What Is the Real Cost of Owning a Vacation Property in Jaco?

Buying a vacation property in Jaco, Costa Rica can offer both a tropical getaway and the opportunity to generate rental income. But the cost of owning a vacation property in Jaco goes well beyond the purchase price.

With more than a decade of experience in Jaco’s vacation rental and hospitality industry, Christopher Kogel, a real estate agent with REMAX Oceanside, has seen firsthand what can make a rental property perform well.

“The return on investment is going to be as good as your property manager.”

He also points out that the property itself matters. Comfortable furnishings, thoughtful design, and good presentation can have a direct impact on the guest experience. Yet ultimately reviews, bookings, and rental performance are very important, too.

What Ongoing Costs Should Jaco Buyers Expect?

Property Taxes and HOA Fees

Costa Rica’s property tax is relatively low, at 0.25% of the property’s registered value. Buyers should still verify the specific tax obligation for the property they are considering.

For condos, HOA fees can be another significant recurring expense. The amount varies by condominium. Some condominiums include water, either fully or up to a specified amount, as part of the HOA fee. Special projects, as voted on by the HOA board, may also be due.

Before buying, review:

• • Monthly HOA fees
  • What the HOA includes
  • HOA rules regarding rentals
  • The financial condition of the association
  • Any planned assessments

How Much Does Property Management Cost in Jaco?

For owners who live outside Costa Rica, Christopher recommends considering professional property management to make owning a rental property easier and more manageable from abroad.

He notes that property-management companies in Jacó commonly charge around 18% to 25% of the nightly rental revenue, depending on the services and arrangement. This can cover things like guest communication, check-ins, cleaning coordination, maintenance, and handling issues that may come up when the owner isn’t nearby.

When estimating your potential rental returns, a great suggestion is keeping these management costs in mind as part of the overall expense of owning and renting the property 

What About Taxes on Rental Income?

If you plan to rent your property on Airbnb, the two main taxes are income tax (renta) and IVA (VAT). Under the tax system, you are allowed to deduct 15% of the gross rental income as expenses without having to prove the expenses. You then pay 15% income tax on the remaining 85%. Or simply: The effective income tax rate is equal to the gross rental income x 12.5%.

For short term rentals, there is a 13% VAT tax that is typically charged to the renter. As the property owner, you will be required to collect the VAT tax and pay to the tax authorities on a monthly basis. 

Since the exact tax treatment can vary, it’s best to confirm your obligations with a qualified Costa Rican tax professional.

How Does Jaco’s Rental Season Affect Your Costs?

Rental demand in Jaco changes throughout the year. September, October, and November are typically some of the slower months, which can also make them a good time to handle maintenance or property improvements.

How well a property performs can depend on several factors, including:

• • Location
  • Amenities and furnishings
  • Guest reviews
  • Pricing
  • Property management

How Should Buyers Calculate Their Potential Return?

When looking at a vacation rental as an investment, Christopher recommends starting with a conservative 50% occupancy rate. Some months may be much stronger, but slower periods can bring down the annual average.

Instead of basing your numbers only on peak-season rates, consider the full picture for a more realistic net return.

What Do Our Experts Recommend?

The true cost of owning a vacation property in Jaco will vary from one property to another. The best approach is to run the numbers conservatively before you buy. Look at the HOA fees, rental history, management costs, seasonal demand, and ongoing expenses, not just what the property could earn during the busiest months. A vacation property can be both a lifestyle purchase and an investment. The key is making sure the numbers still make sense year-round.

Thinking about buying a vacation property in the Central Pacific? 

Contact REMAX Oceanside to discuss the property, rental strategy, and ownership costs before making an offer and to find answers to any questions you may have.