Selling Hospitality properties in the real estate sector encompasses everything from vacation homes to the development of tourist resorts, as well as the sale of food services and relaxation services. Costa Rica is globally renowned for its unparalleled biodiversity, which enhances the appeal of such businesses. If you’re considering selling a property of this nature, it’s essential to understand the most sought-after categories, market projections, and the corresponding legal processes. Here’s everything you need to know:

Why sell hospitality properties?

Although there can be several reasons, the key is to prioritize them. Each owner may have different situations influencing their decision to sell, and the sale should be developed based on these motives. It’s important to identify both the objective and subjective characteristics of the sale in this preliminary stage.

Objective reasons

These are reasons that justify the owner’s interest in selling. At this stage, the owner analyzes their selling needs and what they expect to achieve by the end of the process. Some reasons might include:

Improving quality of life
Moving residence
Investment purposes
Changing economic activities
Others

The owner’s decisions can be influenced by previous situations involving the property, such as inheritance or a longtime family home. Also considered are investments and expenses incurred for repairs and improvements.

When determining the reason for selling, the goal is to project what the owner expects, including the initial price, the estimated time to put the hospitality property on the market, and what they hope to gain from the sale.

It’s important to contact a real estate advisor who can help analyze the fair market price and understand the profile of potential buyers interested in the property.

To achieve a balanced projection, various factors need to be considered, such as location, availability, mortgage studies, inventories, price per square meter in the area, municipal taxes, and other applicable options. Additionally, factors like existing land use studies, environmental certifications, and other pre-project studies conducted for the property or its location must also be taken into account for the sale. It’s important to note that prices are given in ranges and are estimates (not absolute), as no negotiations have been conducted with any clients at this initial stage.

Subjective Responses

The owner must identify these characteristics to correctly position the property in the market. They are subjective because they aim to establish the “emotional” or subjective landscape of potential buyers so that each response helps in marketing, advertising, and promoting the property within the real estate market within a reasonable timeframe.

Where can I position my property in the market to achieve greater benefits?
Why would a buyer invest in my property?
What distinguishes my property from other options in the market?
What benefits does my property offer to a potential buyer?

It’s crucial to contact a real estate advisory company that can help position your property in the market. Using digital tools and platforms will assist in positioning your property as the best option, expanding its reach, and facilitating a filtering process to study potential interested buyers in advance, thereby streamlining the sales process.

Preliminaries of the sale

Before positioning a hospitality property in the market, it’s essential to have information that determines its real value, capabilities, and sales potential. Having this information before selling will help in identifying the profile of potential interested buyers.

Some preliminary information includes:

Cadastral plan: It represents graphically the area and boundaries of the property, allowing verification of real data and confirming important information such as the presence of easements. This document must be in good condition and legible. If it’s not available or in poor condition, you can inquire about the document here.
Encumbrances and annotations: Encumbrances are burdens on the property that relate to debt repayment. Annotations are provisional and subject to the determination of a real right that is under litigation. This is significant information for all parties involved in the sales process and is obtained through a registry study.
Land Use: It’s highly recommended to have land use certificates as they determine the property’s potential, such as commercial, mixed-use, or residential. Verify with the municipality for the existence of a regulatory plan in the canton where the property is located. Also consider other important variables such as water availability, electricity, other public services, and operating permits from competent authorities.
Construction plans: These provide information about relevant aspects of the constructed property, such as electrical wiring, plumbing, septic tanks, etc.Appraisals: It’s important to keep property appraisals updated as they can lose validity over time due to annual property depreciation.

All the information obtained from these technical instruments helps determine the real value of the property. This is because positioning the property for nationals is not the same as positioning it for foreigners.

Clear communication with the specialized advisor from Nativu Hospitality is essential to avoid future conflicts in the sales process.

Types of Hospitality properties

There are various types of hospitality properties that cater to the needs and preferences of visitors. Some of the most common types of properties in Costa Rica include:

Hotels:

Hotels are the most common type of hospitality service. This sector includes everything from charming boutique hotels to luxurious all-inclusive resorts. In Costa Rica, there is a wide variety of hotel options that cater to all budgets and preferences. This extensive range allows for providing high-quality service to a large percentage of visitors.

Eco-lodges:

Ecolodges are small accommodations located in natural or protected areas, designed to have minimal environmental impact. Given Costa Rica’s rich biodiversity and commitment to sustainability, these lodgings are often situated in stunning environments such as tropical jungles, pristine beaches, or mountainous regions. They are carefully designed to harmoniously integrate with their surroundings, offering visitors a unique experience in tune with nature.

Finca:

The term “finca” is very Costa Rican, although it is also used in other Central American countries. In Costa Rica, it is applied in a particular way: a finca is a property used for both recreational purposes and productive operations. It combines the features of a recreational estate with agricultural production or other economic activities.

Vacation homes:

The demand for this type of property has increased with the growing popularity of vacation rental tourism. Costa Rica offers a wide variety of private homes and villas available for short-term rental, especially in coastal areas and natural settings.

Bed and Breakfast (B&B):

Bed and Breakfasts (B&Bs) are small, cozy establishments that offer accommodation with breakfast included. Typically, these are located in rural settings or near natural attractions.

Glamping:

Glamping, or luxury camping, is a type of hospitality that has rapidly gained popularity. This is because more and more spaces are appearing with unique offerings. Glamping properties provide a camping experience with modern comforts, such as luxury tents or cabins, situated in natural environments.

Posadas or Hostels:

Posadas are a budget-friendly option for travelers or those seeking a more social experience. They offer economical accommodation in shared dormitories or private rooms with common areas.

Permits and regulations for selling hospitality properties

In the sale of a hospitality property, the owner has the responsibility to inform the buyer about the following important aspects for property development planning:

Legal and regulatory requirements: Knowledge of laws and regulations related to operating hotels in Costa Rica. This may include labor laws, building codes, safety and health regulations, among others.
Business registration: Must register the business as a legal entity in Costa Rica. This involves choosing an appropriate business structure (e.g., corporation, limited liability company) and following the relevant registration procedures.
Zoning and building permits: If building a new hotel or undertaking major renovations, you may need to obtain building permits and comply with local zoning regulations.
Specific licenses and permits: Maintain current licenses and specific permits required to operate a hotel in Costa Rica. This can include tourism licenses, food and beverage licenses, health permits, among others.
Safety and environmental standards: Comply with applicable safety and environmental regulations. This may include fire safety measures, proper waste management, conservation of natural resources, among others.
Certifications and accreditations: Obtaining relevant certifications and accreditations can enhance the credibility and quality of your hospitality property. For example, sustainability certification or affiliation with recognized hotel associations.
Tax compliance: Ensure compliance with local tax obligations, including income taxes, sales tax, and other taxes applicable to the hotel industry.
Hiring and labor compliance: Compliance with local labor laws is essential when hiring employees for the hotel. This can include issues such as minimum wages, working hours, workplace safety, and social benefits.

Knowing this information before positioning the property in the market will give you an advantage when selling, as interested buyers will have a broader understanding of the potential and capacity of the purchase.

If you have specific questions about where to obtain information or any other topic related to selling your property, feel free to contact our advisors at NATIVU Hospitality.

Contact Nativu Hospitality Advisors