When retirees move to Costa Rica they basically have two choices when it comes to living situations. They can rent or buy. On my monthly relocation retirement tours and when I lecture at conferences I always explain the pros and cons of both situations to help potential residents make the most practical and intelligent choice given their particular situation. Let’s face it. Some people are buyers while others are renters. Either way you will have plenty of housing choices in Costa Rica and areas from which to choose.
Advantages of renting
Short-term cost: In the short and even medium term, renting is obviously much cheaper than building or buying. Those other options require you to have either thousands of dollars in liquid assets, or a down payment and good enough credit to take out a mortgage. To rent, you only need a deposit worth one month’s rent and enough resources to keep up with the payments. With a furnished apartment, neither do you have to invest in furniture or anything else that might tie you down before you’re ready to stay.
Flexibility: With a rental property, you can leave any time, the only possible loss being your deposit, depending on the terms of the rental agreement. This is a real advantage when you consider that, for all it’s stability, Costa Rica is still a developing country, and you are not a citizen. Also, unforeseen things can go wrong on short notice – a death in the family, natural disasters, economic problems, a divorce and even political upheaval. If it does, you may want to leave, and the option to pull up stakes at a moment’s notice can provide quite a bit of peace of mind.
Simplicity: Since you’re not investing a large amount of money, renting is much simpler than buying or building. You find a place, sign a contract, and make monthly payments. There is no due diligence, no lawyers, and no messing around with architects, engineers, and the National Registry.
Disadvantages of renting
Furnishings: Usually poor, or at least in bad taste. This can be fixed somewhat with an unfurnished rental, but not completely if things like window frames and kitchen cabinets are taken into account. If your standards for comfort and interior decorating are adjustable, you should have no problem, but it really is difficult to find a nice rental home for a decent price.
Landlords: You will, of course, have to interact regularly with a landlord, which can be tolerable or hell on earth, depending on the landlord. Language barriers provide another layer of problems.
Ownership: You don’t own the property, which limits your use of it. Drilling holes to hang a picture? Ask the landlord. Want a dog? Ask the landlord. Thinking about painting the walls of the second bedroom your favorite shade of fuchsia? Better ask the landlord.
Most important, no investment potential: All that money you pay on rent is gone, paying someone else’s mortgage. If you stay for the long term (rule of thumb is 100 months), by buying you might even make money, as Costa Rican property has steadily risen in value over the last decade. If you buy a property in a good location and in the “path of progress” you are bound to make money on your property. Also, the better the location and the more desirable the area, the easy it will be to get rid of the property if you have an emergency and have to leave the country. You should always have an exit strategy whether you rent or buy. You never know what is going to happen.
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