Hunt for the Next Spain Part II: Costa Rica

Costa Rica made it into my list of top ten destinations in the world to make a property investment in, and is certainly a contender for the country to become as popular and as successful for property investors as Spain is and has been respectively.

Ok, the property isn't the cheapest but there is massive potential for profit. Costa Rica is a gorgeous place -- positively vibrant. It has both a Caribbean and Pacific coastline, which not only gives it fantastic beaches, but also allows visitors and property investors a choice of climate, humid heat or dry heat -- it is cool in the centre.

Lush vegetation, jungles, tropical plant-life, and awe-inspiring volcanoes, as well as sun, sea and surf are all attracting tourists and property investors. On top of its aesthetic benefits Costa Rica is one of the most secure and stable of all the Central American countries. It also has a really good infrastructure.

In fact, the stage is set for Costa Rica to enjoy massive and sustainable growth for the foreseeable future -- in every industry. Costa Rica just signed the CAFTA, Central America Free Trade Agreement, its major export: micro-processors is a growth industry, on top of all other famous South American export goods like Coffee and Cocoa, and that is before we even mention tourism.

Like I said Costa Rica can easily rival Spain, the popular Caribbean resorts already rival Spain, but they are out of most people's price ranges. Costa Rica's emerging state means living costs are low so it provides an excellent low-cost Caribbean holiday. Little wonder that rental yields are very rarely under 12%.

Dominican Republic offers the cheapest Caribbean holiday, and the cheapest property, but for the extra money Costa Rica surpasses because of its infrastructure and stability. Costa Rica also has a very competitive taxation system; the first $2,698 earned from rental is exempt from taxation, after that it is taxed progressively between 10% and 25%. Capital Gains tax is not charged unless it is from a recurring (habitual) transaction, inheritance and gift tax is only 1-2%, and total round-trip transaction costs are a moderate 8.58 - 13.58%.

In short Costa Rica is doing everything right to ensure it sees continued growth, in its export industry in foreign direct investment and GDP growth, making it well worth considering as a destination for an overseas property investment.

Find out more about Off Plan Property and Emerging Property Markets.

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David Redfern is the director of DSR Asset Management Ltd an overseas property investment specialist. David works closely with developers in more than forty countries and oversees the DSR education programme which lectures individuals and organisations on property investment. Advertise Your Private Overseas Property

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