Three Compelling Reasons to Invest in Costa Rica

Reason # 2 – Enticing Financial Rewards

With a welcoming government and local population, the foreign land investor would next ask, "What financial rewards may be possible from investing in Costa Rica?" There are several enticing financial rewards with both return on investment (ROI) and cost of living (COL) that have attracted foreign investors. Some of these include:

Steady Increase of Real Estate Values – In the last 20 years, Costa Rican real estate has seen steady appreciation. With the number of tourists increasing and zero ownership restrictions, there has been a strong demand for property. Both internationals and locals continue to purchase property across the country. With investors purchasing ag land as portfolio balancers, high long-term rental returns, and a booming vacation rental industry, experts agree that appreciation will continue.

Incredibly Low Property Taxes – The annual property tax in Costa Rica is 0.25% of the assessed value. This is significantly lower than the US or Canada, making a foreign real estate investment even more appealing.

The 1031 Exchange – While the US does tax revenues that a US citizen makes in a foreign country, the good news is the 1031 tax exchange may be available for real estate revenues earned in a foreign country. According to the 1031 code, the US considers any property outside the US to be like-kind with any other similar property outside the US. So, it is possible to 1031 exchange profits from a home in Costa Rica for another home in Costa Rica – or in Ecuador or Panama, for that matter.

Cost of Living – Although dependent on your lifestyle and needs, most people will find Costa Rica an affordable place to live in comparison to the US. Housing, food, services, and medical care are notably less expensive than in North America. On average, the cost of living is 30-55% cheaper than the cost of living in the US.

Reason # 3 – An Inviting Lifestyle

While the openness to investors and the financial potential are both good incentives, many investors also want to enjoy the place they are investing in. So, another important question that arises is, "What lifestyle does it offer?" Costa Rica has no shortage of enchantment, adventure, and fun. It provides amazing weather, warm water temps, and outstanding vistas. The Costa Rican lifestyle is difficult to communicate in a short synopsis. However, the following highlights can whet the appetite.

Natural Beauty – Costa Rica's stunning natural landscapes, including pristine beaches, lush rainforests, and diverse wildlife, make it an appealing destination. With 28 national parks and 25% of the country protected through a national effort to preserve the forests and wildlife, Costa Rica has cemented itself as a tourist destination for generations to come. There's no shortage of beautiful and biologically diverse places to explore.

Adventure Activities – The country is well-known worldwide for outdoor adventure. It is filled with breathtaking ziplines, extreme hikes to large waterfalls, and diverse wildlife viewing. It offers year-round sport fishing in the Pacific Ocean and the Gulf of Mexico and fantastic freshwater fishing along the banks of its rivers. Snorkeling, swimming with sharks, surfing, and scuba diving provide other styles of water adventure. There is also a growing number of motorsports like Razors, jet skis, and 4-wheeler rentals. Nearly everyone visiting Costa Rica looks for some kind of adventure. Rest assured, there are plenty of adventure options in Costa Rica that will keep you busy and wanting more.

High Ranking in Happiness and Sustainability – A recent study by the New Economics Foundation found that Costa Ricans had minimal environmental impact, a longer life expectancy, and overall happiness about life. When they released the Happy Planet Index, it was no surprise to see Costa Rica at the top of the list.

Pura Vida Culture – Pura Vida translates to "pure life" and is often used synonymously with "the happy and simple life." This unofficial motto can sum up the lifestyle of Costa Rica. The phrase often used as a greeting or goodbye encapsulates the laid-back, stress-free life the locals strive for. In a world dominated by fast action, instantaneous responses, and immediate gratification, "pura vida" offers an unparalleled alternative approach to life and invites anyone who comes to Costa Rica to live the same.

It's always critical to conduct your own due diligence when making an investment decision, especially when looking to invest overseas. Understanding local regulations and market trends and working with experienced professionals can help navigate the process successfully. However, with its welcoming nature, steadily increasing market, and adventure-packed yet easygoing lifestyle, it's no wonder that investors are considering Costa Rica.

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