StudioOctava

The Cost of Building a House in Costa Rica (2023 Update)

Alright, so you’re probably curious about how much it’s gonna cost to build your dream home in Costa Rica, right? Well, don’t worry, we got you covered in this blog post.

We’ll break it down for you and discuss the average price per square foot in some of the most popular areas of the country.

With this article, you’ll not only get a better idea of prices but also some peace of mind when it comes to planning your dream home.

So whether you’re dreaming of a cozy jungle bungalow in Nosara or a luxurious beachfront villa in Santa Teresa, keep reading to find the answer to the most commonly asked question about building a home in Costa Rica!

1 – The Basics of Building Cost in Costa Rica

2 – The Cost Categories You Need to Consider

3 – Building Hard Costs

4 – Building Soft Costs

5 – Factors & Examples of Construction Costs

6 – Summary

1 – The Basics of Building Cost in Costa Rica

1.1 Managing Cost Expectations

So, you might have stumbled upon an article online or had a chat with a real estate agent who seemed more focused on selling you the lot. They might have mentioned that the price per square foot would be around 120 to 140 USD.

But here’s the thing they forget to mention – these figures only cover the basic expenses of constructing the building itself. They don’t account for additional costs like infrastructure, managing contractors, hiring architects and engineers, dealing with the local authorities, taxes, building permits, and so on…

1.2 The Actual Cost per Square Foot

To provide you with a more accurate understanding, I would like to share the building costs for the projects we are currently undertaking in Costa Rica. As a general guideline, it is highly probable that the cost of your dream home will range from $220 to $260 USD per square foot.

This estimate includes both hard costs and soft costs. However, it is important to note that there are several other factors to consider, so the final cost may vary.

The actual cost can vary depending on the area and quality of materials used. Even the time that you choose for building. For instance, about 150 USD per square foot could potentially work out on an extremely low-cost project in San Jose.

However, for a custom home on the beach with higher standards and indirect costs, it is more realistic to expect the higher range.

Atrium Under Construction in Beachways Project, Mal Pais.
Beachways Villas in Mal Pais were built for around 180USD/sqft. © Matt Usher, Mal Pais 2023

To provide more specific examples: our Beachways Villas in Mal Pais were ultimately priced at approximately 180 USD/sqft, encompassing all expenses, including furniture and cutlery, turnkey ready.

Construction commenced in May 2022, with the owners actively involved in overseeing many intricate details and tasks. Some Luxury Villas in the Uvita, are valued at 200 USD/sqft, while some of our Projects in Nosara boast a slightly higher price point, averaging around 300 USD/sqft.

As you can observe, the cost varies greatly. Before we proceed further, I would like to extend an invitation for you to reach out to us via email if you have any further inquiries or would like to discuss your project in more detail. 😊 Nonetheless, let’s continue onwards!

2 – The Cost Categories You Need to Consider

Alright, so now that you’ve got a basic idea of the costs to expect, let’s dive deeper into the details. It’s important to really understand and explore the different cost positions that make up the overall budget I just mentioned earlier.

When discussing the budget of a project, we usually divide it into two main categories or segments. The first category is Hard Costs, which encompass all the expenses related to construction and building materials. This includes labor costs, materials, equipment, and any other direct costs associated with the physical construction process.

The second category is called Soft Costs, which encompass all the expenses associated with project planning, permits, and other administrative aspects. Typically, these costs are indirect and cover items such as architectural fees, engineering expenses, legal fees, permits, inspections, and other charges necessary to ensure compliance with regulations and obtain the required approvals.

By understanding these two major categories of costs, we can have a clearer picture of how the overall budget is allocated and ensure that all the necessary expenses are taken into account for a successful project.

3 – Building Hard Costs

When it comes to building a home in Costa Rica, most of the money you’ll spend will go towards the actual construction of the building. This includes the costs for materials and labor.

3.1 Material Costs

So, when construction companies estimate the costs, they usually consider materials to be around 40-50% of the overall expenses. Of course, the exact breakdown will depend on factors like the type of materials being used, the size of the project, and where the building site is located.

3.2 Labor Costs

Labor costs, on the flip side, make up about 50-60% of the total hard costs. These costs actually have gone up in recent years. If you want to read more about it you can follow this link >click here< to some more info about it. These costs can include everything from hiring workers as well as transportation to the building site. Labor costs can vary a lot depending on the size and complexity of the project, as well as the location of the building site.

Worker demoliting existing concrete structure.
Even simple tasks such as demolition require professional teams that can execute this task proficiently and maintain the surroundings clean and undamaged. © Matt Usher, Uvita 2023

When it comes to material and labor costs, it’s important to keep in mind that cheaper doesn’t always mean better. Cutting corners on materials or hiring less-experienced workers may cause problems in the future, like a shorter lifespan for the building or the need for expensive repairs. It’s crucial to find a balance between cost and quality when planning your budget.

A common mistake is to hire a small team without work insurance. When you obtain permits, there is basic insurance that needs to be paid, so make sure the team will use the basic insurance but also extend it because the basic one won’t cover the entire building time. This is important to protect yourself and everyone involved from potential legal issues.

We at Studio Octava work on a ton of fancy projects, mostly with foreigners. Most of the time, there isn’t even a question of working with less professional teams because the houses require a certain level of knowledge, craftsmanship, and professionalism. If you work with us, our only requirement is to build the project with a professional team that is legit and equipped with all the skills needed to create the project.

This ensures that the project avoids unnecessary obstacles during construction, which leads to a smoother working relationship and improved outcomes.

3.3 Infrastructure Costs

Site setup expenses can vary depending on the condition of the land where construction will take place. If it’s a raw piece of land that needs to be cleared and leveled, site setup costs can be pretty significant. However, if the land is already cleared and leveled, these costs can be reduced.

Team Studio Octava on a site visit in Nosara.
The team of Studio Octava on a site visit in Nosara. © Matt Usher, Nosara 2023

Usually, site setup needs to be done before any construction can begin, not just to get material or machinery on site, but also months before to get water and electricity from different institutions. Because this work is relatively small, the indirect and overhead costs for a contractor will also be higher, which means an increase in cost for you.

So, to sum it up, buying a remote property will probably result in higher costs for the following items:

  • Extending the electricity/water grid
  • Repairing roads or building your own entrance
  • Cutting/trimming trees
  • Building retention walls for roads

3.4 Contractor Administration Costs

Hiring a pro contractor to handle your building project on-site is a smart move. On average, contractors in Costa Rica charge around 10 – 15% of the project’s hard costs for their services. The construction administration usually falls in the 10%-11% range, while Turned key can range from 12%-15%.

But here’s the thing, there are some major benefits that come with hiring a contractor like this. They’ll take charge of the day-to-day work and make sure the project gets done on time and within budget.

They’ll also handle any problems that pop up during construction, like material issues or unexpected delays.

Sure, it might be tempting to save some cash by managing the project yourself or going with a less experienced contractor, but trust me, that can lead to even more headaches down the road.

A pro contractor has the skills and know-how to make sure your project is a success.

3.5 Technical Direction Costs

One of the challenges faced when building in Costa Rica is that many clients are not physically present in the country during construction. That’s where we come in, ensuring that the project is executed exactly as our clients envision.

The cost of each project varies depending on its complexity and location. Typically, you can expect a range of approximately 3 – 9% for our comprehensive oversight. This includes all travel expenses, accommodations, meals, transportation, and diligent supervision of the entire project.

3.6 Furniture Costs

Furniture is often overlooked when it comes to construction budgets. However, it’s crucial to remember that once the building is complete, it needs to be furnished and decorated. This aspect can be quite costly, particularly for larger buildings or those with luxurious finishes.

At StudioOctava, we typically allocate a budget of 150 – 300 USD per square meter for furniture, decoration, and appliances. This includes everything from sofas, beds, kitchen appliances, to lighting fixtures. Don’t forget to consider the square footage of terraces as well; they require a separate furniture budget. Many people tend to overlook this aspect but if you plan on spending time outdoors comfortably protected from the elements, it’s important to account for the associated costs.

The actual expense will depend on various factors such as the type of furniture and finishes chosen, the size of the space, as well as personal preferences and budget. Expensive finishes and custom-made pieces can significantly increase costs, while more affordable options can help keep expenses down. So, unless you’re aiming for a pricey 50k bathtub, a budget of up to 20-30 USD per square foot for furniture should suffice to cover your basic requirements.

3.7 Landscaping Costs

Landscaping is super important to think about when building in Costa Rica. A successful project needs to have enough plants that really bring out the whole project.

The lush and tropical environment of Costa Rica makes it the perfect place to create beautiful and sustainable landscaping designs.

The cost of landscaping can vary depending on how big and complicated the project is, and what you want to achieve. Usually, we set aside around 2 – 8% of the total construction costs for the landscaping design, including plants, materials, and labor.

3.8 Contingency Costs

Finally, it is important to always consider and include contingency costs in the budget for construction projects. This is because unforeseen expenses can emerge during the course of the construction process, and having a contingency fund helps to address and manage these unexpected surprises effectively.

A recommended range for the contingency fund is typically between 3% to 7% of the overall budget. This allocation ensures that there is a sufficient amount of financial cushion to handle most unforeseen circumstances that may arise during the construction project.

4 – Building Costs: Soft Costs

Another cost position we need to consider are the Soft Costs including fees for services provided by architects, engineers, and consultants, as well as fees for obtaining building permits and construction permits.

4.1 Engineers Fees

Engineers play a crucial role in any construction project. They are responsible for converting the architect’s vision into a functional, safe, and efficient structure. This includes ensuring the building can withstand environmental factors, such as Costa Rica’s frequent earthquakes and intense rainfall.

The cost of hiring an engineer can vary based on the complexity of the project and the engineer’s level of expertise. Typically, in Costa Rica, engineering fees can range from 1% to 3% of the total construction cost.

4.2 Architects Fees

Architects are the masterminds behind the conceptual design and aesthetics of a building. In the context of Costa Rica, hiring an architect is an essential element of the construction process.

Architects, like those from Studio Octava, bring forth innovative and creative ideas that not only cater to the client’s needs but also adhere to the environment and culture of Costa Rica. Additionally, they should be your people you trust, doing whatever is necessary to make your project a reality.

The cost of hiring an architect can vary depending on factors such as the reputation of the office, the level of personalization, and the scope and complexity of the project. In Costa Rica, architect fees typically range from 3% to 10% of the total construction cost.

It’s important to note that these fees often cover a wide range of services beyond the initial design phase. Architects may also be responsible for managing stakeholders, ensuring quality and cost control, and aligning with your vision as the client.

I know you’re curious about our prices, but unfortunately, I can’t spill all the details here. If you’re interested, why not shoot us a message to chat more about it? We’re always happy to answer any questions you may have!

I’m sure you’ll get it. 😉

4.3 Building Permits Fees

Building Permits & Construction Permits involve various aspects that need to be considered. These include the municipality’s requirements, insurance coverage, consultation with the School of Architecture, environmental considerations, permits for tree cutting, availability of water resources, and many others. Each of these factors plays a crucial role in ensuring compliance and successful completion of construction projects and present a certain cost, typically less than 1%.

5 – Building Costs – Drivers & Construction Costs Examples

To conclude, let’s delve into the key drivers of building costs in Costa Rica. To simplify matters, we’ll explore real-life examples that illuminate the factors that make a difference in this context. By examining these examples, we can gain a deeper understanding of the elements that impact building costs in Costa Rica.

5.1 Building Methods: Steel VS Concrete VS Timber

The most significant factor influencing costs is the quality of construction materials used. Will the building be constructed with a lightweight steel structure (the most cost-effective option), a standard concrete block system, customized and cast concrete, or will it feature extensive use of structural timber like glulam? Perhaps you are even considering something more unique, such as a building with a green roof.

The construction method employed not only impacts the physical characteristics of the building but also contributes to its overall aesthetic appeal and finally cost. Choosing the appropriate construction method involves careful consideration of both practical and visual aspects. If you would like to delve deeper into this topic, we have another blog post available for you to explore on our page.

5.2 Infrastructure

Another large expense, most often overlooked, when building in Costa Rica is the cost of infrastructure. This includes items like a connection to ASADA or AYA water provider, any electrical wires or poles that are temporary or permanent, roads and sewage lines.

The price of these services can vary wildly depending on the location and distance from existing infrastructure.

For example, if you’re building on a property, a big piece of land, and the house you are building is far away from the property lines, water, and electrical meter, you will be paying $25 to $50 per meter of infrastructure of underground tubing and/or wiring to your house.

If we are considering that we also need to build a road and maybe some retention walls the cost of infrastructure can add up quickly, so it’s important to factor this into your budget.

We have several projects where infrastructure alone will sum up to a six-figure investment for the owner.

5.3 Ceilings: Gypsum VS Timber

Timber, which is widely used for ceilings in popular areas like Nosara, Uvita, or Mal Pais in Costa Rica, can be a bit pricey. Many people love the tropical beach vibe that timber ceilings bring, adding a touch of natural elegance to their homes.

But, it’s good to know that choosing timber ceilings will cost you more, typically ranging from 3 to 4 times the price of ordinary gypsum ceilings.

That’s why, when designing buildings, we often go for drywall ceilings inside for a smooth and polished finish. On the other hand, we opt for timber on the exterior to create a warm and inviting look that blends perfectly with the natural surroundings. By combining these materials, we achieve the ideal balance of functionality and style that matches our customers’ aesthetics.

For clients that have more budget available, we are also working with structural timber such as glulam or laminated veneer lumber, which are structural elements that can be used for the entire structure or an entire roof, and also create unique spaces.

6 – Summary of Building Cost Costa Rica

I aimed to write an informative article that provides insights into the cost of building while offering a sense of certainty regarding expected expenses. I hope I achieved that goal.

When considering construction costs, it’s essential to keep in mind a range of $220-$290 USD per square foot. This figure allows for the creation of a high-quality building without excessive budgetary concerns.

Please note that this estimate does not include solar systems with batteries or advanced security systems. However, it does encompass a durable structure that will require minimal maintenance for years to come.

If you’d like us to assess your project and provide an estimate, please don’t hesitate to reach out. We’d be delighted to discuss your plans. I hope you found this article enjoyable and wish you every success with your project.

Best regards,

Matt

Hey There !
Welcome
To Paradise
& Our Blog

We are Matt & Rhina, the founders of Studio Octava. Studio Octava Is building residential and hospitality projects all over Costa Rica, This blog is about what we’re are working on, what tools we use as well as about our experiences as architects & developers.

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