For many foreigners, Costa Rica represents a dream: tropical beaches, lush rainforests, friendly people, political stability, and a slower, more relaxed lifestyle. These qualities have attracted thousands of buyers from North America and Europe who hope to invest in land, build a home, or retire in paradise. However, beneath this appealing surface lies a reality that many buyers only discover after they have already invested their money.Buying real estate in Costa Rica can be complicated, risky, and very different from purchasing property in the United States or Canada. This article explores the real problems with buying real estate in Costa Rica, using firsthand experience and a testimonial that highlights the most common—and costly—mistakes.
A Real-Life Testimonial: Lessons Learned the Hard Way
The following testimonial from Jean McKnight perfectly illustrates many of the challenges foreign buyers face:
“I wouldn’t recommend buying property in Costa Rica unless it is already developed and has infrastructure. I bought pieces of property in different places in 2006. The developer abandoned both properties. One of the properties was taken over by a Mafiosa guy who burned down the caretaker’s house and locked up the access road. The other piece of property is trying to be developed by an owner’s group, but the government is dragging their feet with a well drilling permit. Apparently, a neighboring property has waited five years so far. Real estate in Costa Rica and all the associated legal business is a cottage industry. There is no incentive to resolve ownership or development issues. You just keep paying the taxes and attorney’s fees until you decide to give up, and they sell the property again to some other fool.”
Unfortunately, this story is not unique. Similar situations occur regularly, especially when foreign buyers purchase raw land, undeveloped property, or speculative investments.
The Biggest Red Flag: Buying Raw or Undeveloped Land
One of the most common—and dangerous—mistakes buyers make is purchasing raw land that has not yet been developed.
On paper, raw land looks appealing:
- Lower purchase price
- Big promises of future development
- Beautiful views and “potential”
In reality, raw land in Costa Rica comes with serious risks:
- No guaranteed access roads
- No water availability
- No electricity
- No building permits
- Environmental restrictions
- Endless bureaucracy
As Jean McKnight discovered, even if multiple owners band together to develop land, government permits can take years—or never arrive at all. A simple well-drilling permit may be delayed five years or more, effectively making the land unusable.
👉 Rule of thumb: If the land is not already developed with legal access, water, and electricity—walk away.
Absentee Ownership: A Major Problem
I have written several posts related to buying real estate in Costa Rica, and the single most important issue I emphasize is absentee ownership.
If you do not live on your property full time, you are vulnerable.
Even if your property is “managed by someone,” that does not replace **