This makes it difficult to compare prices and assess market trends. Partnering with a knowledgeable agent is essential to making informed decisions.

Lack of Verified Data

Another challenge is the lack of verified data on property values and market trends. Investors should conduct thorough due diligence and work with reputable professionals to ensure they are making sound investments.

New Large Developments and Initiatives

Several large-scale developments are set to transform Costa Rica’s real estate landscape by 2025. These include the Waldorf Astoria resort between Playas del Coco and Playa Hermosa, the NYA lake development near Liberia Airport, and the One and Only resort in the Papagayo Peninsula. These projects are expected to drive up property values and create new investment opportunities.

Favorable Climate and Biodiversity

Costa Rica’s climate is another major draw for investors. The Papagayo region, in particular, is one of the driest areas in the country, offering plenty of sunshine year-round. At the same time, the nearby rainforest provides a stunning contrast, making it a unique and desirable location.

The country’s incredible biodiversity—home to approximately 5% of the world’s flora and fauna—adds to its appeal. From national parks and volcanoes to beaches and waterfalls, Costa Rica offers endless opportunities for exploration and adventure.

Conclusion

Costa Rica’s combination of natural beauty, political stability, and economic opportunities makes it a hotspot for real estate investment in 2025. Whether you’re looking for a luxury vacation home, a commercial property, or a land development opportunity, Costa Rica offers something for everyone. With its thriving tourist industry, favorable real estate market, and commitment to sustainability, this Central American gem is poised to become one of the most sought-after destinations for investors in the years to come. Now is the time to explore the opportunities and secure your piece of paradise in Costa Rica.