Renting your home or apartment in Costa Rica can be a great way to generate passive income. Many property owners struggle with setting the right home rental price when they don’t have experience with it, or simply don’t know enough about the trends in their specific market.

There are unique considerations for setting the rental price if you’re considering renting out your home in Santa Ana or Escazú, a condo in Curridabat, an apartment in Rohrmoser, or even long-term rental in Nosara or other beach areas.

Setting the right price point for your rental will help ensure you get it rented quickly and fairly. Understanding the market is critical for this process, which is why the guidance of a local real estate agent will make all the difference.

Vicki KlunkVicki Klunk, LX Costa Rica

Some of the main factors to consider when setting a renting price for long-term rental in Costa Rica are the following:

Supply and Demand

The prices for renting homes in Costa Rica are greatly influenced by the balance of supply and demand. Each region of the country presents unique characteristics, leading to diverse preferences and needs. Take Rohrmoser, for instance, where there’s a large demand for medium-sized 3-bedroom apartments, yet are difficult to find. Therefore, prices might go up as more people want them. In places like Escazú and Santa Ana, residential communities are highly sought after, creating a consistently high demand for homes. Understanding these local factors is important for homeowners when deciding on fair and competitive renting prices. This way, they can match what people are looking for in each area.

Home's Conditions and Maintainance

The condition of your home and the associated maintenance fees are fundamental factors in determining the appropriate home rental price in Costa Rica. A well-maintained property is likely to demand a higher rental value as it offers added comfort and appeal to potential tenants. Maintenance fees must also be taken into account, since there will be yearly costs such as painting, electrical keeping and water pipe maintenance. By proactively addressing these maintenance needs, homeowners not only ensure the longevity and functionality of the property but also contribute to setting a fair rental price.

Additional Costs

Setting the right renting price in Costa Rica involves considering extra costs beyond the basic rent. It’s crucial to account for the IVA (Value Added Tax), which is a tax that needs to be included in the rental price, and it’s the responsibility of the renter to pay it. Additionally, there are other municipal taxes and luxury home taxes that might apply depending on location and home features.

Other Legal Considerations

When determining the rental price for luxury real estate in Costa Rica, it’s important to consider certain legal aspects. In the luxury market, rent is often quoted and paid in U.S. dollars. One notable feature is that leases paid in dollars typically don’t undergo yearly increases in Costa Rica. This stability provides both landlords and tenants with predictability and clarity regarding rental expenses over the course of the lease. Understanding and incorporating these legal nuances into the rental terms contribute to a smoother and more transparent rental process.

*What is a long-term rental in Costa Rica?

  1. In the Costa Rica real estate market, “long-term” often refers to rentals of 1 year or more. However, the law establishes a minimum rental term of 3 years. This means that a renter who duly accomplishes his or her obligations can legally stay for the period. If the contract has a term beyond three years, the higher term rules. The Tenant has to pay public services and utilities.
  2. Leases in Costa Rica follow Law No. 7527 (Urban and Suburban Leases Act). This law includes the dispositions that contracts need to have, as well as the minimum obligations between Parties.
  3. The main sections of the rental agreements include: the identification of both Parties (this includes the Good Standing Certificate in the case one of the parties is a corporation); the property’s information as it appears in the National Registry; a detailed description of the property with the installations, services, accessories, furniture, and the status that the tenant needs to maintain these items in; and, finally, the term, price, and destination of the property.

For help renting your home in Costa Rica, contact the LX Team

By Categories: Legal & FinancialTags: ,

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