Published by Hardy Real Estate Group | September 2026 | Los Sueños Resort, Herradura, Costa Rica
Estimated read time: 7 minutes | Category: Investment Insights
A buyer walks a beautiful ocean view condo in Herradura, runs a quick calculation based on the nightly rate the listing agent mentions, multiplies by an optimistic occupancy figure, and concludes the property will cover its own costs with room left over. Six months later the actual numbers arrive and they look nothing like the projection.
This happens constantly, and the cause is almost never the property. It is that the buyer evaluated a home when they should have been evaluating a business. A rental property produces income through a chain that includes zoning permissions, HOA rules, management quality, guest demand patterns, and tax obligations, and a weak link anywhere in that chain shows up in the annual return.
Hardy Real Estate Group works both sides of this equation. We sell properties in Los Sueños and across the Central Pacific Coast, and through HRG Vacations we manage many of them afterward, which means we see how the promises made at closing compare to the revenue that actually arrives. These are the five questions we push our buyers to answer before they commit.
Question One: Can This Property Legally Be Rented Short Term?
Start here, because a negative answer makes every other question irrelevant.
Short term rental permissions in Costa Rica depend on several layers. Municipal zoning governs whether the area permits tourism accommodation. The property’s own registration and land use classification matter. Condominium regulations and HOA bylaws frequently impose their own restrictions, and these can be stricter than anything the municipality requires.
Inside Los Sueños, individual communities within the resort have their own rules regarding rental activity, minimum stay lengths, and whether guests access resort amenities. A residence in one community may operate freely on nightly rentals while a comparable unit elsewhere in the resort faces a thirty day minimum.
Get this verified in writing by a Costa Rican attorney during due diligence. Confirming it with the seller or the listing agent is insufficient.
Question Two: What Did This Property Actually Earn Last Year?
Projected income is a sales tool. Historical income is evidence.
Ask for gross revenue by month for the last two years, occupancy by month across the same period, the average nightly rate achieved, and the full expense picture including management commission, cleaning, utilities, HOA dues, maintenance, insurance, and taxes. What you want at the end is net income to the owner.
Monthly detail matters more than annual totals. Costa Rica’s Central Pacific runs a pronounced seasonal pattern, and a property earning most of its revenue in a ten week window is a different asset than one holding reasonable occupancy through the green months. The annual figure looks identical while the risk profile diverges completely.
If the seller cannot produce this data, treat that as information. Either the property has not been rented seriously, or the numbers do not support the story.
Question Three: Who Will Manage It, and What Will That Cost?
Remote ownership of a short term rental in another country requires a manager. The only real question is which one and on what terms.
Understand the commission structure and what it covers. Some agreements include marketing, guest communication, cleaning coordination, and maintenance oversight. Others charge separately for items you assumed were included. Ask specifically about the maintenance approval threshold, meaning the dollar amount a manager can spend without contacting you, and how emergencies are handled when you are unreachable.
A manager who lists only on one platform limits your exposure. One with direct booking capability and relationships with returning guests produces materially better results over time.
The strongest indicator is talking to owners the manager currently works with. Request two or three references and actually call them.
Question Four: What Does the Property Need Before It Can Earn?
Furnishing a property to a standard that commands premium rates is a significant expense, and buyers routinely underestimate it. A four bedroom residence needs beds, linens, full kitchen equipment, outdoor furniture, electronics, and the small items that guests notice by their absence. Costa Rican import duties raise the cost of bringing goods in, and local availability for some categories is limited.
Beyond furnishing, budget for professional photography, listing setup, and any deferred maintenance the inspection reveals. If the air conditioning is aging or the pool equipment is near the end of its life, those costs will land in your first year rather than your fifth.
Build a realistic figure for all of it and add it to your acquisition cost before you calculate return. A property that pencils at the purchase price may not pencil once it is genuinely ready to receive guests.
Question Five: How Will This Be Taxed, and Under What Structure?
Costa Rica taxes short term rental income, and the obligations are enforced more actively now than they were a decade ago.
Short term rental revenue falls under VAT, requiring registration and periodic filing. Rental income is also subject to income tax, with the treatment depending on how the property is held and how the activity is classified. Most foreign owners hold Costa Rican property through a corporation, which carries its own annual obligations including corporate tax and legal representation requirements.
Buyers from the United States have a second layer to consider, since worldwide income is reportable regardless of where it is earned, and foreign accounts and entities may trigger additional filing requirements.
Putting the Five Answers Together
A property that clears all five questions is a genuine investment. One that fails on any single question is either a lifestyle purchase you should evaluate on lifestyle terms or a problem you will spend years managing.
The buyers who do best in this market are the ones who treated the process as underwriting rather than shopping. They read the HOA documents, called the references, built the furnishing budget before they made the offer. None of that is glamorous, and all of it shows up in the return.
Frequently Asked Questions: Buying a Rental Property in Costa Rica
What return can I realistically expect from a Costa Rica vacation rental?
Returns vary widely based on location, property size, management quality, and how aggressively the calendar is worked. Well-managed properties in established resort markets like Los Sueños generally perform better than isolated properties, because guest demand is concentrated and rates hold firmer. The honest answer is that any specific percentage quoted without reference to a particular property and its historical data should be treated skeptically. Ask for actual monthly figures from comparable properties in the same building or community rather than accepting a general market estimate.
Can foreigners own and rent out property in Costa Rica?
Yes. Costa Rica grants foreign nationals the same property ownership rights as citizens for titled land, with restrictions applying primarily to maritime zone concession property near the shoreline. Foreigners can own outright, hold property through a Costa Rican corporation, and operate short term rentals, provided they register with the tax authority and comply with VAT and income tax obligations. Ownership carries no residency requirement, and no residency status is needed to purchase or to earn rental income.
How much does it cost to furnish a rental property in Costa Rica?
Costs depend on property size and the standard you are targeting, and buyers consistently underestimate the figure. Import duties on furniture, appliances, and electronics raise prices above what the same items cost in North America, and some categories have limited local availability. A full furnishing package for a multi-bedroom luxury residence represents a meaningful percentage of the purchase price. Get a detailed quote from a local supplier or furnishing service during your due diligence period so the number is in your model before you commit.
Should I buy a property that is already operating as a rental?
Often yes, if the numbers hold up under scrutiny. A property with an established rental history gives you verifiable income data, existing furnishings, a review record, and sometimes forward bookings that transfer with the sale. The trade-off is that you inherit the previous owner’s decisions on furnishing quality and any reputation the listing has accumulated. Review the actual monthly revenue figures and the guest reviews carefully. An operating property with two years of clean data removes most of the guesswork from your underwriting.
How Hardy Real Estate Group Helps Investors Buy Rental Property in Costa Rica
We are unusual in this market because we handle both the transaction and the management afterward. That gives us a view most agencies do not have. We know what the properties we sell actually earn, because in many cases we are the ones operating them.
For buyers evaluating an income property, we can pull comparable performance data from the buildings and communities you are considering, flag the HOA restrictions that would limit your rental strategy, and give you a realistic furnishing and setup budget before you write an offer. We also coordinate the attorneys and accountants who handle the structure and tax questions properly.
If you are looking at Los Sueños or the wider Central Pacific Coast as an investment rather than a second home, let us run the numbers with you before you fall in love with a view.
Contact Hardy Real Estate Group: hardygrouprealestate.com
The gap between a rental property that works and one that disappoints is almost always visible before closing. It sits in the HOA documents, the monthly revenue history, the management agreement, and the furnishing quote that nobody asked for.