Airbnb vs. Long-Term Rentals: Profitability by City in Costa Rica

Published on April 24, 2026 and written by Cyril Jarnias

Rental Investment in Costa Rica: Airbnb vs Long-Term Leasing

In a context where Costa Rica’s real estate market is experiencing unprecedented momentum, interest in rental investments becomes crucial for property owners and investors.

This article provides a detailed analysis of the profitability of Airbnb offerings compared to long-term rentals, highlighting significant variations from one city to another.

By comparing key figures from San José, Liberia, and Jaco, we delve into the economic and tourism characteristics that influence these markets.

Whether you’re a potential investor or a property owner looking to maximize rental income, this article offers valuable insights to navigate this promising environment wisely.

Airbnb vs Long-Term Rental Comparison: Study Methodology

City Selection Criteria:

• City selection based on:
  • Airbnb Market Size (number of active listings over the past 12 months)
  • Average Occupancy Rate
  • Average Generated Revenue
  • Regulatory Accessibility (preference for cities with favorable short-term rental regulations)
  • Growth Potential and Absence of Market Saturation
  • Low Seasonality (cities where demand remains stable year-round)
• Analyzed cities primarily include urban centers like San José as well as major tourist destinations where supply and demand are significant.

Data Sources Used:

• Airbtics: Specialized platform providing aggregated Airbnb data (occupancy rates, average daily rates, rental yields, number of listings, etc.) for each selected city.
• Airbnb: Manual extraction of complementary data (number of active listings, property characteristics, price ranges).
• Local Long-Term Rental Markets: Collection of average rents through Costa Rican real estate portals, local agencies, and platforms specialized in residential leasing.

Applied Statistical Methods:

• Profitability Comparison between Airbnb and long-term rentals conducted via:
  • Calculation of annual gross rental yield for each rental mode:
    • Airbnb: ( text{Yield} = frac{text{Occupancy Rate} times text{Average Daily Rate} times 365}{text{Property Purchase or Rental Price}} )
    • Long-term rental: ( text{Yield} = frac{text{Average Monthly Rent} times 12}{text{Property Purchase or Rental Price}} )
  • Analysis of the rent gap (profitability difference between the two modes)
  • Use of statistical tests (e.g., t-test for independent means) to assess the significance of observed differences.
  • Consideration of seasonality through moving averages and seasonal indices, particularly for calculating Airbnb occupancy rates.

Analysis Period:

Start Date	End Date	Justification
July 2024	June 2025	Latest 12-month rolling period, including all tourist seasons to neutralize seasonal effects

Assumptions Regarding Occupancy and Seasonality:

• Airbnb Occupancy: Use of annual average occupancy rates provided by data platforms, assuming uniform distribution throughout the year (which mitigates the impact of seasonal peaks).
• Long-Term Rental: Assumption of constant 100% occupancy, without significant vacancy periods.
• Rent Stability: Assumption that long-term rents do not change significantly during the study period.
• Fees and Charges: Not included in the gross comparison, except in sensitivity analyses.

Study Limitations and Impact on Results:

• Airbnb data relies on averages, which may mask significant intra-urban variations or differences by property type.
• Long-Term Rents come from heterogeneous sources and may not reflect actual transactions.
• The zero vacancy assumption for long-term rentals overestimates the profitability of this mode.
• Specific fees (cleaning, management, platform) related to Airbnb are not included in main calculations, which overestimates the gross profitability of short-term rentals.
• The study does not account for regulatory risks or sudden changes in local policies.
• Seasonal fluctuations are averaged, which may underestimate the risk of irregular income for Airbnb hosts.

Key Takeaways:

• Results should be interpreted with caution and adapted to each investor’s specific situation.
• A more detailed analysis, incorporating expenses, maintenance costs, risks, and actual vacancy rates, would be necessary for definitive decision-making.

Seasonal Rental Yield: Focus on Major Costa Rican Cities

City	Seasonal Occupancy Rate (%)	Average Annual Airbnb Revenue (USD)	Average Monthly Long-Term Rent (USD)	Main High Season	Main Low Season
San José	57	11,000	700–900	January	September–November
Tamarindo	62–70*	22,000–28,000*	1,000–1,300*	December–April	May–November
Manuel Antonio	60–65*	20,000–27,000*	950–1,200*	December–April	May–November
Jaco	55–65*	15,000–22,000*	900–1,100*	December–April	May–November

*Estimated data based on national and regional trends; exact values vary by location and property quality.

Profitability Comparison: Airbnb vs. Long-Term Rental

• The gross income generated by seasonal rentals (Airbnb) is on average 1.5 to 2.5 times higher than that of long-term rentals, especially in coastal tourist areas.
• In San José, an Airbnb rental generates an average of $990 per month, compared to $700 to $900 for a traditional rental.
• In Tamarindo and Manuel Antonio, the differential is even more pronounced, with the high season allowing for doubling or even tripling the monthly rental yield compared to traditional leasing.

Factors Influencing Seasonal Rental Yield

• International Tourism: Record tourist numbers drive demand, especially during high season (December to April).
• Seasonality:
  • High Season (dry season, year-end holidays, North American and European vacations): Maximum occupancy rates and prices.
  • Low Season (rainy season, May to November): Notable decrease in demand and prices.
• Local Events: Festivals, sports competitions, school holidays, and public holidays cause temporary peaks in occupancy and revenue.
• Property Type: Studios and two-bedroom units are most in demand in cities, while villas and large houses attract groups in coastal areas.
• Location: Proximity to beaches, downtown areas, or national parks significantly improves yield.

Recent Statistics Illustrating Profitability

• San José: Annual occupancy rate of 57%, average annual Airbnb revenue of $11,000, compared to $8,400–$10,800/year for long-term rentals.
• Tamarindo: High season occupancy rate of 70%, annual Airbnb revenue often exceeding $22,000, compared to $12,000–$15,600/year for long-term rentals.
• Manuel Antonio & Jaco: Similar profiles, with annual Airbnb revenues 50–100% higher than long-term rentals, depending on the period and property quality.

Impact of Local Legislation

• Current Regulations: Legislation remains relatively flexible, with few major restrictions on seasonal rentals, particularly in San José where laws are described as “lenient.”
• Trends:
  • Some municipalities are considering introducing registration requirements, safety standards, or even specific taxes.
  • A shift toward stricter regulations could reduce medium-term profitability, particularly through limitations on total rental duration or increased tax requirements.
  • To date, Airbnb market growth has not been significantly hindered by legislation, but regulatory monitoring is essential for investors.

Key Takeaways

Seasonal rentals via Airbnb generate significantly higher yields than long-term rentals in major Costa Rican tourist cities, especially during high season. However, profitability remains heavily dependent on tourist seasonality, local events, and future regulatory framework developments.

Lease Agreements in Costa Rica: Legal Elements to Consider

Key Legal Elements of Lease Agreements in Costa Rica

• Applicable Law: Residential leasing in Costa Rica is primarily governed by the Ley General de Arrendamientos Urbanos y Suburbanos (General Law on Urban and Suburban Leases). This law applies to the vast majority of long-term lease agreements and provides a protective regime for tenants.

Contract Duration

• Long-Term Rental: The legal minimum duration for residential lease contracts is three years, even if the contract specifies a shorter period. This provision is of public order and cannot be circumvented by the parties.
• Short-Term Rental (Airbnb type): Tourist rentals (1 to 30 days) in designated areas registered with the National Tourism Institute are exempt from this requirement. For these rentals, the literal interpretation of the contract prevails.

Main Landlord Obligations

• Provide a property in good condition.
• Perform major repairs necessary for peaceful enjoyment of the property.
• Return the security deposit (generally one month’s rent) within 30 days after lease termination, minus any damages beyond normal wear and tear.
• Respect contract clauses, particularly regarding rent review and property condition reports.

Main Tenant Obligations

• Pay the agreed rent on time.
• Maintain the property in good condition and return it in its initial state (excluding normal wear and tear).
• Not sublet or transfer the lease without the landlord’s written consent (often stipulated in the contract).

Rights and Early Termination

The tenant may terminate the contract at any time, provided they notify the landlord with notice (generally three months). Conversely, the landlord cannot terminate the contract before the three-year term expires, except for serious grounds defined by law (non-payment, major damages, etc.).

Rent Review Clauses

Rents may be reviewed once per year, with a maximum increase generally indexed to inflation or a percentage set by law (often below 15%). Any increase beyond this must be specifically justified and accepted by both parties.

Local Regulations for Short and Long-Term Rentals

Some municipalities impose restrictions or specific permits for short-term rentals, especially in tourist areas. It is essential to verify the property’s compliance with zoning regulations and obtain necessary authorizations.

Comparison Table: Short-Term vs Long-Term Rental

Criterion	Long-Term Rental	Short-Term Rental (Airbnb, vacation)
Minimum Contract Duration	3 years (legally)	1 to 30 days (registered as tourist)
Applicable Law	Urban/Suburban Lease Law	Contract interpreted literally
Rent Review	Once/year, indexed, limited	Freely negotiated
Security Deposit	1 month’s rent (common maximum)	Freely set amount, variable practices
Early Termination	Notice period, tenant protection	According to contract, variable flexibility
Tax Obligations	Income tax on rents, annual declaration	VAT + Income tax, monthly or quarterly declaration
Permits/Authorization	Few restrictions	May require municipal/ICT permit

Tax Implications for Property Owners

Long-Term Rental

Rental income is subject to income tax. The property owner must declare this income annually. Possible deductions exist for certain expenses (maintenance, repairs, property taxes).

Short-Term Rental (Airbnb and similar)

• Income is subject to VAT (13%) and income tax.
• The property owner must register as a tourism service provider with the ICT and file regular tax returns (monthly or quarterly).
• Tax authorities closely monitor these rentals, particularly through digital platforms.

Legal Protections Offered to Tenants

• Strict regulation of minimum lease duration.
• Limitation of landlord termination grounds.
• Protection against abusive rent increases.
• Right to security deposit return, excluding normal wear and tear.
• Access to legal recourse in case of dispute.

Influence on Real Estate Investment Profitability by City

In major cities (San José, Liberia, Heredia), long-term rental offers income stability, but rent increases are limited and flexibility is reduced.

In tourist areas (Tamarindo, Jacó, Manuel Antonio), short-term rental can generate higher income, but with increased management costs, heavier taxation, and dependence on seasonality and local regulations.

Municipal restrictions and the need to obtain permits can impact profitability in certain coastal cities.

Key Takeaways

• Costa Rica strongly protects tenants in long-term rentals.
• Short-term rentals require increased vigilance regarding taxation and permits.
• The choice between long and short-term rental depends on investment profile, location, and ability to manage regulatory compliance.