Short Term vs Long-Term Rentals in Costa Rica’s Luxury Market: What Works Best for Luxury Properties?

Imagine this: a 7-bedroom oceanfront villa in Hacienda Pinilla, hosting high-profile guests at $1,800/night, fully booked over the holidays. Now imagine the same villa sitting silent through the rainy season, while another contemporary estate in Valle del Sol in Santa Ana earns $6,000/month, year-round, leased to a diplomatic mission or executive family.

For high-net-worth investors, this isn’t hypothetical—it’s the real choice between short-term vacation rentals (STR) and long-term luxury leasing in Costa Rica’s dynamic real estate landscape.

And while both paths can be profitable, the right decision depends on strategy, location, and your lifestyle goals.

Let’s break it down.

📈 Real Numbers for Real Assets: STR vs. Long-Term Leasing

🏖️ Short-Term Rentals (Airbnb / VRBO)

Let’s say you own a luxury hilltop villa in Los Sueños Resort:

• ADR (Average Daily Rate): $1,000–$1,800 in peak season for 4–6 bedroom homes with ocean views and concierge service.

• Occupancy:

  • 70%+ in high season (Dec–Apr)

  • 30–40% in green season (May–Nov)

• Monthly Income Potential:

  • $30,000–$45,000/month in peak season

  • Drops to $8,000–$12,000/month off-peak without dynamic pricing or promotion.

    
    

🏡 Long-Term Rentals

Now picture a smart home in Valle del Sol, complete with solar panels, pool, and privacy:

• Lease Value: $5,500–$7,500/month for executive-grade homes.

• Occupancy: 95–100% year-round; demand from embassies, multinational companies, and high-net-worth expats.

• Annual Gross Revenue: $66,000–$90,000 — stable, predictable, and maintenance-friendly.

  
  

🌦️ Seasonality & Volatility

• STR Peaks: December–April: luxury villas at Hacienda Pinilla, Santa Teresa, and Nosara are goldmines. Families, weddings, and retreats flood in.

• STR Pitfalls: Come rainy season, bookings plummet unless marketed aggressively. Without property management, many UHNWIs lose momentum and revenue.

• Long-Term Stability: Homes in gated communities like Villa Real or Escazú stay leased to diplomats, remote executives, and foreign retirees. No panic. No pricing drama.

  
  

📑 The Law Has Changed. Are You Compliant?

For luxury STRs, Costa Rica is tightening the reins:

• Must register with the ICT (Tourism Institute)

• Must charge and report 13% VAT

• Platforms like Airbnb will start reporting owner data to the government by 2025

Failure to comply can lead to fines or even platform removal—an expensive oversight if your villa relies on Airbnb bookings.

In contrast, long-term rentals:

• Fall under simpler tax and contract laws

• Offer more leeway for property structuring

• Are ideal for USD contracts (but increases are not allowed mid-term)

  
  

🧠 What Strategy Is Right for You?

Choose STR if:

• Your property is in a top destination (Pinilla, Nosara, Santa Teresa)

• You have professional management for marketing, guest service, and legal compliance

• You want to maximize ROI and are open to active involvement or partnership

Choose Long-Term if:

• You value predictable income and asset preservation

• Your property is in a prime urban/suburban location (Escazú, Lindora, Santa Ana)

• You don’t want to deal with weekly turnover, guest issues, and seasonal risk

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🛠️ Insider Strategy: The Hybrid Model

Some of our clients use a hybrid structure, like this:

“My oceanfront estate in Tamarindo is Airbnb’d during peak months (Dec–April), and then leased for 4–5 months to a retreat brand or executive relocating family during green season.”

This hybrid approach balances high season earnings with low season security—but only works with smart planning and a strong operations partner.

🔑 Let’s Make Your Property Work for You

Whether you already own or are scouting your next investment, the strategy behind your luxury real estate matters more than ever.

📲 Let’s have that conversation.We’ll review your property or investment goals and suggest a tailored management model that’s built to perform—and to protect.

👉 Contact us at admin@ecmanagementcr.com

🌍 Or explore www.ecmanagementcr.com

Costa Rica is full of paradise properties. Let us help you make yours a powerhouse!