A Nosara Real Estate Buyers Guide to Income Producing Investment Properties and Rental Returns
- June 16, 2013
Here at Nosara Real Estate Report, we understand the needs of the financially savvy real estate investor who is interested in earning returns on a property in Nosara, Costa Rica. There are different options for investments, with ROI rates that can run anywhere from 5% up to 15% per year, depending on how much you want to hustle or how professional your marketing and management efforts may be. We have many fully functional income producing properties, complete with full financial statements and records, as well as rental bookings going forward for guaranteed income! Disclaimer – All investments carry risk and returns can vary from year to year; However, we can help to put you as an investor in the driver seat, as we guide you through the different types of investments and income producing properties in Nosara. To start, here is a quick synopsis of types of income producing property in Nosara, Costa Rica:
1) Single Family Rental House – Plain and simple, the easiest and most commonly sought after investment in Nosara, is the single family rental house. The smart investors are looking almost elusively in the Playa Guiones area, as that is the most requested area for vacationers, but there are a couple of other areas that are up and coming and may provide better value in the long run. A rental house can range in price from $250k up to $1,000,000. If you are interested in buying a rental house as an income producting property, we suggest one that is 2-3 years old, since that means the current owner has had time to build a rental role and you are not starting from scratch. Also, it gives you a chance to request expenses on a property, which will help to gauge your own operating costs going forward. This is the most hassle free, easiest option for an investor – you rent the property out to vacationers, on a short term basis (usually by the week). In general, your operating expenses can be covered with just two weeks of rent, Christmas and New Years week, which command a rental premium that can be up to double the normal rental rates. From there, you can expect between 15-25 weeks per year in vacation rentals – although we do have properties that rent in excess of 30 weeks, with some other tricks and tools to maximize the value of your investment property.
2) Multi Family Rental House – Similar to the single family, but with the added vale of compartmentalizing your rental role. A rental property with 2, 3 or even 4 units, can be rented individually, but also, are great for accomodating large groups of multi families that want the “separation” effect of sleeping quarters, but also want to be all in the same area and spend time as a group. This is a very common request for renters, especially during the holiday weeks. Our single best investment property is a 3 family home, as close to the beach as possible with private access path, that is practically booked full for the next high season! Click here for more info.
3) Long Term Rental – Each day, week, month – it seems like there are more and more full timers coming to Nosara to live and work here. This bodes very well for an investor who is looking to have an investment property with the lowest amount of owner involvement and effort, as well as overhead. With weekly and short term rentals, the owners/investors are paying for the majority of overhead, which includes utilities, management, rental commissions, property management, advertising, marketing, etc. Depending on the property, it may be possible to achieve your highest rental returns by putting the property up for rent on a longer term basis. For long term rentals, the tennants typically pay utilities, electric, since it is up to them what they prefer and how much they use. In a long term rental scenario, owners/investors need not worry about marketing, regular maid service, property management, online advertising costs, etc – The overhead and operating costs will simply be general maintenance on the property. For some investors, long term rental properties may be the right fit for your investment profile, depending on the level of operating capital you are willing to commit, as well as the time and effort factors. We have a handful of high end homes that would make excellent choices as long term rental investments.
4) B&B or Hotel Investments – These are once again becoming one of the hottest sectors of the real estate market in Nosara, Costa Rica. Any B&B that is priced right and is ready to go, is selling fast. Rent your rooms by the night, by the week, or by the year, the sky is the limit when it comes to owning a B&B as an investment property. With the huge demand for long term rentals in Nosara, its possible to find a B&B or Hotel that can be converted into suites or apartments perfect for a long term rental complex.
