JOHN DOE | AUGUST 22, 2014
It has been some time since I reported on my experience with buying property in Costa Rica and living there, and I thought it would be useful to give an update.
My wife and I are not yet at the point of retiring fully, but are rapidly approaching that time. Our purchase of property in Costa Rica was a preliminary step in that direction. Since we do not use our property ourselves all that much, our plan was to rent it as a vacation rental, to recover some (or if possible, all) of the costs and our home is located in an area that GoDutch Realty or their affiliates don’t service.
Things started out quite slowly, and it took some time to get registered on rental sites (HomeAway and Tripadvisor, currently). I considered using local real estate agents for sourcing potential tenants, but after checking with them, there did not seem to be much interest. I was not surprised, since our experience when we purchased our property was also that they were not helpful (story for another time).
For some time, there were no inquiries, and it was somewhat discouraging. On comparing my advertisement to other vacation rentals in the area, I felt that the fact I had no reviews was a major factor. So I dropped my rental price to rock bottom, despite the fact that our house is in pristine (ie, brand new) condition, and close to a reasonably attractive location, with much tourist interest.
Where can you advertise your Costa Rica vacation rental?
I finally received a query, and pounced on it, offering a very attractive rate for the period, and letting the renter know that my major goal was to have him leave a high rating on the vacation rental website. If anything was not to his liking, I asked him to let me know, and I would do my best to resolve any issue. I contacted my housekeeper in Costa Rica by email (actually her daughter, since my housekeeper does not have email), about the dates, and waited for the arrival date of the renter. I sent off an email the first day of their rental, to ask if everything was in order, and to let me know of any difficulties. All was fine!
After the renter left, I reminded him about the review of the property, and he left a five-star rating!! However, I need to report that in a separate email, he sent me a list of shortcomings about our vacation rental, most of which would have been minor concerns in a 5-star North American hotel, and were certainly quite minor (not worth mentioning?) for a property in Costa Rica, which he rented at a rock-bottom price.
My second renter was an expat who was building a house in the same development, so I gave a very low quote, again on the basis that they would leave a good review for my vacation rental. (Please note that I always let my renters, including these two, know that I expect them to be honest about their comments – to feel free to comment on any negative surprises. I certainly don’t want to mislead any future renter. But I also let them know that I am aiming for high reviews, and ask for the opportunity in advance, to fix any issue that would stand in the way of a 5-star review).
Lots of clients might be looking at Tripadvisor for a Costa Rica vacation rental
So, now I have had 5 or 6 rentals, and all reviews have been 5-star. I am now receiving regular rental requests. Our house is rented for a week or two most months from now until December, and already almost fully booked from mid-December until the end of March. I have kept the rental rates very low, but let all potential renters know that my goal is to retain a very high rating on the rental web sites, and to let me know if anything will stand in the way of this objective. I am close to recovering the full annual cost of the property (including mortgage interest), and plan to very soon raise my rates, which are still well below other properties in the region.
In my next blog, I will provide some tips on what I have learned about making the situation work, and what you can do to become a landlord with a profitable (or at least break-even) vacation rental property.