|This coastline looks like California's
about 100 years ago. Today it's about 1/10th the price.
Nicaragua is virtually unknownand usually misunderstoodby
most people, which is why forward-thinking investors can find some
of the best real estate deals on Earth in this country.For the record,
this country is not in the midst of a civil war...and it's not a
Communist state. It has, however, suffered from a serious case of
Because most of the world still believes Nicaragua is a country
full of problems and political unrest, local real estate is extremely
Before I explain exactly why we chose Nicaragua, let me back up
for a minute to put this country into perspective
1/10th the price of California
The first time I stood looking out over the Pacific Ocean on Nicaragua's
western coast, wild horses galloped down the beach. The sun was
shining overhead, glinting off the water as the waves rolled onto
the beach. The air was hot
but a constant breeze made it comfortable.
It was like a scene out of a film
a place it's hard to believe
still exists in our world of tract homes and shore-side resorts
where you battle boom boxes and boardwalks for an eight-foot square
What 's really amazing, though, isn't that a place like this has
remained untouched for so long
it's that right nowtodayyou
can own a piece of it for as little as $39,000. What 's more, you're
only a two-hour flight from Miami.
To give you a point of reference, not too long ago, I was in California
to visit a friend and drove along the Pacific Coast Highway.
The shoreline in California is hard to resist, with its inlets
and coves, dramatic, rocky drop-offs, and long stretches of sand
and surf. But for a 1-bedroom, 1-bath, cracker-box home in Malibu
you'll pay $244,500. For a larger place4 bedrooms with a gourmet
kitchen and an artist's studioyou'll fork over at least $1.6
Further north, on South Highway 1, in Mendocino, I saw a Victorian
ocean-front house, perched on a bluff top with views to the west
of the Pacific's rugged coastline and east to grazing pasture lands.
This 3-bedroom house, with a deck, was listed at $1.25 million.
A million dollars for a house is a lot of money, no matter where
you are. Yet for less than one-tenth that amount, you can buy a
half acre of dramatic coastline in Nicaraguathat same, dramatic
Pacific coastand build a spectacular home complete with handmade
tiles and mahogany finishings, perched on a secluded shore that
looks like California's did 100 years ago.
Why American beaches are becoming overcrowded
Nicaragua though, is not simply a bargain in comparison to expensive
California. It's much less expensive than any beachfront property
you'll find in the United States. As Americans buy second homes
in record numbers (the National Association of Realtors said second
home sales were up 30% last year), they are driving up the costs
of vacation homes everywhere in the country. A recent USA Today
article stated that 1 in every 7 people in the United States now
lives in a county bordering the coast.
The simple fact is that almost every bit of U.S. coast is becoming
overcrowded and overpriced. Consider these items from the same USA
- In Naples, Florida, recently, during a six-hour "sale"
of condo units averaging $1 million each, 99 people plunked down
$25,000 apiece for apartments that won't be built until at least
- In Folly Beach, South Carolina, quarter-acre lots that sold
for $50,000 10 years ago now fetch as much as $500,000.
- One contractor in North Carolina reports that he's building
$200,000 homes along that state's Outer Banks faster than ever
How does Nicaraguan beachfront compare with other Central American
countries? Well, for now, Nicaragua costs a fraction of what you'll
pay in neighboring countries.
Consider Costa Rica. In the early 1980s, it was the place
to go for affordable beachfront. Today, in the beachfront community
of Tamarindo, a quarter-acre beachfront lot sells for $150,000.
That same lot in Nicaragua...not 100 miles away on the same stretch
of coast...costs about $45,000.
In Belize, it's the same story. Ten years ago, you could buy a
beachfront lot on one of the islands off the coast here for $35,000.
Now you'll pay $280,000 for a modest home on that same lot. In Nicaragua,
by the way, you'll pay low property taxes. Honduras' Bay Islands
have boomed as well. Just five years ago, these little dollops of
land in the western Caribbean were virtually unknown to anyone but
hard-core divers. Half-acre beachfront lots sold for less than $20,000.
But today, if you can buy a half-acre on the beach for $75,000,
it's a bargain.
Nicaragua makes smart investment sense. Just as the cost of beachfront
property has appreciated in neighboring countries, so too will it
appreciate as this emerging country continues along the road to
You still have time, though, to get in ahead of the crowd. The
country's current prosperity is being fueled mostly by non-American
investment. Most Americans still don't understand that this is now
a safe, stable country.
Why on Earth did we choose this country? Well
believe there are three very good reasons why we decided to invest
1) First, there's very little land like this remaining anywhere
in the world. And dollar for dollar, the best deals in North
American property are on Nicaragua's Pacific Coast.
This gives our property tremendous investment potential. If you
look at buying similar land in Costa Rica, you'll pay about five
times as much money. In Belize and Honduras, you'll pay about three
times as much. We expect similar appreciation in Nicaragua. And,
of course, anything evenly remotely familiar in the United Statesif
you could figure out some way to purchase itwould cost you
15 to 50 times the money. I probably don't have to tell you how
much money you'd be worth today if your grandparents had made a
small investment in California's coastal Pacific property a few
The good news is that prices in Nicaragua are still just starting
to rise. The region is benefiting from the free-market phenomenon
that gave political tranquility to so many other countries after
long periods of turmoil. U.S. News &World Report rated Nicaragua
one of the 10 best places to retire in the magazine's most recent
survey. And things are only getting better (see #2).
2) Nicaragua is in the middle of a boom trend that has seen
millions of dollars in infrastructure improvements and foreign investment.
- The first Hard Rock Live in Central America opened just last
- A Taiwanese group bought the InterContinental Hotel in Managua
and added a shopping mall and another hotel.
- A Guatemalan group invested $8 million in a Princess Hotel.
Another Guatemalan group has taken over the run-down Hotel Camino
Real, completely refurbished it, and added a convention center.
- A New Orleans company just a few weeks ago finalized a deal
with the Nicaragua legislature for the rights to run Puerto Cabezas,
Nicaragua's closest developed port to the U.S. Gulf Coast. The
company will spend more than $100 million on improvements, which
will cut the cost and time for goods to get to Managua, in some
cases by more than half.
The list goes on and on. In short, Nicaragua is on the right track.
As The Wall Street Journal reported just last month
Managua has a skyline. New hotels and shopping centers--with elevators,
and even escalators--have sprouted in a capital flattened by a 1972
earthquake and laid low by failed socialism. Arco gas stations,
Pizza Huts and McDonald's golden arches rise from the gentle hills.
Once a live-fire franchise of the Cold War, Nicaragua and other
Central American countries have embraced franchise capitalism."
The paper continued: "U.S. companies arrive to build power
plants and telephone networks, to sell hamburgers and pizza. Foreign
investors who were fleeing the country a decade ago put $280 million
into Nicaragua last year."
The country's tourism business is taking off too. Cruise ships
are regularly docking at San Juan del Sur. And the country has opened
its first-ever tourist office in the United States, on the streets
of downtown Miami. The office will operate a toll-free number for
the U.S. and Canada
with a goal of attracting 500,000 tourists
to Nicaragua by year's end.
This development is good news for us as fellow Nicaraguan investors.
To give you an idea of just how far this country has come, from
1979 to 1989, according to World Bank statistics, Nicaragua's GDP
shrunk by an average of 1% per year. From 1989 to 1999, GDP averaged
2.8% growth. In 1999 alone, the GDP grew 7%
and it's expected
to grow by an average of 6.2% over the next two years. As the country's
Vice President recently told Newsweek magazine: "Fewer than
15 countries in the world have achieved 6% growth in a year."
3) We want to take advantage of the growing trend taking
shape in the United States and in other developed countries. That
is, people's desire to invest, live, vacation, or even retire outside
of their home countries.
People are starting to relocate on a global scale. One article
in The International Herald Tribune stated that, in the past
30 years, the number of Americans living abroad has more than quadrupled.
In fact, according to the U.S. State Department, it has risen from
2.3 million to 3.3 million just since 1990.
This movement is expected to increase exponentially. To profit
from it, you need to look for real estate markets that will capitalize
on the direction the world is starting to move.
Overseas retirement real estate is going to be big business in
the coming years. As the first of the 76-million, baby-boom generation
turns 55 this year, more people are going to look outside of the
United States for real estate, second homes, and retirement homes.
They will come looking for places like Bahia Azul for privacy,
safety, warm weather, and a relaxed and sometimes adventurous lifestyle.
Did you know that Baby Boomers make up almost a third of the U.S.
population? And they are aging fast. Beginning in 2000, boomers
started turning 50 at the rate of just under 10,000 a day. Already,
more than 14 million boomers are 50 and up, and some aren't waiting
until 55 to take early retirement. It's a well-educated crowd: Nearly
90 percent of boomers graduated from high school, and more than
a quarter have at least a bachelor's degree. More than three quarters
own homes, and 73 percent have some form of investments.
As Time Magazine recently reported: "Many of the 76
million American boomers are more likely than their parents to consider
retiring to a foreign land, because they have traveled more, have
higher hopes for retirement, and tend to be more active and adventuresome."
Think about it this way
more than three million U.S. citizens
have already moved abroad, looking for cheap real estate, low taxes,
and better qualities of living. This trend will only increase in
the years to come.
4) Nicaragua offers advantages few other places can match.
The cost of living, for example, is a fraction of what you're accustomed
to back home. You can employ a full-time maid here for about $100
per month. You can see a movie for $2...and get your hair cut for
$1.25. Two people can have an excellent meal, including a good bottle
of wine, for less than $20.
Plus, the tax burden is very light. And as a foreigner qualifying
for Nicaragua's Pensionado program, you may be exempt from import
duties on your personal and household goods; and be allowed to bring
a vehicle into the country tax-free once every five years.
And if you are looking to start a business, few places offer better
incentives than Nicaragua, which recently passed tourism Law 306.
This law allows you open a tourism-related business and 1) pay no
taxes for 10 years 2) bring in (or buy locally) all the supplies
you need, from furniture and boats to linens and cash registers
and the world's only freshwater sharks
These are the primary reasons we have invested in Nicaragua. The
numbers and the trends are just too good to pass up. But these facts
and numbers don't begin to tell the story of the laid-back atmosphere
and natural beauty of Nicaragua.
Nicaragua is an exotic land
where the sun shines all day long
rugged and tropical rivers, colonial cities, friendly and lively
people, and the largest body of fresh water south of the Great Lakes
(with the world's only freshwater sharks).
As the publisher of a newsletter that investigates the world's
best places to travel, buy real estate, invest, live, and retire,
I know that the opportunity to get in on the ground floor of a place
like Nicaragua does not come along very often.
Nicaragua has undergone tremendous change. A forty year military dictatorship was upset by a peoples’ revolution. Thirteen years ago the government held elections and the country embarked on a new course.
The administration of Violeta Barrios Chamorro led the country through the difficult transition from a one party state to majority rule in a new Democratic Republic. New laws were passed and the painful process of building a free nation began. Relations with international financial institutions were forged, old loans were renegotiated, and major investments in the nation’s infrastructure were obtained. Multi-Nationals such as Holiday Inn, Intercontinental Hotels, Princess Hotels, Coca-Cola, General Motors, Toyota, Ford, Mercedes Benz, Mitsibushi , Chrysler, TGIF Fridays, Benetton, Radio Shack, Pepsi, MacDonalds, and many others have moved in.
Elections were again held in 1996 , during the administration of Ms. Chamorro. Arnoldo Aleman was elected in what independent international observers noted was a clean and fair election. Incentive programs such as the Law 306 Tourism Investment program were implemented to further encourage investors. More than 100 schools were built and re-built, and further International Finance agreements were negotiated.
In 2001, the third Democratic Free election was held and Enrique Bolaños, a personally successful free enterpriser , was elected under the Liberal banner. Mr. Bolaños immediately has gone to work to enhance the incentive progams and has in a short few months attracted millions of dollars in investments and projects that are now underway .
Today we experiencing unprecedented major growth in the economy without the unwanted concurrent expansion of the public sector. Continued proper management of the national debt will free tax revenue for the improvements to the infrastructure.
Foreign investment has increased and shows signs of more rapid growth. Unemployment is falling steadily. The standard of living is improving. Construction is rampant, particularly in the Managua area where business is being centered. Resort projects in the 100’s of Millions of dollars have been announced, many of them in the San Juan del Sur area, the prime resort destination in Nicaragua. Spec houses are being built again and are selling prior to completion. Prices are rising at a fast rate. Builders are enjoying good profit margins. Jobs are being created.
of the past ten years of new government include:
elections followed by orderly transfers of power to opposition
The army was returned to civilian control, and its’
size reduced from 70,000 to 12,500;
Inflation fell from 30,000% to single digits during this period;
high GDP growth, and now the second lowest inflation
rate in Central America at under 10%.
GNP and economic growth projections ( as a percentage ) are
the highest in Central America;
International Banking accords and free trade agreement
with Mexico have been reached; NAFTA and MERCOSUR
Geographically , Nicaragua is only 3 hours by air from
Miami and Houston , is in the heart of Central America,
and is exposed to both major Oceans, the Pacific and the Atlantic.
Most land reform issues have been resolved through the
legal process and without conflict;
may own land without Nicaraguan partners.
Investors may repatriate 100% of their profits and
may repatriate their initial investment after three
collection is up; but is so low, it is almost a non-issue
in financial considerations.
Average labor cost approx. U.S. $ .70 per hour.,
including social benefit programs
An extremely young population , over 50% of the population
A greatly improved Education system, made up of local and
international universities, literacy rate of over 85%.
A great interest in the learning of English as a second
language, and many professionals are proficient in Portuguese,
Russian , French and Italian.
Police Force is being trained and modernized by international
aid programs; Crime statistics are down in all major
electing the first female President in all of the Americas,
Nicaragua revels in the increasing roles and responsibilities
The government recognizes the benefits
of tourist dollars and is heavily promoting tourism
, especially in the south west coast areas.
The Cruise Ship industry has discovered San Juan del
Sur, since January 2000, and in 2003 , over 50,000
passengers are expected to come through the port.
spin-off in subsequent years from return visits by these
short term visitors will be significant
prices will escalate beyond comprehension as they always
do in cruise ports
political announcements including a new Dry Land Canal
from the Atlantic to the Pacific and a new Pacific Highway
are huge developments in the economic future. The opening
and widening of the Rio San Juan into Lake Nicaragua,
has also recently been announced.
( Nicaragua has some of the best roads in Central America
), communications, potable water, electricity,
and related infrastructure have undergone substantial improvements;
new blacktop is evident in
areas of the country.
previous citizens who left the country during harder
times are now returning with new educations and methods
and are seeking out the investment opportunities and the