Building a House in Costa Rica: Understanding the Basics

With its warm weather, beautiful landscapes, and welcoming locals, Costa Rica is a desirable location for those moving or retiring abroad. For many people, building a house in Costa Rica is a top priority. A customized home gives you certain comforts, which you may not be able to find in a prebuilt house. Or maybe you are looking to invest and create a dreamy rental property that will bring in extra income in the future. 

But where do you start when building a house in a foreign country like Costa Rica? What hurdles are there and how is the process different from what you may be used to? To get some answers, we sat down with an experienced contractor and longtime acquaintance. In this post, we’ll share his insights into building a house in Costa Rica.

Building House Costa Rica

Background – Building a House in Costa Rica

We have lived in Costa Rica for over seven years and have either done house sitting or rented the entire time. Over the years, we’ve lived in many different style homes and can see why someone would want to build their own custom house. Whether it is an odd layout, poor material choices, a lack of closets or natural light, or bad airflow, many buildings have at least some flaws.

We haven’t built our own home yet, but we did gain some useful experience when we oversaw the construction of an addition for a house we were living in.  

To find out more about the entire process of building a house in Costa Rica, we sat down with the contractor on that project, Carlos Morales.

Carlos is the owner of Five Star Construction near Dominical on the southern Pacific coast. We met him in 2013 during our first house sit. He had helped build the house we were staying in and came to do an emergency repair. Over the years, we kept in touch and he ended up doing several large-scale construction jobs on a property that we were taking care of.  

Carlos often works with expats to build or remodel homes in the Dominical, Platanillo, Matapalo, Uvita, and Ojochal areas. He also worked for several years doing construction in the United States. So, he has an idea of what expats have to adapt to when choosing to build in Costa Rica.

According to Carlos, there are two major steps when building a home in Costa Rica. The first is finding a good lot. The second is proceeding with the plans and construction work. We’ll cover some details on both below. 

Finding a Suitable Lot to Build

This step could almost be its own post because there are so many variables, but Carlos gave us some good, simple advice.

Find a good, honest real-estate person and hire good lawyer.”

Carlos stresses the need to find honest people because, like everywhere in the world, there is a lot of money to be made on real estate. You definitely want someone who will guide you in the right direction and keep your best interests in mind. His advice is to ask for several referrals and talk with past clients. Make sure the customers were happy with the outcome. 

Things to Look for in a Property

A good real-estate agent should know a lot about the property you are looking at and whether it is suitable to build on.

Here are the basic things to check for before you get too far into the buying process. Construction can be held up for weeks, months, or even indefinitely if one of these elements is missing or needs further investigation.

Water Source

This can be from a town source like the AyA or ASADA (public water companies/associations in Costa Rica), or by concession (legal access to a spring).

In the case of a concession, Carlos mentioned that it is important that the property title mentions access to the water and specifies how many houses it can supply. For example, sometimes a spring is rated for only three homes, but the developer is selling five lots.

Electricity

The most common source for electric power in Costa Rica is ICE (the government-owned electric company).

You should make sure that the electrical wires pass very close to the property. Extending service to a new area can be quite expensive and time consuming.

Solar power is another possibility with so much sun in Costa Rica, but a big investment up front.

Internet

Everyone needs Internet these days. Many areas have wired, cable Internet now. Some even have fiber optic. But if the property is far from a main road or in a rural area, Internet access may have to be through a cell-phone tower or satellite. It is best to find out what neighbors are using and what works best in the particular area you’re looking at.  

Road Service

Access to the property is a must, especially if other properties sit between the one you are looking at and the main road. Make sure there is a legal right of way for you to access the land.

Property Limits

Make sure that the property boundaries are detailed on a stamped plan and registered with the municipality. These plans may include setbacks from roads, rivers, or protected areas that you should know about. Then make sure they are correct by hiring a surveyor/engineer.  

Zoned Use

This may seem obvious, but it is important to make sure that the lot you are buying can be used for the purposes you want. Check with the municipality to see if it is zoned for a residential building. If not, find out what the process is to get approval.

Be careful around coastal properties as there is a 200-meter setback in Costa Rica that usually prevents new construction.

Clear Title

One of the most important things to make sure of is a clear title. Ensure that the person selling has paid all taxes and there are no disputes or liens.

Importance of Attorney and Contractor/Architect

While a real-estate professional should be able to give you a basic idea of the above list, Carlos says that it is important to hire an attorney early in the process. They will ensure that everything is official in the government system and identify any potential issues early on.

Carlos also mentioned that before getting too far in the process, it can be beneficial to bring in a contractor or architect to assess the site as well. This way, they can look at the property for things like water-runoff issues, flooding potential, slope stability, future machine access needed for building, etc.

Cement Mixer stuck on a hill in Costa Rica
This cement mixer couldn’t make it up the hill to a jobsite. It blocked the road for two days! 

Purchasing the Property

A lawyer is essential for this step. Not only will they be needed to take care of many of the purchasing requirements, but they also will be looking out for you, as your legal representative. Always get your own lawyer and don’t rely on the seller’s lawyer.

Once you have decided on a property, the lawyer will help you draft an offer that’s in your best interest. They also will help review the final purchase agreement and do due diligence to make sure that the property meets the requirements above (title research, zoning, survey, free from liens, etc.).

The lawyer can further guide you on creating a corporation for the property (if desired), and help you open local bank accounts so that you can transfer the purchase money and pay for utilities, permits, and taxes. They also will help with the required paperwork involved in sending a large sum of money into Costa Rica.

The Building Process

Once you own the land, the fun part of designing and building your home begins. The first step is to assemble your team. You will need both a contractor and an architect/engineer. Real-estate professionals may have recommendations, but it’s important to do research on several different options and go with the ones you feel the most comfortable with.

It’s also important to note that many contractors have certain architects they work with often, and vice-versa. So if you find a contractor that you like, they may be able to introduce you to a reputable architect/engineer.

The role of the architect is to make the design and blueprints. They are also responsible for the project as a whole and will come to the jobsite weekly and/or during important phases of construction to make sure things are being built as specified.

Engineers also can do this but typically don’t do as much design work. An architect, on the other hand, is an engineer but with the next level of degree/license.

Design Phase

In the design phase, Carlos says that it is very common for clients to have their own design in mind or at least some ideas for what they like. They then sit down with the contractor or architect (or both) to discuss the options as a whole.

“This is where it is important that you hire the right people, because you will likely talk about the budget for the entire project and what is realistic.”

Carlos went on to say that when checking references, previous clients should say that the contractor “offered this and did exactly what he offered.”

If past customers think that shortcuts were made, it’s a big red flag!

Along with the layout of the home, the design phase also will specify the general building materials (block, stucco, wood, steel, etc.) and costs per square meter.

Once the budget, general materials, and design ideas are shared, the design process will go through a series of steps:

1) 3D-Mock Up

The architect will take the design ideas and work up a 3D proposal to show you.

“The nice thing about this process,” says Carlos, “is that it can be done online with the client thousands of miles away.”

The 3D model will give you a very good idea of how the home will look when finished.

2) Blueprints

With the 3D model edited and approved, it is now time to prepare the blueprints.

To do this, the client and contractor must specify the finish materials. According to Carlos, it is in everyone’s best interest to put as many details on the blueprints as possible. For example, floors will be concrete with porcelain tile on top. The bathroom shower will have high quality porcelain tiles that go from floor level, up two meters. The shower doors will be glass, going up 2.5 meters. And things like that. The contractor will be there to guide the client on typical costs.

Once the blueprints are complete, they will be sent to the College of Engineers in San Jose for approval. Once approved, a small percent of changes is okay, but no major changes, especially structural.

With the stamped blueprints, you can apply for the building permit with your municipality.

3) Proposal & Contract

With blueprints in hand, now the contractor can give you the final price to build. The contractor will work with the original budget and blueprints to specify the materials and labor costs on a proposal.

Carlos says that like the blueprints, “The proposal and contract should be very detailed so that there are no major questions later from either side.” And that, “it should include everything you want and everything that was agreed on in the design.”

While some changes to the contract later on are fine, having it all in writing from the start will protect both the client and the contractor. For example, the contractor might specify that he is planning to spend $25/sq. meter on tile. That price should allow him to purchase a high quality tile that you pick out, but if for some reason, you find one at a higher price that you like better, you can pay separately for the upgrade.   

Build Phase

After the contract is signed and a deposit is made, it’s time to build!

This will be the fun part, as you will get to see each step of the process and eventually the final product. Be prepared, though, as the building process can be notoriously lengthy in Costa Rica. A custom home may take 7-12 months from start to finish, or even longer, depending on the size and complexity.

Carlos warns that if a contractor says that the house will be done in six months, plan for a few extra months just in case. There can be weather delays, especially in rainy season (May to November), permits pending, materials backordered, and other factors that hold up the work.

Additionally, unlike in North America, where we are from and Carlos worked for a while, subcontractors are not that common. In other words, a crew of workers in Costa Rica may do everything from start to finish, including things like foundation work, electrical, plumbing, roofing, tile, and painting. This limits the amount of work that happens simultaneously, but on the other hand, ensures control over the project every step of the way.

Construction begins on a property in Costa Rica

Conclusion

Building a house abroad in a country like Costa Rica can seem daunting at first, but we hope this post gets you started. With the right team of people and a little patience, your dreams can become a reality.

Special thanks to Carlos Morales for his help with this article. If you are looking for an honest builder in the Southern Pacific area, please look him up at Five Star Construction. Oh, and tell him that Matt & Jenn sent you!

Have you built a home in Costa Rica or are planning to build soon? Leave us a comment below.

Want more information about moving and living in Costa Rica? Check out these articles:

Buying a Car in Costa Rica: Need a car for when you get to Costa Rica? This post shares our three car-buying experiences, through a direct consumer sale, from a rental car company, and a new car from a dealership.

FAQs About Moving to Costa Rica: Learn the basics about getting residency in Costa Rica, visas, cost of living, and how to get your stuff here.

Starting a Business in Costa Rica: If you’re thinking about starting a business, this post will give you a good idea of the process and important things to keep in mind.

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40 Comments

  1. Hello,
    I just wanted to share my experience with Carlos Morales as a contractor. We first met Carlos in 2016, when we embarked on remodeling our Costa Rican home. At the time he was working for a local company as the head of the construction project, and as the job progressed, we realized his management of the team and the work being done was great.
    So, when we decided to build a spec home on the lot next to our home, and heard Carlos had started him own company, we knew we wanted him in charge, especially as we’ve heard from many ex-pats of disappointing experiences with contractors, Tico and ex-pats both.
    Carlos learned construction during the 7 years he spent in the US and we know his attention to detail, knowledge of construction material options, and communication skills are excellent, and we highly recommend him to anyone who asks about a good contractor.

    The new home out beautifully

      1. Hello, I want to build in La Ribera de Belen. We have land but are looking for recommended architects and engineer any recommendations? Thanks!

          1. Hi,
            I have a piece of property, architect, everyone ready to go to build.
            But… Is it worth it? We would visit once a year and then rent to friends, digital nomads, etc. Sell later.
            It will be 400k by the time I am done. I am looking at it as an investment… But it is still alot of money.
            Would appreciate your two cents. ;+)

          2. Hi Anne, That’s a big investment. It really depends on where the property is and the market in that area as it varies. You’d be wise to talk to a local real estate agent (or two) in the exact area you’re building to get an informed opinion. Good luck!

      2. Hi John, I will be going through process soon and I will need some assistance from somebody like Carlos. Would it be possible for you to refer me to him?

    1. Hey John, We have lived in Oklahoma our whole life but we are considering the move to Costa Rica
      Is there a ballpark number on Cost per Sq ft that you spent or a number you know is common?

  2. Thank you for your article “Building A House In Costa Rica: Understanding The Basics.” Our family is thinking about building a house in Costa Rica, and the information was very helpful. It looks like the telephone number for Five Star construction is incorrect on their web site. Appreciative if you provide the correct number.

    Thanks,

    Bibi Betancourt

    1. Hi Bibi, We double checked the number (506-8347-3990), and it is correct. It’s the one we have used in the past. Maybe check to make sure you are adding the country code (506) correctly. If you are calling from Costa Rica, you also need to add the international prefix or exit code, depending on your country of origin. For example, from the US, you would need to add 011, so the number would be 011-506-8347-3990.

  3. Your articles are all excellent, thank you very much!!! I am looking to build in Puntarenas and I’m Limon, likely Manzanillo. Any resources you could point my way would be great. Thank you, and I’ll keep recommending your newsletter to others!

    1. Hi Cj, Glad our articles have been helpful! Sorry, but we don’t have any contacts for builders in Puntarenas or Puerto Viejo. We would recommend joining some of the Facebook groups for locals in those areas and asking for recommendations on there. Best of luck!

    2. Recommend you contact Israel Ayraya Sanchez at 506 8926 0641. Honest person who runs his own crew of skilled workers and uses quality materials. Lives in Esterillos Oeste. Israel speaks fluent English and did a wonderful job building our home.

  4. Hi. Thanks for the great article. I lived in Costa Rica from 1991-1993 and have visited about a dozen times, so I’m familiar with the country and I love it. My wife and I are looking at property in the Arenal area. Do you have any realtor and/or builder recommendations for that area? Gracias!

    1. Hi Mason, You’re welcome! Unfortunately, we don’t have any contacts for real estate agents or builders in the Arenal area. If you’re on Facebook, we’d recommend joining some of the locals’ groups in that area to get recommendations. Best of luck with you and your wife’s plans!

  5. Thank you for your thorough article. I am just about to begin a project in the Platanillo area and I am so thankful to find your information on Carlos, the building process in CR, and the glowing referral. It is a daunting task to do this project, and I feel blessed to have a better direction and list of points to follow.

    Sincerely,
    Krista

  6. Hi Jenn and Matt, We just purchased property in Nosara and are in the topographical phase of the project. We live in the US and were wondering if you could recommend a specific time in the building process that we may want to be onsite for.

    1. Hi Carol, How exciting about your land purchase! We would recommend having a contractor you really trust or even hiring an independent consultant to visit the property for you and give you weekly updates. There are people here who do that since many foreigners build while out of the country. There are a lot of things that can go wrong, so in our experience with construction here, it’s better to over supervise. Hope the project goes well!

  7. Good afternoon. Thanks for your article on building a house in Costa Rica. I’m building a home on the Caribbean side of C.R and I’ve been wondering if we have done everything properly. Well after reading your article, I pleased to say my builder has followed what you recommended pretty closely. Although we’re in the United States we’re able to see the blueprints and see the 3D model. The one area that’s been a little nervous for us is wiring money to the builder in C.R. We’ve had to do it a certain way to avoid losing our money. Well so far so good. Again thanks for the information.

  8. Hi there. We are in the very very beginning stages. We wondered what your thoughts were on the best part of the country to build a home.

  9. Hello thank you for the great info. We plan to build or Buy (if the right property is there )in Puerto Viejo. We love that area. Our goal is not for another few years. Planning for 2023 Just doing research and of course visiting for our Holiday in February. Thanks From Canada

  10. Awesome publication. Thanks Jenn and Matt! I am also looking to build in the Puerto Viejo/Southern Caribbean side of the country and was just starting my planning so this hit right on target!

  11. Thanks for the info Matt and Jen,

    Im building a house in La Fortuna, assembling a team to get this done. I rented here for two years now, and I highly recommend not building a house here remotely. Or buying in a place you have not lived.

    Ive entrenched myself in this community, fixed local paly grounds, worked on monkey bridges for wildlife corridors, shared plenty of good will around town and now I get the best advice from locals who know.

    Go to the big farms in your area, find out who owns them, meet and establish a relationship with the most powerful and large land owners in your area. In time, they will recommend who they use for their big projects.. the contractor is much more likely to do you right if he thinks he may upset one of these large local land owners if he doesnt.

    I am told, pay as you go, monthly, weekly, not large sums up front.

    As indicated here in this article, here in Alajuela, water rights are a big deal, and you have to be within 60 meters of a public road (usually has electricity) to build on it.. I believe its 40 meters from any river, and but there are ways around everything here. People can pay off the right people to get these stamps on their deeds and there are hundreds of houses that are obviously not built to ‘code’ here.

    However, Im not a fan of back room deals,so we are doing everything by the letter to avoid any problems in the future.

    I am also told if the house is small enough you dont need a plan or approval.. but I have yet to verify this information.

    Im now about to buy the property I will build on. feel free to shoot me an email if you want to see how my project goes over the next year or so.

    1. Good Morning Tony

      How is your build progressing? I would be interesting in seeing pictures of your build if you would share? Its been over a year do you have any must do’s or wouldn’t do that again advise?

      We will be spending 4 months in Costa Rica this winter searching for land to build on for investment/winter getaways two homes on the same property (both under 1000sqft). We are looking in the Nosara area.

      With Gratitude

    1. Hi Larry,
      We are planning on building in the Jaco area. Did you find a good contractor that you could recommend?

  12. Hi, great article. I just bought land in Puerto Viejo and need a contractor, and yes had a bit of different experiences that didn’t pan out. So if you can possible lead us in a good direction that would great

  13. We are building in Tamarindo and would love direction to an honest awesome architect and contractor/engineer.

    1. Hi Christina, We don’t have any contacts in the Tamarindo area for building. If you’re on Facebook, you could try joining the group called Guanacaste Women’s Beach Society. It’s an excellent group for people who live in that area.

  14. Hi Jenn and Matt,

    Thank you for the information. I own a lot in the Portalon area and want to build a house there. What type of construction would you recommend? I see a lot of steel frame structures which I am not familiar with. Is this because of seismic code? Is this more cost effective? I would like to learn more in general about building a house.

    1. Hi Jose,
      Most of the homes we see being build are concrete and concrete block with rebar. Then they use the metal beams for the roof structure, probably because of insects and weather. We have an older home which was built like this but they used wood for the roof structure. The wood has held up over the years but has some termite damage. We aren’t experts and an architect will probably be able to help you with a lot of the building material options. You will need one to help you get the permits and such anyway, so it might be a good idea to start talking to one now.

  15. Hi Jenn and Matt, Thank you for your blog. Do you know anyone who bought land under their personal name instead of a corporation?
    I would love to learn more about their experience and whether they recommend this rout.
    Specifically, I am interested whether there are any complications obtaining utilities meters during construction process when the land title is under personal name of a foreigner. Thank you in advance for any information.

    1. Hi Elena, It would be best to talk to a lawyer in Costa Rica, but yes, people definitely do purchase real estate in their own name rather than a corporation. It’s more expensive now to have a corporation due to annual filing requirements so many people stopped using them. You do need to figure out utilities, but it is possible to get a local bank account using only a passport/without residency.

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