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Nicaragua’s Coastal Law
Investors in ocean front property in Nicaragua might need a pair of binoculars to see the surf, if the upcoming coastal law ends up reflecting the current property title suspensions.
Since 1937, Presidents, Somoza, Ortega (the Marxist one), Chammora, Aleman, Bolanos and now Ortega again, have all had their land reform agendas that have resulted in a hodgepodge of legal ambiguity. Throw in years of squatter’s rights, and Daniel Ortega was correct to announce that his administration would try and sort out the previous potpourri of property laws and create some definitive and reliable statutes. Statutes that international investors were hoping they could rely on to help build the future of tourism and retirement property in Nicaragua.
In an effort to correct the problem however, the administrations’ actions could be the death knell for investors in Nicaragua.
One of the most important issues that the pending new Coastal Law will establish, is how close to the shore (of any body of water) developers can build.
According to a recent article in the Miami Herald,
“In a series of memorandums sent out earlier this year, Attorney General Hernan Estrada ordered a suspension of all property titles within 2,624 feet of any body of water.”
That’s about 800 meters or half of a mile inland from the shoreline. In contrast, the previous restriction created 30 meters or about 96 feet of public beach.
The problem is that most of the ocean front property that has been sold or is currently on the market occupies land within that half-mile. The vast majority of these holding are owned by U.S. investors and are somewhere in a pre-construction stage. This means that if the Ortega administration so desired, and implemented the current suspension, it could effectively block any construction on beach front property within that distance. And that, has a lot of people worried.
Investors who have bought ocean front property in Nicaragua are cautiously hopeful that the new coastal law will be growth positive and reject any “confiscatory” implications. For now, we’ll just have to wait and see.
Choosing to invest in vacation ocean front property in Nicaragua, Costa Rica, or Mexico presents a staggering variety of opportunities. Vacations are usually synonymous with getting away for a couple of weeks, lounging by a pool or sunbathing on the beach. Investing in a beach front property allows you to enjoy a getaway and still be in your own home. If you invest carefully you benefit when you use your home, and for the rest of the year your getaway property should appreciate in value, and generate rental income. So with this in mind, I’ve created a list of criteria for the Best Vacation Investment Opportunities in Central America and Mexico. These beach front real estate investments are:
- Well established
- Offer Bank Financing
- Rental management
- Walking distance to the beach
- Two bedroom and two bathroom condo or similar
Starting off the list is the Bahia Del Sol located in San Juan Del Sur, Nicaragua. Bahia Del Sol asserts they “take care of everything from construction to furnishings to rental.” With units starting at $176K for a 2bd/2b this development is worth taking a second at.
Seaside Mariana has all the criteria covered and then some. Seaside Mariana is located about an hour from Managua, and the international airport which gives this development easy access once you arrive in Nicaragua.
Gran Pacifica is also located less than an hour away from Managua and the international airport. Gran Pacificas’ web site offers ocean front condos starting at, $134,990 with 50 percent financing available.
So you’re saying, what about investments in Costa Rica, Panama, or Mexico? Well, I submit the best overall long-term investments on ocean front properties considering get-in costs and the potential for appreciation are in Nicaragua. If you know of other developments inside or outside of Nicaragua that can compete with these investment opportunities, I invite you to write a comment and tell us why.
Next Post: Granada vs. Antigua. Perhaps you’re ready to make a bigger commitment and live for an extended period in your new getaway home. If you are considering living away from your primary residence for a few months at a time you might be interested in a location with more culture than waves lapping on the beach.
Surf Turf
If you’re a pro surfer raking in mad prize money or an old school big kahuna, a Nicaraguan ocean front getaway home should be the newest addition to your quiver. Or better yet, how about starting a surf business where you can live on beach front property all year-round. For the price you’ll pay for a two bedroom condo, a mile from your favorite break anywhere in Southern California, you can probably start your own surf-business on the sandy beaches near San Juan Del Sur in Nicaragua. Is that a surfers dream gig - or what?
Growing up in San Diego, California I know how dedicated surfers are to riding waves, and when not riding waves, they’re thinking about riding waves. If you’re a surfer living in the megalopolis from San Diego to Santa Barbara, life has always posed the challenging question - how can I surf as much as I want and still pay the bills? Surfers with some capital might seriously (can one be a surfer and serious?) consider investing in Nicaraguan real estate - ocean front property of course. Just buy a piece of land, build some buildings, rent out rooms, start a blog, and sell burritos and beer. Totally!
Investing San Juan Del Sur
One thing to know is that purchasing property in Nicaragua usually means that you pay cash. So if you have the capital, and think the expat lifestyle is one you could commit to, now is the time to invest. San Juan Del Sur has become more costly in the last few years, but many believe that it’s no where near its investment potential. All around San Juan Del Sur on Nicaragua’s southern pacific coast, small communities are being developed. Lots are available starting around 25K. Check out some properties at Nicaragua Surf Report, a web site that has clearly made a successful business out of surfing in Nicaragua. Beside giving daily reports on the local swells, their web site features local real estate for sale along with lots of other information.
If your thinking about investing in ocean front property, think San Juan Del Sur in Nicaragua. Whether the investment is for a getaway or starting a busines, there is still plenty of opportunity. What are ya waiting for?
Central American investors have been calling Nicaragua the next Costa Rica for the past decade, citing the similar climate and implementation of tax incentives for foreign investors. In a recent report the U.S. News and World Report rated Nicaragua one of the 10 best places to retire. Despite complications from political instability and Daniel Ortega’s reelection, Nicaragua has managed to leverage its natural assets and become a reliable emerging investment for many real estate investors. Nicaragua’s beachfront property is its most heavily coveted real estate, not only for its beauty but also its limited supply.
Accessibility and quality are both factors to consider. The low cost of living has led to many would-be developers on the beachfront scene will little actual development experience. As with beachfront property in many countries, access to water and other infrastructure (i.e. roads, electricity and internet) is still questionable in most oceanfront regions. There are also requirements for timely building in some areas.
The Pacific coast has been the most widely developed up to this point. The Atlantic coast offers a much longer term investment, but is also relatively untapped due to infrastructure and climate concerns (think humidity and mosquitos). Much of the boom has already hit the Pacific coast, snatching up much of the extremely low cost beachfront opportunity that existed a few short years ago.
One development prospect for the Atlantic coast revolves around ecotourism. Because much of the area is untouched rainforest, many regions offer tropical jungles, private white beaches and Amazonian-like river scenes.
One of the biggest hurdles for the development of Nicaragua’s oceanfront property is a lack of reliable and well-maintained transportation. There are no formal highways on the Pacific coast and literally no viable overland transportation from the populated areas of Nicaragua (on the Pacific coast) to the jungles of the Atlantic coast. The government has made the Puerto Cabezas airport, on the Atlantic, an international airport and is working on improving the runway. This is desperately needed as air travel is the only way to quickly access the east coast of Nicaragua.
The Pacific Coast is clearly the oceanfront property that will provide the most opportunity in the next five years. There are already plans for a new Pacific coast highway to reach from the coast nearest Managua south to Costa Rica. Once this highway is in place you can expect a significant increase in property values, as infrastructure access will become more affordable for oceanfront property near the highway.
The most developed oceanfront property resides in San Juan del Sur. It’s proximity to Costa Rica and it’s updated port have made it the center of oceanfront development in Nicaragua. It is still in the early stages of development, but already has multiple large developments underway.
If you are considering purchasing Nicaraguan beachfront property, it would be wise to make a visit to the country. Nicaragua’s title issues are not as wide spread as advertised, but there are real issues with water access and building feasibility. Areas like San Juan del Sur have already been discovered and thus carry a much larger price tag than other ermerging areas. However, these emerging areas also carry risks. It is always a good idea to work with a local attorney. This is not only to protect you legally, but to give you someone on the ground in Nicaragua to navigate local relationships and ensure your property is protected.
