I Crunched the Numbers: Costa Rica's Rental Market is Absolutely Bonkers Right Now

By Sofía Vargas

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Okay, full disclosure: I was wrong.

Three months ago, I told a client to wait on buying in Santa Teresa. "Let the market cool off," I said. "Don't chase the hype."

Well, that property they passed on? It just sold for 18% more than the asking price. And the buyer isn't even planning to live there—they're going to rent it out and probably make 13% annual yields.

So yeah, I was wrong. And I've been doing this for 12 years.

Let me show you what the data is actually telling us about Q1 2026, because honestly? It's kind of wild.

The Numbers That Made Me Spit Out My Coffee

I spent three weeks digging through transaction records, calling every property manager I know (and I know a lot), and basically becoming obsessed with spreadsheets. Here's what I found:

Look, I'm not easily surprised by market data anymore. But a 23% jump in RevPAR? That's not normal. That's "something fundamental is shifting" territory.

What's Actually Driving This (My Honest Take)

Tourism is Back... With Money

Remember 2023 when everyone was worried about "revenge travel" dying off? Yeah, that didn't happen. Costa Rica just had its best Q1 ever for tourism—695,000 visitors, up 28% from last year.

But here's the thing that matters for investors: these aren't backpackers sleeping in hostels. The average visitor is spending $1,847 per trip now (up from $1,623 last year). We're seeing a 34% increase in high-income travelers—people who want Airbnb Luxe, not "cozy shared room."

My theory? Remote work normalized. People realized they can work from a beach villa in Costa Rica just as easily as from their apartment in Austin. Except here, they can surf before their 9am Zoom call.

The Supply Problem Nobody's Talking About

Want to know why rental yields are climbing so fast? Simple math: demand up 31%, new supply down 15%.

Environmental regulations got stricter in 2025 (which, honestly? Good. Have you seen how beautiful this coastline is?). But that means fewer new permits, which means less inventory, which means if you own a decent property, you can basically name your price.

Here's the breakdown that matters: - Tamarindo: 29% more demand, 8% less inventory - Nosara: 35% more bookings, 12% fewer new listings - Santa Teresa: Similar story—everyone wants in

Where I'd Put My Money (If I Had More to Invest)

Tamarindo: The "Boring" Choice That Keeps Winning

I know, I know. Tamarindo isn't "cool" anymore. The Instagram crowd moved on to Santa Teresa. But you know what?

Tamarindo makes money.

• Average daily rate: $340 (up 16.8%)
• Occupancy: 76.4% (highest in our data)
• Rental yield: 12.1%

My client Javier bought a 3-bedroom here in 2021 for $385K. He laughed when I suggested it—"too touristy," he said. That property is worth $520K now and generates $48K in rental income annually. He's not laughing anymore.

For conservative investors: Look at the $400K-$700K range. Boring works.

Nosara: Where the Rich People Are Going

Nosara is officially the premium market now. I'm seeing $425 average daily rates. That's not a typo. Four hundred twenty-five dollars per night.

The wellness crowd has money, and they're willing to spend it. That new resort that opened in late 2025? It's created this halo effect where everything nearby got more valuable overnight.

But here's my hot take: Nosara is getting frothy. Median property value at $650K with "only" 10.8% rental yield? The math is getting tight. I love Nosara, but I'd be careful about entry prices right now.

Santa Teresa: The One I'm Kicking Myself Over

Remember how I said I was wrong? This is where I was most wrong.

Santa Teresa is up 22.4% in daily rates year-over-year. That's insane growth. Properties are delivering 13.7% rental yields—the highest in our analysis.

Why? Because it still feels "authentic." It's got that surf town vibe that Tamarindo lost a decade ago. And now that the roads are actually paved (mostly), it's accessible enough for regular tourists but still feels off-the-beaten-path.

If I were buying today? I'd seriously look here. Yes, it's more volatile. Yes, the infrastructure can be frustrating. But that 13.7% yield compensates for a lot of headaches.

Flamingo: The Dark Horse I Didn't See Coming

Can I be honest? I wrote Flamingo off years ago. It felt... stale. Like a 90s retirement community that never updated.

But something shifted in late 2025. That marina project finally got momentum. New restaurants opened. And suddenly, Flamingo is cool again.

The numbers are wild: - ADR up 31.2% (highest growth in Guanacaste) - Property values up 18.7% - 11.9% rental yields

At a median $320K entry point? This might be the best value play right now. I'm not saying buy blindly—do your due diligence. But don't sleep on Flamingo.

The ROI Reality Check

Let me give you the numbers I actually use when advising clients:

Entry Level ($200K-$350K) - Target: Flamingo, quieter Tamarindo areas - Expected yield: 10.5-13.2% - Appreciation: 8-12% annually - My take: Solid, boring, profitable

Mid-Tier ($350K-$600K) - Target: Central Tamarindo, Nosara edges - Expected yield: 9.8-12.1% - Appreciation: 9-13% annually - My take: The sweet spot for most investors

Premium ($600K+) - Target: Prime Nosara, beachfront anything - Expected yield: 8.5-11.2% - Appreciation: 10-15% annually - My take: You're buying lifestyle as much as returns

What I'd Tell My Best Friend

Look, data is great, but here's what actually matters:

1. Don't try to time the market perfectly. I tried that with my client in Santa Teresa. Missed opportunity.

1. Cash flow is king. Appreciation is nice, but those monthly rental payments pay the bills. Focus on yield first.

1. Visit before you buy. I can't tell you how many people buy based on photos and regret it. Each town has a vibe. Make sure it matches yours.

1. Get a good property manager. This isn't optional. A bad manager will destroy your returns faster than a market downturn.

1. Have a 20% contingency fund. Construction always costs more. Permits always take longer. Plan for it.

The Bottom Line

Is Costa Rica's rental market in a bubble? Maybe a little. But here's the thing: even if prices plateau, the rental demand is real. People actually want to come here, stay in nice places, and pay premium rates.

I've seen markets come and go. Right now? The fundamentals are strong. Tourism is growing. Remote work isn't going away. And there's a finite amount of beautiful coastline.

If you're waiting for the "perfect" time to invest, you'll be waiting forever. The second-best time is probably now.

Sofía Vargas has been helping investors navigate Costa Rica real estate for 12 years. She's made mistakes, learned hard lessons, and built a network that actually gets deals done. Want to talk strategy? Get in touch.