COSTA RICA AS AN INVESTMENT CHOICE
This country which has an area of 19,730 square miles is at times compared to west Virginia in size has a population of 4.5 million and a literacy rate of 96%. The language is Spanish mainly with a large amount of English speakers, public schools teach English as a second language. The currency is the Costa Rican colon which exchanges at around 550 CRC for $1.oo at this moment and has been moderately stable for the past 3 years.
Costa Rica which means “Rich Coast” has stood out amongst its neighboring Latin American countries thru out history due to the abolition of the military forces which allows the government to invest time and money into it’s infrastructure, education and social services. It’s richness is in the culture that has been embedded in the citizens and in the nature that surrounds them.
What Makes Costa Rica Rich?
This is a country where nature is always by your side and that is what has helped the Costa Ricans become gentle and friendly people. Everywhere you go in the country you will find people that are willing to help you whether you have a flat tire or need the directions to get to your destination. Therefore, it has been amongst the countries that are happiest in the world.
The tropical climate also leads the Costa Ricans to be relaxed and easy going. Nothing like laying in a hammock by the beach with a pipa in your hand while you wait for the hottest part of the day to go by so you can finish your chores in the late afternoon. Even though it is such a small country the climates vary from tropical coast to the cooler cloud forest with an incredible range in between. This of course generates a huge variety of biodiversity that is found in very few countries in the world. Also, being an isthmus between north and south America creates a bridge for migrating fauna which increases the variety of species which can be seen.
Political and Economic Stability:
Amidst the political and social turbulence that plagues many of the Latin America countries, Costa Rica has been able to sidestep that. The economic, political and social stability of Costa Rica is one characteristic that has distinguished it through its entire contemporary history and as one of its most important strengths, has enabled it to reach great success in luring foreign investors.
Costa Rica’s government has been a stable democracy since 1949. The country’s success was recognized in 1987 when President Arias Sanchez was awarded the Nobel Peace Prize. The award was granted for the president’s high ethical standards and the image that he portrayed as a representative of the Costa Rican people. The people share in his high ethics and morals. They are recognized to be among the top educated and socially aware people in the world.
Foreigners Owning Property:
Any foreigner, resident or non-resident has the same rights as a citizen, except for voting rights at presidential and municipal elections and can therefore purchase and own Costa Rica real estate legally. There are only two exceptions:
-A foreigner cannot own 100% of a property in a Maritime Zone.
-A foreigner cannot own any IDA (now INDER) property, in which land is donated to poor farmers.
Titled property is registered in what is called the national registry and is appointed a number that a person can look up to find if the property is legal and free of any ties.
Landlords get good returns in Costa Rica
Gross rental yields on residential property in Costa Rica remain generally healthy, at around 6.5% to 7.9%. Our research suggests that these returns are slightly below what one would have expected 5 or 10 years ago, but not much less. These are quite good returns for landlords, even when costs such as taxes and other costs are subtracted from the gross figures.
We have not found much difference in returns between different types of properties. However, our research tends to concentrate on the higher end of the market, and as in most residential markets around the world, even higher rental returns are likely to be obtainable on smaller properties in less-desirable areas - though of course these properties are likely to be more trouble to manage.