How The Wave of New Projects Will Impact the Jaco Rental Market

How The Wave of New Projects Will Impact the Jaco Rental Market

How The Wave of New Projects Will Impact the Jaco Rental Market

Take a drive through Jaco, Costa Rica and you will see new construction seemingly everywhere.  With several new towers nearing completion and others set to get underway soon, Jaco is about to bring on the highest number of residential properties since the peak of its development in the mid-2000s.  Residents, travelers, and investors are wondering how this new development will impact the rental market in Jaco and the Central Pacific.  So I thought it would be a good idea to provide some insight on the market and how it will impact the rental market moving forward.  

Increased Competition for Bookings

The vacation rental market has transitioned to a point where today nearly all vacation rental bookings now come from the main platforms of Airbnb, Booking and VRBO.  While many managers and owners have had success on those sites, further saturation will create much more competition on those platforms.  Owners and managers will need to improve their photos, their response rate, their reviews and yes their pricing.  As that competition grows, expect to see many step up their marketing and the management of their listing to compete with the new inventory.  

The Renovation Era to Begin

Most of the condo development in Jaco was completed between 2005 and 2008, meaning many of the properties here are 15-20 years old.  Most of these properties have not seen any renovations and are often dated.  The new developments are featuring modern, contemporary design, with furnishings and trendy design.  With older properties looking to compete with new inventory, expect a wave of renovation to follow in Jaco.  We have already seen owners beginning to fully remodel and renovate their properties and foresee several owners doing this very soon so they can compete with new rental properties coming on the market.  


There is no way to sugarcoat it, all this new inventory is going to impact the pricing of the vacation rentals in Jaco, but not for everyone.  Inflation is driving rates up and for those with properties that rank well, in high demand, and well managed, they could see higher pricing as the market for the best of the best is always a premium.  But those who need to either climb the ladder in their marketing ranks or do not have desirable properties, quality photos, reviews, etc, well they are going to need to chase the budget travelers in order to compete and that means adjusting their pricing.  

Pivoting to Long-Term Rentals

The long-term vacation rental market continues to grow in the area and with more competition in the vacation rental space, expect to see more owners shift and instead focus on long-term rentals.  This is good news for those snowbirds and digital nomads looking for longer and more affordable stays.  

Increased Traffic and Growth to Outside Markets

More properties will equal more residents and more travelers.  This will lead to more services and more commercial development, which we are already beginning to see.  As the town of Jaco grows you will see interest and development to outside areas both to the North and South.  Hermosa, Esterillos, and Herradura have seen significant development over the past two years, and I expect those to continue to grow.  

The Good News

Some might be concerned about the new inventory coming to the rental market, but there are plenty of positives.  Competition can be very healthy in lifting the tide up for the entire area and forcing improvements throughout our vacation rental market. It is also important to remember that travelers and demand will continue to rise as well.  Costa Rica is still a growing tourism market that is still in its infancy and getting more interest each year.  The Jaco area also continues to merge more and more with the San Jose market which will continue to grow and help feed our market with consistent local tourism.  The goal for most owners of vacation rental properties in Costa Rica is to enjoy and use the property and offset their expenses with the rentals.  The good news is that even in a more competitive market this should still be a very reasonable expectation.

Written By David Karr

Originally from Washington State, David Karr is the owner of the Coldwell Banker franchise in Jaco, Costa Rica.  With nearly 20 years of experience, David takes a different approach to Costa Rica real estate, focusing on educating clients with the market, navigating them through pitfalls, and focusing as a buyers agent to make sure clients are presented with all options.   If you are looking for an expert in Costa Rica real estate be sure to contact him today.  US Direct 509.855.7457 or Costa Rica 506.8718.7216





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Once I contacted David Karr about buying a house in Costa Rica, he never gave up. When we arrived in Costa Rica, he had made arrangements to meet with Chris and Joy Gillard since David was out of town. Believe me! They listened and found us our dream home! Chris and Joy were more than realtors, they have so much knowledge about Costa Rica and we now consider them our friends.
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