Airbnb vs Long-Term Rental in Costa Rica: The Complete ROI Comparison

The question every Costa Rica property owner faces at some point: should I list on Airbnb or sign a long-term lease? The answer isn’t simple. It depends on your property location, your tolerance for hands-on management, and whether you prioritize maximum income or peace of mind.

We’ve seen owners make both choices work, and we’ve seen both choices go wrong when the property or situation wasn’t right for the model. This guide walks you through the real numbers, the tradeoffs, and the specific situations where each approach makes sense.

Let’s look at the actual numbers.

The Income Comparison

Here’s the reality in Costa Rica’s most popular vacation rental markets. These figures come from current market data on Airbnb and VRBO performance.

Vacation Rental (Short-Term)

Location	Avg. Occupancy	Avg. Daily Rate	Monthly Revenue
Tamarindo	48%	$343	$26,078
Jacó	42%	$311	$26,030
Costa Rica Avg.	39%	$239	~$18,500

Market data source: AirDNA MarketMinder

A well-positioned property in Tamarindo or Jacó can gross $25,000-$30,000 per month during peak season. But that comes with empty periods, and the real question is what lands in your pocket after expenses.

Long-Term Rental

Location	2BR Apartment Avg.	1BR Avg.
Tamarindo	$1,500-$2,400/month	$850-$1,200
Jacó	$1,500-$2,000	$700-$1,000
Potrero area	$1,400-$1,800	$650-$850

Long-term rentals in the Central Pacific coast range from $1,400 to $2,400 per month for a furnished 2-bedroom, depending on proximity to the beach and amenities. The Tamarindo market shows the widest range, with premium locations commanding higher rates.

What Actually Lands in Your Pocket

Gross numbers tell only half the story. Here’s where it gets interesting.

Vacation Rental Costs

Operating a short-term rental in Costa Rica typically eats 40-55% of gross revenue when done professionally:

• Property management: 20-30% of rental income
• Platform fees: 3% (Airbnb, VRBO, Booking.com)
• Cleaning between guests: $50-$100 per turnover
• Utilities: Higher than long-term due to AC, pool, frequent guest changes
• Maintenance and repairs: More frequent wear and tear
• Linen and amenities: Ongoing replacement of towels, toiletries, kitchen supplies
• ** HOA fees**: Often higher for vacation rental properties

Net example for a Tamarindo 2BR condo earning $26,000/month:

• Gross Revenue: $26,000
• Management (25%): $6,500
• Platform fees (3%): $780
• Cleaning (4 turnovers): $320
• Utilities, maintenance, supplies: $2,500
• Net Monthly: ~$15,900

That’s a strong number. But remember: this assumes 48% occupancy. In low season (September-November), occupancy drops to 20-30%, and your net income follows. Many owners budget using a 35-40% average occupancy assumption, which paints a more realistic picture of annual performance.

The 4-6% net returns that investment analyses cite are after all these expenses. A well-managed vacation rental in a prime location can outperform these benchmarks. Properties in secondary locations or those requiring significant renovation may fall below average.

Long-Term Rental Costs

Long-term leases are simpler:

• Property management (if used): 8-12%
• HOA fees: $200-$500/month
• Property taxes: ~0.25% of property value annually
• Minor maintenance: $100-$300/month

Net example for a Tamarindo 2BR earning $2,000/month (mid-range):

• Gross Revenue: $2,000
• Management (10%): $200
• HOA + utilities passed to tenant: $0 (typically tenant pays)
• Maintenance reserve: $150
• Net Monthly: ~$1,650

The Pros and Cons

Vacation Rental (Airbnb/VRBO)

What makes it worth it:

• Higher income potential: $15,000-$20,000 net per month in good markets vs. $1,500-$2,000 for long-term
• Tax advantages: Depreciation and expense deductions
• Personal use: You can stay in your property when you visit
• Appreciation: Vacation rentals in prime locations tend to hold value better

The challenges:

• Seasonality: 4-6 months of strong income, then it drops
• Management intensity: Even with a property manager, things break, guests have issues, and someone needs to respond
• Wear and tear: More people through the door means more repairs
• Regulatory risk: Some municipalities are tightening vacation rental rules
• Empty periods: No booking means zero income

Long-Term Rental

What makes it worth it:

• Predictable income: Same check every month, regardless of season
• Less hands-on: Tenants handle day-to-day minor issues
• Slower wear: One family vs. dozens of guest groups per year
• Simpler taxes: Straightforward rental income reporting

The challenges:

• Lower income: Often 70-80% less than vacation rental potential
• Tenant risk: Non-payment, property damage, difficult departures
• Less flexibility: Harder to use the property yourself
• Rent stagnation: Long-term rents in Costa Rica haven’t kept pace with property values

When Long-Term Makes More Sense

Despite the income gap, long-term rental is the right choice in certain situations:

1. Your property is far from tourist areas. If it’s more than 20 minutes from beaches or attractions, vacation rental demand drops significantly.

2. You live overseas and want zero involvement. Vacation rentals require someone who can respond to guest issues within hours, not days.

3. Your property is a condo with strict rental restrictions. Some Los Sueños developments limit short-term rentals to 30+ days.

4. You need mortgage payment certainty. Long-term rent doesn’t fluctuate with tourism seasons.

5. Your property is a primary residence. Living in the property yourself makes long-term the obvious choice.

The Real Story Behind the Numbers

Those occupancy rates deserve more context. Here’s what the data doesn’t tell you.

The Seasonality Curve

Costa Rica’s vacation rental market runs on a pronounced seasonal curve. Peak season runs from mid-November through April, with December through March being the strongest months. During this period, well-managed properties in Tamarindo and Jacó can achieve 60-70% occupancy at premium rates.

Then comes the slow season. From mid-August through mid-November, tourism drops significantly. Occupancy might fall to 20-30%, and rates drop 20-40% to attract any bookings at all. Some owners simply close their properties during September and October rather than operate at a loss after expenses.

This seasonality means your annual vacation rental income isn’t 12 times your monthly peak. It’s more like 8-10 months of meaningful income spread across the year. Factor that into your projections.

What Actually Drives Vacation Rental Success

The difference between a property that earns $20,000 net per month and one that struggles to break even usually comes down to a few factors:

Location within location. A condo in central Tamarindo with a 5-minute walk to the beach performs completely differently from one 15 minutes away. Within any market, there’s a sharp drop-off in demand beyond a certain distance from the beach or main attractions.

Property type matters. A 2-bedroom condo faces different competition than a 4-bedroom house. The sweet spot for vacation rentals in Costa Rica tends to be 2-3 bedrooms, which serves the dominant guest demographics of couples and small families.

Amenities drive bookings. Ocean views, private pools, hot tubs, and modern kitchens aren’t luxuries in this market, they’re baseline expectations for properties commanding premium rates. A property without these features will compete in a lower price tier with thinner margins.

SuperHost status matters. Properties with SuperHost status on Airbnb consistently earn 20-40% more than similar properties without it. Achieving and maintaining SuperHost requires response rates below 1 hour, low cancellation rates, and consistent 5-star reviews. This is achievable with professional management but requires attention.

What Drives Long-Term Rental Success

Long-term rentals have their own dynamics:

Tenant quality is everything. In tourist areas, long-term tenants tend to be expatriates, remote workers, or seasonal visitors staying months at a time. The difference between a tenant who treats your property as their own and one who treats it carelessly shows in maintenance costs and property condition over years.

Lease terms protect you. A 1-year lease with a security deposit and advance payment provides stability that vacation rentals can’t match. But it also means you’re locked into that rate for the lease term, regardless of market changes.

HOA restrictions can limit options. Many condo developments in Los Sueños and similar communities have restrictions on short-term rentals. Some allow only 30+ day rentals. Always check with your HOA before assuming you can Airbnb your condo.

A Real Example

Let’s walk through a realistic scenario. Say you own a 2-bedroom condo in Tamarindo that you purchased for $350,000.

As a vacation rental:

• Peak season: 55% occupancy at $300/night = ~$16,500/month gross
• Low season: 25% occupancy at $180/night = ~$4,050/month gross
• Annual gross: ~$100,000
• After management and expenses (50%): ~$50,000 net

As a long-term rental:

• Monthly rent: $2,000 (mid-range)
• Annual gross: $24,000
• After expenses (15%): ~$20,400 net

The vacation rental nets you roughly 2.5x what long-term would, but requires more attention and carries more risk.

The Break-Even Calculation

The real question is whether the additional effort justifies the extra income. Here’s how to think about it:

If your vacation rental earns $50,000/year net and long-term earns $20,400/year net, you’re earning an extra ~$30,000/year for the additional work involved. Is that worth it?

If you self-manage the vacation rental, you might keep more of that difference. But self-management means handling guest communications, check-ins, cleaning coordination, maintenance issues, and more. Many owners find 10-20 hours per month isn’t unusual, especially during busy periods.

With professional management taking 20-30%, the income gap shrinks but so does your time commitment. This is why most successful vacation rental owners in Costa Rica work with property managers. The net result is higher than long-term while maintaining lifestyle flexibility.

The Bottom Line

For a well-located property in Tamarindo, Jacó, or Los Sueños, vacation rental typically outearns long-term by 8-10x. A $2,000/month long-term rental (mid-range) might gross $17,000+ per month as a vacation rental after professional management takes its cut.

But that gap narrows dramatically in low season, and it disappears entirely if you’re paying for management and still dealing with constant guest issues.

Most owners in Costa Rica’s best markets benefit from vacation rental income. The key is having a professional management team that handles the operational complexity so you get the income without the headache.

How to choose the right property manager can make or break your vacation rental returns.

One more factor to consider: Before committing to either model, check local regulations. Some municipalities require permits for vacation rentals, and regulations vary significantly by area. Tax treatment also differs between short-term and long-term rentals — our Costa Rica rental income tax guide explains what you need to know. If you’re looking at Los Sueños specifically, market data there shows strong vacation rental performance.

Ready to explore your options? Our team manages vacation rentals across Los Sueños, Jacó, and Tamarindo. We can help you understand what your specific property could earn and which model makes sense for your situation.

Talk to Our Team