The Best Places to Buy in Tropical Costa Rica

On every scouting trip I take to Costa Rica, I see some new wonder of nature…

Neon tree frogs, big-billed toucans, and the occasional sloth slowly making its way through the rainforest canopy while electric blue butterflies flit among the vivid flowers. I’ve tailed dolphins and whales by boat—and enjoyed spectacular Pacific sunsets from the deck, too.

Life in Costa Rica is best enjoyed outdoors, in short sleeves and surrounded by natural beauty. It’s a place to relish locally grown coffee and fresh fruit from the farmers’ market after a stroll on the beach or a hike in the lush forests.

For real estate buyers, there’s plenty to appreciate, too. I’ve explored Costa Rica as it’s grown from a low-key destination for surfers and adventurers into one of the world’s top eco-tourism hot spots.

And I’ve found plenty of opportunity to buy and own real estate with awesome potential for gains. I’ve scouted all over the country but two locations stand out. I’ll tell you why in a moment, but first, let’s look at what makes Costa Rica so appealing…

What Makes Costa Rica Special?

Today’s Costa Rica is a tourism powerhouse. The same number of people visit the country each year as live there—five million or so. Costa Rica’s popularity goes back to the 1980s, when the government looked around for something to drive the economy, and realized the country was a natural paradise.

One quarter of the country has now been conserved as a national park… where you can hike in a tropical forest in the morning and surf some of the world’s best waves in the afternoon. In fact, Costa Rica has been named the world’s number one destination for sustainable tourism by National Geographic.

Eco-lodges have been joined by resorts, major hotel chains, and high-end boutique hotels. And former fishing villages have been transformed into bustling seaside beach towns that attract travelers from around the world.

Costa Rica is a secure and peaceful country, proudly democratic and respectful of personal freedoms. It has a stable economy and a high standard of living. Foreigners can use the highly regarded healthcare system, which costs a fraction of what healthcare is in the U.S. (Life expectancy averages 80.75 years—that’s higher than the U.S.!)

This little country, sometimes called the “Switzerland of Central America” because of its stability and prosperity, has also been named the happiest in the world… multiple times. And it’s home to a Blue Zone, where people tend to live much longer than average, thanks to climate, diet, and lifestyle.

Then there’s the fact Costa Rica is close to home. For instance, a two-hour 40-minute flight gets you from Miami to the main international airport in the capital, San José, and it’s only five hours from New York. Thanks to low-cost carriers like Spirit and JetBlue, fares are competitive. So, it’s quick, easy and affordable to get to Costa Rica.

It’s no wonder tourists are coming by the millions, and expats—and remote workers—are increasingly making their home here. Costa Rica’s tourism had broken records every year since 2010—until the pandemic put its growth on pause. But this year shows every sign that tourism is back in full stride.

All this is good news for real estate investors who can lock down the best properties ahead of the next wave of growth.

So, let’s have a closer look at where I see opportunity in this paradise…

Follow the Path of Progress South

For decades, Costa Rica’s Southern Zone stayed off the radar of tourists, investors, and second-home buyers. Everyone knew where it was. Some understood how much potential it held. But very few spent time there because it was difficult to get to.

South of Manuel Antonio, a resort district and site of the country’s most visited national park, the road was unpaved. Tour operators would tell you to give it a miss unless your idea of a vacation involved bouncing along the rutted, pot-holed road.

Then came a big transformational event—the kind of thing I’m always on the lookout for.

After 30 years of rumor, new roads were finally built, making the Southern Zone easily accessible for the first time.

The roads opened in 2010 and changed the game. The drive from the country’s capital of San José and its international airport is now an easy three hours… with panoramic ocean views along the way.

If Costa Rica is all about natural beauty then the Southern Zone is its poster child —an unspoiled paradise home to vast national parks, where a guide will point out chattering toucans, curious coatis, and silky anteaters.

The area is becoming more upscale. It’s a sign of how the Southern Zone is positioning itself. It’s aiming high… targeting affluent travelers. It’s home to some of the country’s top eco-lodges and hotels. Boutique and high-end, but still low-key.

Yet there are no big tour groups. No sprawling resorts or rows of condo towers by the water. All good news for anyone who owns the right kind of real estate here. The Southern Zone is sticking to this boutique track.

As an investor, I care about this. The laws protecting the region’s immense natural beauty also boost real estate values. That natural beauty brings in well-heeled tourists…the kind who are happy to pay big bucks to rent a comfortable home. As an added bonus, you won’t be in competition with thousands of residential communities.

Investing in real estate here means you’ll profit from the Southern Zone’s Path of Progress and the region’s ongoing growth and development. But you’re not taking on the huge risk that early pioneers did in this locale.

Find a well-placed ocean view property and you could do well as the area develops and real estate grows more scarce.

Take one deal I brought to members of my Real Estate Trend Alert group in November 2021. Members were able to buy ocean view lots for a get-in price of $92,000. Those lots now would go for $131,463—an uplift of just under $40,000.

Uncover Value in a Tourist Hot Spot

Costa Rica’s northern Pacific coast was first discovered by outsiders when adventurous surfers started coming in search of waves. Then, in the ‘80s and ‘90s, the Costa Rican government, realizing the value of what they had, got in on the act. They promoted this coast as the natural paradise that it is, constructed infrastructure, and pioneering expats and second home buyers began to pour in.

But the Liberia Airport really opened up this region. Regional hoteliers clubbed together to underwrite more flights from the U.S. and Canada, and the region began to boom. Now, with flights direct to major hub cities, Liberia is easily accessible from just about anywhere.

In 2002, Delta started regular direct flights to the U.S. and sleepy fishing villages were transformed into internationally known buzzing beach towns. Resorts from the likes of The Four Seasons, JW Marriott, Westin, Ritz-Carlton, Secrets, and others were built.

In 2003, Liberia airport saw 50,000 passenger arrivals. By 2008, that number hit 420,000, more than an eight-fold increase. In 2019, the airports saw 1.1 million passengers. And following the pandemic dip, arrival numbers are once again setting records with 2023 holding the best first quarter to date.

The region has become a world-class destination where you can play golf, relax in a spa, and dine in chic restaurants. Or you can have a more down-home and laidback experience at funky beach bars and rustic seafood restaurants. This being one of Costa Rica’s prime destinations, you can also go surfing, ziplining, horseback riding, trekking in the jungle, birdwatching…

There’s a lot of money going into the region. It’s buzzing with development: new resorts, a new marina… but residential construction can’t keep up with demand. Supply is lower too. A contact on the ground reports that fewer permits to build are being issued.

And given the restriction on building on the coast in Costa Rica and the premium prices for desirable land, a lot of this new construction is inland or doesn’t offer views. Yet, because of the popularity of the area, people still pay top dollar.

Conventional wisdom says that the days of cheap property are long gone on Costa Rica’s northwest Pacific coast. But there are still opportunities here for the right kind of investor. For example, I found a prominent developer who bought up sizable and well-located land parcels at fire sale prices during the 2008 financial crisis. So, despite shrinking inventory and new condo communities and even resales around this region commanding higher prices, I was able to offer my Real Estate Trend Alert group a deal on ocean-view luxury condos, thanks to the low price he paid for the land.

We were able to get in from $268,400 for ocean-view two-bed condos that I figure will be worth $400,000 three years after delivery. That’s an uplift of $131,600.

On top of that, I figure the condos could bring in up to $32,500 every year from rental income between the millions of vacationers who visit… and the tens of thousands of snowbirds, expats, and remote workers who flock to this region and need a long-term arrangement.

I know I’ll be back in Costa Rica soon, and I can’t wait. It’s among my favorite places to explore and scout… and I’ve no doubt I’ll see more wonders of nature along the way.

Ronan McMahon is the editor of Real Estate Trend Alert and a contributing editor to IL. He spends at least six months a year crossing the globe in search of the best real estate deals worldwide. For more about his RETA group, and to become a member, go here.

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