Ownership at Punta Playa Vistas as investment property in Costa Rica can provide not only appreciation in value but also rental income. Many of our owners are absentee owners and work with our on-site property management team where we offer vacation rental management services.
Many owners are planning on using their property as a retirement home in the future but want to enjoy rental income until they are ready to retire see our retirement blog Visit puntaplayavistas.com! In some instances, even when an owner retires some only use their property during the winter months and use our property management services to rent it out for them the rest of the year. Other owners are using their retirement funds to purchase a home or a condominium as an investment property in Costa Rica where they expect to see a return on their investment.
Our in-house property management services handles all aspects of renting out your home or condominium as a vacation rental. We everything some listing it on vacation rental websites, to coordinating the check-in and check-out of the renters, executing a rental agreement and obtaining a security deposit. We take care of making sure the property is cleaned before and after the rental. We pay all monthly expenses on behalf of the owners including HOA dues, electric, cable, internet, real estate taxes and home owners insurance. We provide a monthly accounting statements to all owners and provide quarterly rental income disbursements. One of the issues that comes up if the property is not owned by is an IRA is what is what to do with the rental income profit?
As a property manager we are not able to retain your profits on an annual basis and must remit them to the owners for bank reporting purposes. Having the owners rental income on their investment property in Costa Rica wired to an out of country bank account every month or quarter is not economically feasible due to the wire transaction fees. We have come up with two solutions for our clients.
First, is we can do a transfer of the funds by paypal to a personal or business paypal account. The ability to send or receive money by paypal is very easy and more cost efficient that wire transfers. In addition, to do an international wire transfer it has to be done in person at a local bank which can take quite a long time depending on the lines at the bank. With paypal it is easy to remit rental income to the owners on a quarterly basis and the fees are fairly low.
The second option is to have the owner establish a bank account with a local bank where rental income profits can be transferred into on a quarterly basis. However, due to the new anti-money laundering and know your client banking laws that came into effect has prohibited non-residence from open a personal bank account. However, under the Costa Rica banking laws if you purchased your investment property in Costa Rica under the name of a corporation whether a Limited Liability Company or Sociedad Anonima (S.A.) it is possible to open a bank account in the company’s name.
You are allowed to open a local bank account in Costa Rica under the name of your corporation or company provided that the shareholders of the company are the same people who open the bank account. You can open the bank account using the corporate identification number (cedula juridica) and use passport as your personal identification. The banks require that you provide financial information for the company which is either a lease agreement showing the rental income for the property or a financial accounting statement from a local accountant.
In addition to this, you need the following documents:
1. Providing certification of legal status of the corporation issued no longer than 1 month ago, showing who the shareholders are.
2 . The constitutive Act of the corporation (copy)
3 . A document to validate the existing address (a utility bill in the name of the owner)
4 . Two identifications of each of the legal representatives that are the account signatories.
5 . Fill out the necessary documentation to open the account.
Buying investment property in Costa Rica is a great opportunity to generate rental income. For more information about how to own investment property in Costa Rica and details about opening a bank account send us an email.