How to Make Money in Costa Rica Without Starting a Business

Most people who move to Costa Rica in their forties are not retiring. They sold a house in Canada or the United States, they arrived with real money in the bank, and they need that money to produce an income. The plan is usually some version of the same plan: open a bar on the beach, a café, a little hotel, a tour company.

It is worth being honest about how that usually goes.

Why the beach bar rarely works

Running a business in Costa Rica is not running a business at home with better weather. The employment rules are genuinely different, and they are written to protect the employee. Staff are entitled to a thirteenth-month aguinaldo, to paid vacation, and to social security registration from day one, and ending an employment relationship is a formal process with real cost attached. None of that is hidden or unfair — but it catches out newcomers who budgeted for wages and nothing else.

Add the parts nobody pictures: municipal permits, health permits, a landlord relationship in a language you are still learning, seasonal income, and staff turnover in a tourist town. Plenty of foreign-owned businesses here work. Most of them are run by people who already knew how to run that business somewhere else, and who came with the patience for the paperwork.

The quieter option: put your money to work instead of your labour

There is a way to earn here that does not involve hiring anyone. Private lending against Costa Rican property means your capital is out working while you are not. There is no payroll, no staff schedule, no permits, no landlord, no season. Somebody else runs the business; you hold a loan secured against real property.

This is what GAP Investments arranges. A property owner needs capital and has equity in a titled property. A lender funds the loan, secured against that property, and receives interest for the term. Terms usually run from six months to three years, and rates run from 9% to 16% depending on the file. Those are the norms of this market rather than fixed rules — as the lender, you decide what you will and will not do.

To put numbers on it: $100,000 placed at 12% works out to roughly $1,000 a month in interest. That is arithmetic rather than a promise — every loan depends on its own borrower and its own property — but it gives you the shape of the thing.

Who makes a great lender?

Anyone with capital to put out can lend on Costa Rica property. Our lenders come from Canada, the United States and Europe, and plenty lend from their home country without ever moving here. If you sold a property back home and have capital sitting idle, you are already most of the way there.

A lot of them are people who came to Costa Rica looking for an opportunity and found that what they wanted was their capital working, not a business to run in a foreign country, with staff, permits and rules they are still learning. Others simply lend from wherever they live.

That describes a great many people who arrive here every year, and it describes almost every lender we work with. You do not need a finance background, and you do not need to know Costa Rican property law. You need capital you want earning, and the patience to look at a file properly before you say yes.

Who is actually borrowing from you?

This is the part that surprises most new lenders, and it is worth understanding before you look at a single file.

A foreigner living in Costa Rica generally cannot borrow from a bank here until they hold permanent residency — and that is a minimum of four years away for someone who has recently arrived. Without permanent residency you cannot open the kind of bank account the lending system runs on. No account means no local credit history, and no credit history means no mortgage, however much property you own outright.

So the people asking for private loans are frequently not distressed borrowers at all. They are your neighbours — Canadians, Americans and Europeans who own a home here free and clear, have assets back home, and simply cannot get a bank in Costa Rica to lend against any of it. Costa Rican owners come for a related reason: bank approval here runs to months, and a sale or a build will not wait that long.

That is the whole reason this market exists. Not because the borrowers are weak, but because the banking system here is closed to a large number of perfectly solid people.

Where the good files are

GAP advertises lending from 9% and up, and it is worth understanding what sits at each end of that range before you decide where you want to be.

Borrowers shop. A property owner with a strong file — good location, conservative loan to value, clean registered title, a clear way to repay — has options, and takes the better rate. That is why the 9% files tend to be the good files. A loan priced at 16% is priced there because something about it asks the lender to carry more uncertainty: a property that would take longer to sell, a thinner equity cushion, a less certain exit.

So the lenders who are open to 9% and 10% simply see more files, and often better ones. Saying you will look at 9% does not commit you to it — once we study the property, the location, the loan to value and the exit, the same file may come back to you at 12%. Most lenders end up with a mix: some loans at 9%, more around 12%, and once in a while one at 16% where the file calls for it. Our article on what interest rate a private lender should expect walks through how a file lands where it lands.

Compared with leaving it in the market

People weighing this up usually measure it against a portfolio at home, and the honest difference is what you know in advance. A loan has a stated rate and a stated term, agreed before you put a dollar in, so you know what the monthly interest should be and when the principal is due. The market tells you none of that — you find out afterwards.

That is not a guarantee, and it should not be read as one. A borrower can fall behind, and property-backed lending carries its own risks. But the arrangement itself is fixed and written down, secured against a registered property, rather than moving with the news every day.

You are not doing the work — we are

The reason lenders work with GAP is that we do the file work for you. We review the registered title and check for liens. We look at the property, the location and what it would realistically sell for. We assemble the documentation, prepare the loan and register the mortgage. GAP does everything up to and through closing, and stays available afterwards.

After closing, the arrangement is a simple one: the borrower pays you directly, and the loan is yours to hold. Keeping an eye on insurance, municipal standing and the maturity date is the lender’s side of it — there is not much to it, but it is worth knowing that it sits with you rather than with us. If something comes up, call us. Most lenders do, and we help where we can.

You are not expected to become an expert in Costa Rican property law. We work alongside you from the first file you look at through to repayment. Our preferred attorneys have been doing these loans for years and know exactly how they are structured — and if you would like your own lawyer to look over our work, that is welcome too.

Some lenders prefer the loan held in a trust, and some use escrow as part of closing. Both are straightforward to arrange. Some lenders also fund using crypto. Tell us how you prefer to work and we will structure around it. You can see the full sequence on our page explaining how lending works in Costa Rica.

Bigger appetite: project funding and commercial loans

Residential files are where most lenders start, but they are not the whole picture. GAP also arranges project funding and commercial loans, and these can be structured with drawdowns — the money released in stages as a build hits its milestones, rather than all at once. It is a different kind of file with a different rhythm, and some lenders come to prefer it. Our page on project financing in Costa Rica covers how those are put together.

Common questions

Do I need residency to lend in Costa Rica?

No — and you do not even need to be in the country. Residency plays no part in it, and plenty of lenders fund files from Canada, the United States and Europe without ever visiting. The only sensible caution is to take tax advice where you live, as with any income.

How much do I need to start?

Loans start at $50,000, and there is no maximum — lenders go as high as they want to. Worth knowing, though: most lenders prefer several smaller loans to one large one. Spreading capital across a few files means different properties, different borrowers and staggered maturity dates, so money comes back at intervals rather than all at once. Tell us the size of position you are comfortable with and we will show you files that fit.

What if the borrower stops paying?

The loan is secured against registered property, and the lender can start a foreclosure. To be straight with you about where our role ends: GAP’s formal job finishes at closing. In practice most lenders call us when something goes wrong, and we help where we can — we know the file, the property and the borrower. Our article on what happens in a foreclosure in Costa Rica explains the steps and the timelines.

Is this better than buying a rental property?

It is a different job. A rental means tenants, maintenance, management and vacancy. A loan means a fixed term, a fixed rate and a registered mortgage behind it. Many people who arrive planning to buy rentals end up doing some of both.

If you are working out what to do with your capital here

If you have recently moved to Costa Rica and you are weighing up how to earn from what you brought with you, this is worth a conversation. Look through our current lending opportunities to see the kind of files that come through, or contact GAP Investments and tell us what you are looking for. Every opportunity is subject to your own review, and no return is guaranteed.

This article is for general information only and is not investment, legal, or tax advice. All lending and investment decisions should be made based on independent due diligence and with qualified professional guidance.

Article by Glenn Tellier (Founder of CRIE and Grupo Gap)