Paradise is more affordable than you think
Retiring in Nicaragua
There are so many good reasons to retire in Nicaragua. Nicaragua, with a population of about six million, is the country in Central America with the more water natural reserve.
It has a constant 85-degree temperature, stunning landscapes, and warm and gracious smiling people. Their culture and religions is fascinating and almost everyone speaks English, which means there’s no or very few language barriers, making daily life that bit more easier and relaxed. Plus, who wouldn’t want the conveniences of a home with beautiful beaches, excellent shopping and delicious food for a fraction of the cost.
San Juan del Sur and is the most popular location inhabited with expats and tourists. This area has all the Western amenities that you could think of, making fitting-in here a breeze.
How not to buy a property in Central America
Moving overseas to a country where your dollar goes further is perhaps the most radical way of slashing your living costs and upgrading your lifestyle. From my vantage point in San Juan del Sur, Nicaragua, where I have been working in the real estate sector for more than a decade, I've seen a marked shift from the "speculator investor" of the early 2000s looking for a quick flip to the post-crisis "lifestyle investor" looking to relocate overseas and enjoy a higher standard of living than would be possible back home.
But in these dollar-stretching lands of cheerful promises and excited real estate pitches, it's easy to get caught up in the dream of overseas home ownership and ignore the cold facts and hard truths.
Beware the "sunshine fever"
You see, there's a contagious fever that you can catch when exploring property options in a foreign country. Called "sunshine fever" or "land fever" it normally starts when you're standing on the beach, wiggling your toes in the soft sand, watching the sun slowly setting over the ocean.
The fever builds as the property developer reveals the price of an ocean front lot a few steps from where you are standing and points out the planned clubhouse, the boardwalk, the spa and ... gasp ... the site for the future golf course. Then over dinner, as you drink the local rum, eat the fresh fish caught only a few hours before and enjoy the easy-going hospitality, you become well and truly hooked.
And why not? The beaches of Belize, Costa Rica, Uruguay, Panama, and Nicaragua, to name just a few popular international markets, are beautiful. The ocean water is warm year-round, the local culture exotic and welcoming and the prices (both for property and day-to-day living) far lower than back home.
It's no wonder you get hot under the collar and feel a strong urge to secure that last available lot on that gorgeous stretch of sand. After all, they're not making any more beachfront are they?
However tempting the idea of owning the first slice of paradise that seduces you, it's important to take things slowly. You don't want to make a feverish decision that you'll later regret. The key to securing a profitable investment in a foreign country is to take all promises, anecdotes and assurances with a pinch of salt, however much you want them to be true.
Truth is, in the absence of reliable statistics in many foreign real estate markets, it can be difficult to distinguish a good deal from a poor one. You won't be able to get hold of data such as market comps, days on the market or price trends that investors use to drive their investing strategies in more mature markets.
You'll only be able to cultivate a good nose for value by carefully triangulating information you receive from different sources; talking to everyone you meet about the property market (without taking everything you hear at face value) and (ideally) building your own spreadsheet of comparative prices.
All of this takes time; which is why you need to slow down and allow all vestiges of land fever to subside. By all means let your emotions flow as you enjoy the romance of buying a property overseas, but balance this with the numbers and the cold facts.
Buy only what you can see
If there is one piece of advice to take from this article, it's this: Only buy what you can see and touch. And I mean that literally.
I'e been following the market in Central America since 2002 and visited dozens of planned real estate communities with impressive master plans complete with beautiful renderings and glossy brochures. As the developer rolls out an over-sized map of the master plan and you scan the beautiful vision, it's hard not to feel a tingle of excitement about what could be created here... and what your life could be like if you lived here.
But, no matter the good the intentions of the real estate developer and genuineness the promises, things don't always go as expected. This is evidenced by the planned clubhouses, docks, marinas, golf courses, wellness spas, hotels, gyms, boardwalks and tennis courts that are yet to be realized. Some master planned developments in the region have been stalled for months, others for years.
So as you stand on the beach wiggling your toes and watching the sunset ask yourself whether you'd be happy with owning an oceanfront lot without the clubhouse, without the spa and with nowhere to play golf.
Are the sand, sun and sea enough? In many instances they are.
Just make sure you are making your purchasing decision based on the inherent value of what is there. Don't get seduced by (and then end up paying for) a future vision or a planned set of amenities and services that may never come to fruition.
Central American Real Estate & Property Investments
The Central American real estate region forms a geographical link connecting the North American continent to the South American continent.
The region is bordered by the Caribbean Sea to the west and the Pacific Ocean to the east. Central American real estate is very popular for expatriates, retirees, people wanting to live abroad, and for real estate investors from all over the world.
Nicaragua Real Estate.
Located in the middle of Central America and undoubtedly a beautiful nation, Nicaragua has suffered from misconceptions about its lack of safety as a nation in which to live as a foreigner.
Those who suspend preconceptions discover a country that’s actually already home to an increasing number of expatriates, and one where real estate investment opportunities are perhaps unrivaled in the entire region.
According to a study produced by Harvard’s business school affiliate in the Central American region, Nicaragua is the second safest country in the hemisphere after Canada. It has secure property rights for those who enter into deals following correct legal procedure.
Property investment opportunities are relatively broad, and include restoration as well as new development, and residential and commercial letting.
The cost of living is very attractive and the Nicaraguans are very friendly towards expatriates.
Popular markets include Granada, Leon and San Juan del Sur. Alternatively consider emerging opportunities in San Diego.
Which Central American country is the best to invest in?
Central America is rapidly growing as one of the most desirable regions of the world in which to invest. Whether you’re thinking about currency diversification or real estate investment, Central America offers some clear advantages. However, not all Central American nations offer the exact same benefits to investors.
Overall, there are four countries in Central America that stand out to investors: Panama, Costa Rica, Nicaragua, and Belize. While each can be a smart place for investors to explore, it is worth learning more about them before making your decision.
Investing in Panama
Ever since the Panama Canal opened in 1914, the nation of Panama has been an incredible destination for investment. An inordinate amount of goods passes through the Panama Canal each year, and the country itself is growing as a cosmopolitan destination for visitors and retirees alike.
To start, the currency of Panama, the Panamanian Balboa, is tied to the U.S. Dollar. In fact, it is possible to spend U.S. Dollars throughout Panama. While that is great news for relative currency stability, it isn’t ideal if you were hoping to diversify your currency holdings in Panama.
The cost of living in Panama is still lower than in the United States, but desirable urban areas like Panama City have become increasingly more expensive in recent years. However, investing in Panama still allows plenty of security and privacy, giving you greater peace of mind about your finances.
One of the areas to be particularly aware of when investing in Panama relates to the government. There is a high turnover within the government, and the structure can change drastically every five years. This means that investors with long-term goals will need to stay ahead of these changes and be aware of how governmental changes can impact their investments in the years to come.
Investing in Costa Rica
Costa Rica has sometimes been called the Silicon Valley of Latin America, so it should not come as a surprise to learn that the country has attracted a number of international tech savvy corporations to its shores. Tourism and technology have overtaken more traditional industries like agriculture, and the entire country is seeing a boom thanks to increased investment over the past two decades.
Investment in Costa Rica is also advantageous because foreigners have the same ownership rights as Costa Rican nationals. Real estate taxes are also quite low in Costa Rica, often coming in at well below one percent, making it easier to own and maintain a second or third home in Costa Rica. To top it all off, foreign residents make up as much as 10 percent of Costa Rica’s population. This is desirable to investors as well as anyone interested in moving to Costa Rica, operating a business in the country, or just for those feeling like they need more stability.
Costa Rica also boasts an incentive law, which allows for a 12-year income tax exemption for many candidates. Combined with their ‘Free Zones’ which are designed to attract foreign businesses, and you have the ideal climate for investing in Costa Rica. It is also important to note that the popularity of Costa Rica over the past few years has increased the cost of living and business overheads.
Investing in Nicaragua
Nicaragua is an interesting investment destination because it is right at a tipping point. A decade ago, investing was still a riskier move, but now Nicaragua is going the way of other Central American destinations like Panama and Costa Rica. The trick is being able to get in on investments now, while they are still affordable, and accepting that some minor risks might still remain.
Foreign investment and infrastructure are rapidly increasing, which is a very positive sign for anyone contemplating investments within Nicaragua. The nation as a whole is experiencing prolonged and consistent growth, and there are laws in place that guarantee foreign investors the same rights as resident investors.
In most cases, investors can also expect a 10-year 100% tax-free exemption on money invested within the nation. This can go a long way in helping you maximize your investments and your profitability. More recently, and in spite of some unrest in the country, free trade agreements make it easier to trade with surrounding nations and with the United States, which can improve the economic state of the country.
Investing in Belize
While it is hard to pick the absolute best Central American country to invest in, Belize is certainly an obvious candidate. The nation is incredibly safe, and it is on an upward trajectory in virtually every sector and every industry. Belize is seeing an increased number of tourists, which in turn increases the number of hotels and vacation rentals that are required. Along with that, the government is able to spend more money on infrastructure, which then increases the value of your real estate investments.
Belize offers a legal system based on English Common Law as well as no language barriers, since English is the official language of business in Belize. The tax climate is also very favorable to foreign investors, allowing you to make a greater profit off your investments.
Belize maintains discretion when it comes to financial matters, and businesses are able to keep their records private if desired. Whether you want to protect your assets or set up trusts for future generations.
It is also worth noting that Belize is a desirable place to live for expats. If you want to live or retire where you invest, Belize offers incredible real estate, an amazing climate, and all the amenities that foreign residents might come to expect.
It is easy to see the appeal of investing in Central America. While many countries can offer great opportunities, Belize stands out as one of the top places to do business, invest, or buy real estate.