Santa Teresa Rental Market: Investment Guide & ROI Analysis

Santa Teresa is not a resort. That’s the first thing to understand if you’re considering it as an investment. There is no gated community, no marina, no golf course, no beach club with a member roster. What there is, instead, is one of the most consistent surf breaks on Costa Rica’s Pacific coast, a genuinely international community, and a stretch of beach that draws a self-selecting crowd of travelers who chose difficulty over convenience. For a detailed look at what the area offers visitors, see our Santa Teresa area guide.

That distinction shapes everything about the rental market here.

This guide covers what Santa Teresa rental income actually looks like, who the buyers are, what property types perform, and the practical realities of owning and managing property in one of Costa Rica’s most desirable but least developed coastal markets.

The Santa Teresa Opportunity: Who It Attracts

Santa Teresa draws a specific type of investor, and understanding this matters more than any spreadsheet analysis.

The people who buy property in Santa Teresa tend to fall into three camps. The first are surfers and ocean enthusiasts who visited on vacation, found the wave quality unmatched anywhere in Central America, and decided they wanted a base they could return to indefinitely. Many of these buyers initially rented long-term before purchasing, giving them a realistic understanding of what the area is actually like rather than what the marketing portrays.

The second camp are digital nomads and remote workers who built careers that don’t require office proximity. Santa Teresa’s internet quality improved significantly in the past five years, and this demographic now represents a meaningful segment of both long-term renters and eventual buyers. They value the lifestyle: morning surfs, afternoon work, evening dinners at beachfront restaurants.

The third camp are investors who recognized the supply constraint. Santa Teresa sits on a peninsula with limited developable land. The main road is a single unpaved strip. Zoning restrictions and environmental protections limit large-scale development. Unlike Guanacaste, where new condo projects launch regularly, Santa Teresa has a fixed and relatively small inventory of available properties.

The common thread across all three groups: they value the lifestyle enough to accept lower returns than they’d find in more conventional investment markets. Santa Teresa is not where you go for maximum yield. It’s where you go when yield is one factor among several, and lifestyle and personal use rank alongside it.

Surf Tourism: The Engine of the Market

Every rental market needs a demand driver, and Santa Teresa’s is surf tourism. This is not a destination that attracts casual beachgoers looking for a resort experience. The guests who come here come for the waves, the yoga, the wellness scene, and the specific vibe that comes from a town where nobody is in a hurry.

The surf season breaks into two distinct periods that directly impact rental income.

Dry season (December through April) is high season. Offshore winds clean up the wave face each morning, swells are consistent at 3 to 6 feet, and the lineup fills with everyone from beginners at Playa Carmen to advanced surfers chasing the hollow breaks at Mal País. This is when occupancy peaks and nightly rates reach their highest. Christmas, New Year’s, and Semana Santa (Easter week) command premium pricing, with some properties charging 50% more than standard high-season rates.

Green season (May through November) brings bigger swells, more advanced conditions, and fewer tourists. The mornings remain excellent, but afternoon rains and onshore winds chop up the surface. Occupancy drops significantly. This is when rental prices soften and many properties offer weekly or monthly discounts to some maintain bookings. Some owners simply close their properties during the slowest months (September and October) rather than operate at a loss.

The surf-driven seasonality is the single most important factor to understand when projecting rental income. Santa Teresa is not a year-round destination in the way that Los Sueños or Tamarindo have become. The income window is narrow, and the financial model must account for five to six months of significantly reduced bookings.

The Numbers: Rental Yields and Realistic Returns

Let’s get specific. What does a well-managed vacation rental actually earn in Santa Teresa?

Nightly Rate Ranges

Property type and location within the Santa Teresa strip drive significant rate variation.

• Basic bungalows and simple villas (1–2 bedrooms): $100–$200 per night in high season, $60–$120 in green season
• Quality 2-bedroom villas with pool: $200–$400 per night in high season, $100–$180 in green season
• Luxury 3–4 bedroom villas with ocean views: $400–$800+ per night in high season, $200–$400 in green season

These rates assume professionally managed properties with quality furnishings, reliable booking presence, and responsive guest communication. Self-managed properties or those with dated interiors will fall below these ranges.

Occupancy Reality

Occupancy in Santa Teresa follows the seasonality curve aggressively.

• High season (December–April): 60–80% occupancy for well-managed properties. December through March are the strongest months, with February and Easter week typically achieving 80%+ occupancy.
• Shoulder months (May, November): 30–45% occupancy. Some recovery from green season lows, pricing adjusts downward.
• Low season (July–October): 15–30% occupancy. September and October are the slowest months. Many properties see occupancy below 20%.

Annual blended occupancy for a quality 2-bedroom villa: 35–50%. This is meaningfully lower than resort markets like Los Sueños, where annual blended occupancy regularly reaches 50–65%.

Gross Revenue Estimates

Property Type	Conservative	Mid-Range	Top Performer
1-bedroom bungalow	$18,000	$25,000	$32,000
2-bedroom villa	$30,000	$42,000	$55,000
3-bedroom villa	$50,000	$70,000	$95,000
Luxury 4+ bedroom villa	$80,000	$120,000	$180,000+

These are gross figures before any expenses. The gap between conservative and top performer reflects three factors: interior quality and furnishing standards, professional photography and listing optimization, and management responsiveness.

Net Returns: What Owners Actually Keep

After management fees, operating costs, and carrying costs, the picture changes.

Typical expenses to factor:

• Management fee: 20–25% of gross revenue
• Platform commissions: 3–15% (Airbnb, Vrbo, Booking.com)
• Cleaning costs: $40–$80 per turnover
• Utilities (electricity, water, internet): $300–$600 per month
• Property taxes: $500–$2,500 annually
• Insurance: $1,000–$2,500 annually
• Maintenance and repairs: $2,000–$5,000 annually
• Furnishing reserves: $1,500–$3,000 annually

Net operating income for a well-managed 2-bedroom villa: roughly $12,000–$20,000 per year, depending on occupancy and expense management.

Net yield on a $400,000 property: 3–5% in a good year. In a slower year or if occupancy underperforms, yields can drop to 1–2%.

This is a modest-return market. Owners who buy expecting 8–10% cash-on-cash returns will be disappointed. The financial case for Santa Teresa rests on the combination of rental income, personal use value (having a surf base you can visit whenever you want), and long-term appreciation in a supply-constrained market.

Who Buys in Santa Teresa

The buyer demographic has shifted noticeably over the past decade.

Five years ago, the typical Santa Teresa buyer was a surfer in their 30s or 40s who had been visiting for years and finally decided to stop renting and buy something. The profile was lean: modest bungalows, focus on location near the surf, willingness to tolerate infrastructure limitations.

Today, the buyer base is more diverse and more affluent. Several factors drove this shift. The international wellness and yoga scene in Santa Teresa matured, attracting a demographic with more disposable income. Remote work became normalized, making it feasible to base yourself in Santa Teresa while earning a US or European salary. And a handful of luxury villa developments launched, creating an upper tier of inventory that didn’t exist before.

The current buyer breakdown looks something like this:

• Surfers who became owners (still the largest single group): typically buy in the $300,000–$600,000 range, focus on proximity to surf breaks, willing to compromise on amenities for location
• Digital nomads turned investors: buy $250,000–$500,000 properties as both income generators and personal bases, often split their time between Santa Teresa and another location
• Wealthy lifestyle buyers: purchasing $800,000–$2,000,000+ luxury villas with pools, ocean views, and full management in place. This segment grew significantly in the past three years
• International investors: primarily from the US, Canada, and Europe, often purchasing through Costa Rica corporations, seeking a combination of rental income and personal use weeks

The common thread across all buyer types: they plan to use the property personally. Santa Teresa is not a purely passive investment market. The owners who do best are those who also value having a place in one of Costa Rica’s most authentic surf towns.

Property Types: What’s Available and What Performs

The property landscape in Santa Teresa is narrower than you might expect for a market with this much interest.

Villas

The dominant property type. Most villas in Santa Teresa are 2–4 bedroom detached homes with private pools, outdoor living spaces, and tropical gardens. Entry-level villas (2 bedrooms, no pool) start around $250,000–$350,000. Quality 2–3 bedroom villas with pools typically range $400,000–$700,000. Luxury ocean-view villas with 4+ bedrooms run $800,000–$2,000,000+.

Villas perform best as vacation rentals because guests value the privacy, outdoor space, and pool access. The higher-end villas with modern finishes and reliable WiFi can command premium rates, especially among families and groups.

Bungalows

Simpler, single-story structures, often on smaller lots. Many were built by early settlers in the community and have a more rustic character. Bungalows in good condition range $150,000–$300,000. They can work as rentals but typically appeal to a budget-conscious demographic that also considers hostels and eco-lodges. Nightly rates are lower, and the tenant profile tends toward younger travelers and surfers on extended stays.

Development Land

Available land in Santa Teresa has become increasingly scarce and expensive. Ocean-adjacent lots suitable for villa development start around $400,000 and go up to $1,500,000+ depending on location, views, and road access. Raw land further from the beach can be found in the $150,000–$300,000 range, but building timelines in Costa Rica (permits, contractor availability, material logistics) typically run 18–24 months from purchase to completion.

Land investment requires patience and a clear building plan. It’s not a turnkey rental play, but for buyers who want to build their dream home or develop a rental property from scratch, it’s the primary avenue.

Commercial

A small but notable segment: boutique hotels, restaurants, and surf shops. Commercial properties in the main Playa Carmen strip can generate steady income from long-term tenants, but the inventory is limited and pricing reflects the scarcity. Expect to pay a premium for any commercial property with street frontage in the active zone.

Infrastructure: The Realities of Off-Grid Living

Infrastructure is the most commonly underestimated challenge for Santa Teresa investors. The area has improved significantly in the past decade, but it remains fundamentally different from managed resort environments.

Road access. The main road through Santa Teresa is unpaved for most of its length. It’s dusty in dry season, rutted and washed-out in green season, and requires a 4x4 vehicle year-round. Some properties are on secondary roads that are even more challenging. If you’re evaluating a property, visit during or immediately after a rainstorm to understand the actual access conditions.

Electricity. Power outages occur, particularly during green season storms. Most well-managed vacation rentals have backup systems (generators or inverters) to maintain critical functions during outages. Before purchasing, ask specifically about the property’s power backup setup. Some areas of Santa Teresa also experience voltage fluctuations that can damage appliances.

Water. Municipal water supply is limited in Santa Teresa. Many properties rely on private wells or rainwater catchment systems. Water quality and consistency vary significantly by location. Ask about water source, storage capacity, and any history of shortages. Most rental properties provide filtered or bottled water for drinking.

Internet. This has improved dramatically. Fiber connections are available in the main Playa Carmen and Santa Teresa strip, with download speeds of 50–100 Mbps increasingly common. Uplink speeds can still be inconsistent, which matters if you’re hosting video calls. Outside the main strip, internet quality drops significantly. Verify actual speeds at any property you’re considering rather than relying on what the listing claims.

Cell service. Kolbi has the best coverage in the area. Most residents and long-term visitors buy local SIM cards. Coverage is reliable in the main town area but spotty in some residential zones further from the road.

Risks and Challenges

Being realistic about challenges protects both your investment and your sanity.

Extreme seasonality. The income window is five months. Properties that perform well in December through April can see occupancy collapse in September and October. Owners need reserves to cover carrying costs during slow months, or they need to accept that the property may sit empty for significant periods.

Off-grid maintenance. Tropical environments are hard on buildings. Salt air, humidity, rainfall, and insects all accelerate wear and tear. Maintenance budgets in Santa Teresa tend to run higher than in more temperate climates. Plan for regular repainting, deck resealing, appliance replacement, and landscaping maintenance.

Management availability. The professional property management infrastructure in Santa Teresa is less developed than in established resort markets. Fewer management companies exist, and those that do operate often have limited capacity. Finding a reliable manager who can handle guest communication, cleaning turnovers, and maintenance issues from afar is essential but can take time. Our comprehensive guide on choosing a property manager in Costa Rica covers what to look for and the questions to ask.

Property access and logistics. Getting goods and services to Santa Teresa requires planning. Furniture deliveries take longer than in the Central Valley. Contractor availability is limited. Specialty items may require trips to San José or Liberia to source. Building or renovating in Santa Teresa takes longer and costs more than equivalent projects in more accessible locations.

Regulatory uncertainty. Short-term rental regulations in Costa Rica are evolving. Municipalities in popular tourist areas have begun imposing restrictions on vacation rentals, and Santa Teresa could see new rules in the future. Our guide to vacation rental regulations in Costa Rica covers the compliance requirements. Work with a local attorney to understand current regulations before purchasing with rental intent.

Conclusion: Is Santa Teresa Right for You

Santa Teresa is not for every investor. If your priority is maximizing cash-on-cash yield, if you need consistent year-round occupancy to service debts, or if you expect turnkey management with minimal involvement, look elsewhere.

Santa Teresa is for investors who want something more specific: a property in one of Costa Rica’s most desirable surf communities, with meaningful personal use potential, in a market where supply constraints support long-term value. The returns are modest. The lifestyle payoff is significant. The community is unlike anywhere else on the Pacific coast.

If that tradeoff makes sense for you, the entry point for a quality 2-bedroom villa in the $400,000–$550,000 range represents a realistic starting point. Budget an additional $30,000–$50,000 for furnishing and setup. Plan for $15,000–$25,000 in annual carrying costs beyond rental income. And expect years one through three to build momentum as your listing accumulates reviews and repeat guests.

The financial case is honest: Santa Teresa covers its costs and provides a lifestyle asset that appreciates. The lifestyle case is stronger: you’re buying into a community and a wave that keep drawing people back year after year.

This guide is for informational purposes only and does not constitute legal or tax advice. Consult a qualified Costa Rica attorney or tax professional.

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