Cost of living is something we can control to an extent. As we enter retirement or want to change our lifestyle, cost of living is best kept low. The money you save in living expense will give you extra for things like travel, eating out and things that we might fore go when our cost of living is higher. Living expenses arequite low in our developments but let's take a look at some of our larger expenses in life to see what I mean.
Things like food are not much lower than in north America since if food were much cheaper, some entrepreneur would show up from the states with a container and ship the cheap food to the US. Food has become a global market with ease of distribution. But since the average per capita income is only around $10,000 per year in Costa Rica, the real savings is on things like health care, property taxes and insurance. Those three items will typically be your largest expenses when living in north America. In Costa Rica health care is basically free for all residents (not just citizens) but most expats also buy a private insurance policy as well. There are two health networks in Costa Rica, the public and the private. Having a policy for the private network gets you many additional benefits including coverage for many items that would have to be life threatening including things like hip replacement, major cardiac surgeries and some things that would be considered elective surgery in the public health program.
In our developments, home owner association fees are minimal since we don’t build common area amenities like swimming pools, clubhouses etc into our developments. The fees we do charge are determined by each phase’s board of directors that are elected by the owners within that phase. The fees are only paying for common area maintenance, road maintenance, etc and as an owner in two phases myself, my fees in phase 2 are less than $100 per year and in phase 9 where I own one of the most expensive lots in the developments, I pay less than $500 per year (we hire a management company in phase 9 with the money and the manager then hires workers to do any necessary maintenance). We also provide management service both for rental and just during times when your house is not occupied, if you so desire. The rental service charges 15% of gross rent for short term rentals and 10% for long term rentals. Basic empty property maintenance costs vary depending on what level of service you are looking for. Property tax is incredibly low at less than $2 per thousand dollars in declared value and because our area of Costa Rica is not prone to natural disasters, home owners insurance is also low.
Things like hotel rooms, rental cars and restaurants in tourist towns have gone up in recent years as demand for tourism has doubled twice in the past 7 years in Costa Rica. Still not outrageous, hotels now cost around $75 - $100 for brand names like the Best Western, Holiday Inn, Ramada in the capital city. Names like Marriott and Intercontinental are in the $125-175 range. Rental cars run from $20 per day for economy compact 2 wheel drive to $50 - $70 per day (including insurance and tax) for a full size SUV like a Pathfinder or Toyota Land Cruiser Prado. The bottom line is that your cost of living will run perhaps 2/3rds of what you were paying in the states but you will have a higher level of service for that price. Domestic help, gardeners, maids, average in the $2 per hour range. Imported goods will cost more in Costa Rica than in the states but domestic goods produced in Costa Rica are quite reasonable and there is a domestic equivalent for nearly everything you might want. Walmart, Pricesmart and other major discounters from the states are operating in Costa Rica.
Water costs in our developments are based on the cost to maintain and operate the system, which has typically be estimated at $50 per year. A few years ago our association did some upgrades to our water system and that year we had to pay $100. The cost of water is for maintenance of the equipment, electric to run the pump, etc. Chlorine is just a precaution to ensure that whatever might occasionally be in water is disinfected and a good idea if you ask me. Chlorine input is typically minimal and done with an injection device that meters the chlorine. Our water comes right out of the ground via one big artesian well that is fed into the entire phase. Water quality is excellent and we have it tested annually and for many years never even chlorinated it.
Electrical in Costa Rica is supplied by a monopoly electric company, ICE. They generate 97% of their electricity from renewable resources, mostly hydro-electric but they also get some from geo thermal and have a big wind farm generator also contributing to their grid. Electric rates are comparable to the US but since none of our houses need heat and many use no AC, usage is less and therefore your costs are typically less unless you are running a lot of equipment.