An important step before buying properties in Costa Rica is understanding how you can buy real estate. Here we show you the three most common methods of buying property and we explain in detail the new but equally effective way to buy with cryptocurrencies.

Rent with option to buy

This method for buying properties in Costa Rica allows the tenant to live in a property while paying monthly installments; and after a period of time previously established, preferably through a contract, the tenant has the right to choose to buy the home.

One detail that stands out is that the rental fee is not much higher than that of an ordinary rental contract, however what does change is that there must be a higher initial outlay, since the tenant must pay a premium. This will depend on the sale price and sometimes, the payment of this premium replaces the payment of a deposit. If the tenant leaves the house he will lose that money. In this way, the property owner protects himself and ensures that the tenant has an interest in the purchase.

Among the advantages that can be found with this buying method we can mention:

Advantages for the owner

You have the security of the sale of the house. In case of not selling it, he receives the entire premium agreed previously in the contract.
Tax benefits for the duration of the contract.
He has the property occupied until the time of sale and receives a monthly fee.
You have more security that the tenant will take care of the property, as it could become his future home.

Advantages for the buyer

You have exclusivity in the purchase of the house within the established period.
They can really live and know the house before buying it to see if it really suits their needs.

Buying financed by a bank

This option is ideal for those who are buying properties in Costa Rica but require a bank loan to be able to face it. However, it is not as simple as it sounds, since when acquiring a mortgage loan to buy a house financed by the bank, you must have a high level of responsibility.

The first step to carry out the loan is to choose the entity that best suits your needs. For this, you can request advice from the bank or from a professional trained in mortgage loans.

Once the request has been made at the bank, the financial institution will carry out a credit risk study and its approval will depend on:

Credit history
Applicant age
Checking monthly income
Seniority in current job, among other details

Financed by owner

Although this purchasing method is not very common, it is 100% legal and some sellers and buyers are willing to use it, since financial institutions can make the outlook for the buyer more rigorous. This way of buying real estate must be carried out with a private contract, without a financial intermediary, between the owner and the buyer in which the first finances the second, and the owner allows him to pay the house in installments.

It is important to know that the private contract carries a guarantee, that is to say that if the quotas and details previously agreed in the contract are not met, the property is returned to the seller and the money advanced is returned to the buyer but with certain penalties previously agreed in the contract signed by both parties.

Buy with cryptocurrency

Buying with cryptocurrencies is an issue that has been gaining more relevance, both internationally and nationally, in recent years. While Bitcoin and other most widely used cryptocurrencies remain off the map for many, they are being used more and more and the time will soon come when their utility becomes commonplace and is seen as another traditional payment.

In Costa Rica there is already a record of real estate sales / purchases through cryptocurrencies and it would not be surprising if over time it begins to give more and more. Therefore, it is important that you know the basics of this purchase method and in this way decide which is the best suited to your situation.

How does it work in real estate?

Cryptocurrencies are a decentralized internet-based payment system. In the market there are more than 1,500 digital currencies, each with its price, which depends on supply, demand and speculation. Although they were born as a form of payment, they have also become a way of investing. And one of these new options is to do it in real estate through tokens or certificates backed by real estate assets.

For this type of purchase / sale, blockchain technology is used, this is a database that coexists in several locations and is shared by the community, in which each user has an anonymous address and can track the transaction history. To simplify, we can think of it as the ledger where each of the transactions get recorded.

The most important thing in order to complete a real estate sale agreement through cryptocurrencies, is that both parties, the buyer and the seller, must agree to carry out the transaction with this method.

Risks of buying / selling with cryptocurrencies

Before buying a property using crypto, you should always make sure that the platform issues Real Estate Participation Certificates, which guarantees that the land is yours. So it becomes vital to find out if the platform to be used legally ties the property to the crypto, because in case that is not well stipulated, the property would not be yours.

Also, both parties, the buyer and the seller, take some risk when using these currencies as a payment method, as they can be considered more unstable than common currencies. However, this has not stopped many buyers and sellers around the world, and there are already many sellers who only accept crypto as the sole method of payment for their property. So it is not surprising if this becomes more and more trend in Costa Rica.

Tips for buying real estate with crypto

Make sure the platform you invest in issues Real Estate Participation Certificates that guarantee that the property is yours.
Seek advice from an accountant and a real estate advisor trained in the subject, to explain what your tax obligations would be when carrying out this type of transaction.
No central bank endorses cryptocurrencies.
No investment is foolproof however trending it may be, so you should always make sure to analyze whether this option is right for your situation.
Like any other investment, the subject should be investigated further, before entering and moving your money through cryptocurrencies.

If you have questions about any of these ways of buying real estate, do not hesitate to contact a NATIVU advisor to provide you with important details to consider and simplify the buying process. Click here to return to the Costa Rica property buying guide home page.

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