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Costa Rica - 3 kids 7 days help planning trip

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We are planning a trip to Costa Rica Late Aug 09, 2 adults and 3 kids ( all boys) 8,10 and 12. I have been reading all I can and any advise on what to not to miss is appreciated. We usually take trips to all inclusives in the Carribean where there is unlimited sun and fun at the beach but we are ready to try something different .
So I am thinking 3-4 days of exploring and perhaps 3 days of relaxing.
Here is what I am thinking
Day 1 - fly into SJO ? stay where ?

Day 2 - Rent car drive to Arenal . So far based on the advise here I leaning towards staying at Lost Iguana. They have a package, stay 2 nights get 3rd free. Do I need 3 nights there, is there much to do and see of is 3 nights too much ?

Day 5, 6, 7 - ? MA?


Do we need a car in Arenal ? I understand its between 2 and 3 hrs from SJO but once we are there do we keep or return car? How much rain can we expect late August ?
Thanks in advance for your help .

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