THE 5 MOST COSTLY MISTAKES FOREIGNERS MAKE WHEN BUYING PROPERTY IN COSTA RICA

The guide every buyer and investor should read before investing in Costa Rica

By Josué Alejandro Rojas

Palm Beach Costa Rica Real Estate

INTRODUCTION

If you’re thinking about buying property in Costa Rica, let me start with something very important:

Costa Rica can become one of the best investments of your life.

But it can also become one of your most costly financial mistakes if you don’t conduct proper research before purchasing.

For years I’ve worked in the Guanacaste real estate market, helping domestic and international buyers acquire properties in Sámara, Carrillo, Nosara, Punta Islita, Camaronal, and other Pacific coast areas. I’ve seen buyers make extraordinary investments, and I’ve seen others lose thousands of dollars from mistakes that could have been easily avoided.

The difference between these two groups wasn’t luck.

The difference was information.

That is why I decided to write this guide.

My goal is not to sell you a property.

My goal is to help you understand how the real estate purchase process really works in Costa Rica so you can make better decisions and protect your investment.

MY PERSONAL RECOMMENDATION

Before discussing the most common mistakes, I want to share a recommendation based on my personal experience.

My recommendation is to work with a local or national real estate agent who deeply understands Costa Rica’s procedures, regulations, and processes.

Why?

Because buying property in Costa Rica goes far beyond finding a pretty house or a lot with a view.

A professional with local experience typically knows:

How to request a land-use permit.
How to interpret land use.
How to request a water availability letter.
How to coordinate with ASADA.
How to review a title search (registral study).
How to interpret liens and mortgages.
How to verify legal access.
How to review easements.
How to coordinate with surveyors.
How to coordinate with engineers.
How to coordinate with architects.
How to obtain certifications of existing services.
How to calculate real construction costs.
How to estimate earthworks.
How to manage municipal procedures.

All that information can make the difference between an excellent investment or a costly problem.

Now, let’s talk about the most common mistakes.

ERROR NUMBER 1

BUYING A PROPERTY WITHOUT PERFORMING A FULL DUE DILIGENCE

This is the most expensive mistake I see every year.

Many people find a property they like.

They fall in love with the view.

They imagine themselves living there.

They visualize their ideal home.

And before researching, they’re ready to hand over money.

That’s extremely dangerous.

Due diligence is the set of essential verifications conducted before buying. Without it, it’s easy to fall in love with a property for its view or its idealization and then discover legal or technical problems that complicate or prevent the purchase. In a due diligence, the title status, surveyed plan, encumbrances, mortgages, easements, land use, water availability letter, and other key aspects are reviewed. The title search, obtained from the National Registry, reveals who the real owner is, the lot number, registered area, encumbrances, mortgages, limitations, annotations, and legal matters affecting the property. Comparing physical reality with official documents is crucial to avoid discrepancies between what is seen and what actually exists. Encumbrances and mortgages can limit sale or require outstanding payments; understanding their scope is essential to decide whether the investment is viable. It’s also vital to verify legal access and municipal restrictions that could hinder construction or changes in use. A technical inspection of plans and measurements helps prevent incorrect dimensions or boundary disputes.

Due diligence does not guarantee perfection, but it significantly reduces the risk of financial losses and legal complications. Finally, carrying out this process with an experienced real estate professional can transform a good offer into a safe and sustainable purchase.

ERROR NUMBER 2

BUYING WITHOUT VERIFYING WATER AVAILABILITY

Water availability is a critical determinant for any project, especially in Costa Rica where the viability of a development depends on stable water services. Many buyers assume that if neighbors have water, their property will too, but that assumption isn’t always true due to capacity or rights differences. A water availability letter, issued by ASADA or AyA, confirms whether there is capacity to supply water to the property in question. This document is especially important for projects, developments, or lots intended for dense residential use. Without a water availability letter, even construction permits can be delayed or blocked, generating unexpected costs. It’s common to need to confirm not only the existence of water but also pressure, flow, and continuity of supply. Additionally, it’s important to understand any temporary restrictions or service rates. Verifying this aspect before investing avoids surprises and potential evictions or project stoppages. In short, water availability is a regulatory and operational requirement: don’t buy without confirming it.

ERROR NUMBER 3

BUYING WITHOUT CHECKING THE LAND USE

One of the most frequent mistakes in Costa Rica is assuming you can build anything on any property. That approach simply doesn’t work.

The land-use document, issued by the municipality, determines what activities are permitted on a property and under what conditions. Land use can define residential, commercial, or tourist use, density, maximum height, and construction constraints. Without reviewing land use, a project such as a hotel, condo, or theme park could be completely prohibited or subject to limitations that make plans unviable. Moreover, land use can affect future valuation and return on investment, since rules can change over time. It’s essential to understand if there are environmental mitigation requirements, reserves for conservation areas, or rights-of-way that reduce buildable area. The consultation should be done before committing funds and, preferably, with support from a professional who can interpret special cases or development zones. In short, verifying land use avoids investments that look attractive but are impossible to execute under applicable regulations.

ERROR NUMBER 4

NOT UNDERSTANDING EASEMENTS, LEGAL ACCESS, AND SETBACKS

This is a highly important issue and, unfortunately, many people discover it too late.

An easement is a legal right of passage or use over another property. It can grant access to other parcels, allow passage of pipes, allow electrical access, or restrict certain construction areas. Each easement must be carefully analyzed.

Setbacks (retíros de construcción) are the minimum distances that must be respected from streets, streams, rivers, springs, and power lines. These setbacks can significantly reduce usable land area and may require redesigns or demolitions if not observed. It’s essential to identify and understand each existing easement, its scope, duration, and usage conditions. It’s also important to review legal access and the permits needed to guarantee that you can traverse, enter, or build without infractions. Setbacks affect the possibility of building along a street edge or near natural features, and they can vary according to municipal regulations and the type of development. A detailed analysis prevents surprises, such as an easement of passage blocking construction in a specific band. In short, understanding these concepts protects the investment from conflicts and unexpected regulatory costs.

ERROR NUMBER 5

WORKING WITH PEOPLE WHO DO NOT KNOW THE LOCAL MARKET

This is probably one of the most underestimated mistakes.

Many buyers believe a real estate agent’s job is only to show properties. The reality is very different. A professional with local experience can help you identify risks that are not visible to foreign buyers.

A local expert can assist with:

Reviewing documentation.
Coordinating inspections.
Analyzing developments.
Obtaining municipal information.
Understanding local regulations.
Coordinating topographic studies.
Coordinating permits.
Obtaining construction quotes.
Analyzing future appreciation.

The goal is not nationality; it’s the depth of local knowledge. That knowledge can save thousands of dollars.

Therefore, it’s advisable to verify the experience, references, and past results of the professional you choose before moving forward with any negotiation or significant payment.

If you’d like, I can tailor each paragraph to a more technical tone, format it for social media, or condense it into a one-page version. I can also include practical examples or verification questions for each mistake. How would you like this presented?. I can also include practical examples or verification questions for each mistake. How would you like this presented?