Nicaragua: The Next Costa Rica

Why Nicaragua? Why now?

Because you may not find another chance like this again in your lifetime… Right now Nicaragua is like Costa Rica was a decade ag unspoiled, affordable, and offering a relaxed lifestyle even harder to find now in the U.S. than it was then.

The Costa Rica of today is known as an expat destination. It’s still beautiful…still friendly…but affordable? Not any more.

By contrast, in Nicaragua you’ll findcoastal and beachfront property bargains that are so cheap you'd be crazy not to snap them up...including beachfront lots for as little as $40,000...and private islands for as little as $60,000. You’ll also find freedom from reams of red tape and paperwork. In fact, the economic climate is so free here, you don't even need a permit to build a home or go hunting. You can ride horse back along the beaches, and no one will object. You can start a business, and the government will reward you with tax breaks. And, if you’re looking to retire, you’ll find attractive retirement programs designed to seduce adventurous retirees...offering you tax breaks on your offshore income...your cars...your imported goods. And the requirements are easy.

Mark these words: This is the opportunity of this decade. Which is why we’re dedicating the rest of this week to one of our favorite countries. Watch this space for more about Nicaragua: The Next Costa Rica...including our picks of the best beachfront property deals in one of the world’s most beautiful countries.

Tuesday, February 8, 2005
Granada, Nicaragua

I return to Nicaragua four or five times a year, and each time I am more impressed by the continued improvements in infrastructure and available services in this country. Crews have been at work widening the road from Managua to Granada for about a year. Each trip I can see the progress. While the pace of the work doesn't match what it would be in, say, the U.S., it is respectable. And, most important, it continues.

The main shopping mall has added a dozen or so new stores since being expanded last year, and new first-class hotels have opened in recent months in San Juan del Sur and south of the town along the coast.

On my most recent visit, what struck me most, though, was the number of new property developments coming online. The real estate market in this country is heating up. Lots of new players on the scene...and lots of new inventory (both of lots and of turn-key construction, including beachfront) becoming available.

I came to Nicaragua this time for International Living's Latin American Investment Symposium. But, following the conference, I stayed on a few extra days so I could travel around and see some of the new real estate development activity myself. Clocked a lot of hours driving this country's roads (both paved and unpaved). Bouncing along the bumpy stretches of dirt, I was reminded of another trip to another Third World country a few years ago. My guide on that trip, after we'd been bumping along a good long stretch of well pot-holed beach "road," relayed a comment an investor had made to him the previous week: "Call me when the prices are higher," that would-be buyer had told the real estate agent.

In other words, the guy wanted the agent to call him when the road was better and all of the infrastructure was in place. He realized this would mean appreciation in the price of land...maybe a lot of appreciation. But he was willing to wait...and to pay the premium.

I prefer to get in at the bottom. Before the infrastructure. Yes, investment at this early stage can amount to speculation...and, yes, you need a strong back and a good pair of kidneys to survive the exploratory research to find the opportunities in the first place. But front-running the infrastructure, as I think of it, is the best way to position yourself for the greatest profits.

But it's not for everyone. Not everyone is up for that level of risk...or the physical wear and tear. I'm happy to report that, in Nicaragua, the risk is growing ever less, while the infrastructure becomes ever more advanced. And we are at the happy point in this market where those two things are true...but it is still possible to find real bargains. No, prices aren't as low as they were five or six years ago...but good deals are still to be found. This phase of a market cycle doesn't last long. How much longer it'll continue in Nicaragua, I couldn't say. I can tell you, though, that, while it does, the opportunities are exciting.

Nicaragua remains a frontier land. But this frontier is an ever-more-comfortable place to send time.

From Managua south, most of this country's coastal land has been or is right now beginning to be developed. The would-be buyer now has a wide range of choice--from well-developed residential or resort communities (like Rancho Santana) to the-developer-just-surveyed-the-lots kind of buys.

The first phase of any new development, as you know, is when prices are at their best. Right now, in Nicaragua, as I saw myself last week, there are a handful of very attractive new developments, including beachfront choices, coming online...offering very attractive early-in pricing.

This week, I will tell you about the best of these new opportunities.

Regards,

Lief Simon
Real Estate Editor, International Living