Posted by: Len | on February 6, 2017
It’s Been Raining – And That’s Good News
December, January and February have historically been dry months in Nicaragua. However, this year these months have seen rain the likes of which no one can remember. It’s over now, but after 5 years of drought the unseasonable rain was welcomed. Lake levels are back up, the aquifer is improving, and agriculture and ranching are less strained.
I Modified The Nica Investments Business Model
I’ve been tardy with my newsletter recently, and I apologize for that. The reason, or maybe you’ll want to call it an excuse, is that I’ve been busy launching a new business model… one that was a gamble, but seems to be working beyond expectations.
As I have mentioned in earlier newsletters and on the Nica Investments website, Law 360 offers foreign investors in tourism infrastructure the most generous incentives in all of Central America. Also important is that President Daniel Ortega has decided it will be tourism, not agriculture, manufacturing or outsource call centers, that lifts his people out of poverty. Therefore tourism is the sector of the economy given the greatest attention by the administration.
Rather than simply advising on tourism opportunities, Nica Investments has step up to the plate and become involved with our clients in tourism related ventures, or gone it alone on others. I’ve kept the core business as it was, consultation relating to real property and business investments, but now take an active role in the acquisitions and management of properties and business that fall within Law 360.
With fellow Canadian, long time business client, friend, and now business partner, Sandra Shimmin, we’ve opened Hotel de Sonrisas, formerly Hotel Casa Caprichio. The hotel operation is developing nicely… but not without hiccups.
Hotel de Sonrisas has an in-house spa that will be doubling as a hands on educational facility to empower women from all over Nicaragua. The purpose is to teach women marketable skills they can apply to their own small business ventures in their home towns. The women will be taught how to give therapeutic massage, manicures and pedicures, facial treatments, and perhaps later we’ll include hairdressing.
The restaurant was opened briefly with an experienced operator, and under a rather unique and fair partnership arrangement. A breach in the contract that was given ample time to be addressed and rectified never was, so at the end of the review period notice to vacate was given. The space is now available and we are considering operating the food and beverage service ourselves. If a trustworthy, experienced restaurateur wanted to take over the virtually turnkey indoor space, and develop the potential of the outside seating area that is already approved but the city, we’ll listen.
A second option became available that was too good not to pursue. Hotel La Calzada is probably one of the most unique boutique hotels in all of Nicaragua, in Granada for sure. With it’s collection of art and collectibles, many people walking though the front doors think they’ve walked into an art gallery dedicated to world famous Granada artist Tony Kulusic. Five years under renovation, the upscale hotel was designed by Mr. Kulusic as well, and is a work of art in itself. No expense was spared to provide guests with the very best stay possible.
The hotel bar is the Hogs Breath Saloon, which is to open this month. When it does, it too will be unique. However, it won’t be open to the general public. Instead, the bar will function as a members only facility, with hotel guests granted temporary membership during their stay. The plan is to open only Thursday through Saturday as a bar with food service. Members though may use the facility any day of the week for business meetings, a family get together, or celebrations of any kind. There will be a minimum and maximum number of people permitted, but members will not find the restriction too difficult to comply with since there’s ample indoor and outdoor seating.
More Opportunities Seem To Rain Down
It would appear Nica Investments’ new business model has caught on. A number of hotel, hostel and people with properties ideal for tourism activities, or existing tourist related ventures, have approach us to discuss areas of cooperation.
Our team is small. So unfortunately, not every opportunity presented can be pursued, even though all warrant serious consideration. We’re trying to include more team members, but totally trustworthy people with the necessary skills, experience and abilities are few and far between. Plus no one is invited on board without making a commitment they’re contractually bound to.
At the moment there are three opportunities, one a hostel, another a tourist attraction/activity, and the third an excellent long stay vacation rental property are under consideration. All have huge potential. However, like all tourism related businesses, they’re hands on operations. The simple fact is, without trusted extra hands these opportunities remain “under consideration” until there is an expansion in personnel.
The point of basing this current newsletter on what appears to be self promotion is to give notice to potential clients that Nica Investments not only advises on investment opportunities in Nicaragua, but actually follows through ourselves. If you’re a hotelier, restaurateur, tour operator or experienced event planner looking to resettle in Paradise contact Nica Investments. It is very likely we have a perfect match for you to become involved in.
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Posted by: Len | on December 23, 2016
North Americans, Europeans and a great many others are taught that ownership of real estate is one of the best ways to grow wealth. The rise in real estate value adds to one’s personal net worth. It also provides tax benefits that can be used to shield other sources of income.
However, in markets were rents are low and property values are high, such as they are in some Nicaragua real estate markets, purchasing a property may not be the most financially prudent approach. This is especially the case in commercial applications. Why invest hundreds of thousands of dollars to purchase a building when you can rent the same property for a few hundred dollars a month? True, there is no depreciation of the structure to offset profits, but the rent paid is a business expense and the cash saved by not having to purchase the property can be working for you elsewhere.
Why is this so? To understand why a building with a price tag in the hundreds of thousands to millions, such as a hotel property, can be rented for just a few hundred dollars a month, a few thousand at most, you need to understand the Nicaraguan mentality towards real estate investment.
Most Nicaraguans do not trust banks, and with just reason. Recent Nicaragua history is littered with instances of bank failures. Plus there are few trusted investment opportunities. So to safeguard inheritances and money earned, Nicaraguans will hold onto real estate they inherit and purchase real property whenever they can. The average Nicaraguan with land holdings is not a sophisticated investor and doesn’t need to be for a property to serve its purpose… safeguarding his or her money.
This mentality means that appreciation and even rental income is of secondary concern. In many cases Nicas will purchase acres of raw land for cash and make nothing at all from it. They’re happy knowing they have land that will never be worth nothing, as many bank savings turned out to be. Imagine being someone who inherited a property that was sold and the money banked or all of your savings was deposited in the bank, only to find you were left with nothing when the bank failed. Now you can appreciate the Nica mindset.
So it’s possible to find a property for farming, manufacturing or to use as a hotel, B&B, restaurant or retail outlet for very little per month. Offer the owner of a locked up colonial house, warehouse, commercial building or land a set amount for 5 to 10 years and in all likelihood they’ll agree to rent it to you.
The property owner continues to safeguard his or her savings and the tenant gets a property at an affordable monthly rental amount. In all likelihood the property will require some leasehold improvements, in which case the owner gets improvements made to his or her property. Plus he or she knows the property is being maintained. On the tenants end, he or she can write off leasehold improvements and the cost of maintaining the property as business expenses. It’s a win win…
To learn more about rental opportunities in Nicaragua, contact Nica Investments.
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Posted by: Len | on December 7, 2016
The Deal Of The Week
SORRY, BUT THIS PROPERTY IS NO LONGER AVAILABLE
The inventory of affordable homes in downtown Granada, Nicaragua is growing smaller by the day. It is not so much that affordable homes are being bought up… although that is certainly part of it.
The reality is that owners of affordable houses in Granada know prices are on the rise so they are unwilling to sell their property now for a low price. Most can and will wait until prices go up. Occasionally there are deals though, and this is one of them…
This two bedroom, three bathroom home has an indoor swimming pool and large kitchen. The massive master bedroom with en suite is on the second floor. The second bedroom, that could also be a den or office, has its own private bathroom as well. There’s a third bathroom for guests.
The home has been recently renovated. In fact, the fridge and gas stove are still shrouded in the protected plastic they were wrapped in at the factory, and the washing machine is still in the box it was delivered in.
The home is located on the north side of Calle La Calzada, just a few blocks from Central Park and Granada’s nightlife and tourist area.
If purchased as a revenue property, or a vacation home that would be rented out when not required by the owner, the property would easily rent for US$500 plus utilities.
The owner is asking US$149,500.00 for the property. Title is clear and there are no encumbrances to interfere with the transfer of the property. The vendor is not prepared to provide purchase financing but financing is available. To learn more, contact Nica Investments.
To learn more contact Nica Investments
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Posted by: Len | on November 13, 2016
Clarification Of What I Do
It’s important that subscribers to my newsletter, and prospective clients in general, understand what services I provide and which I do not. Likewise it’s important clients understand how I’m compensated, and by whom.
I’M NOT A REAL ESTATE BROKER/AGENT… I’ve explained in articles and an earlier newsletter that not only am I not a “real estate agent or broker”, but that such a person a North American or European would understand he term to describe doesn’t exist in Nicaragua. If you want to know about the unique differences in real estate laws that govern the industry in Nicaragua I welcome your inquiries.
What I am is a consultant. I advise clients and often act on their behalf to assist with the purchase or sale of a property or business, coordinate land use changes, oversee developments, or negotiate leases, either for the leasee or leasor. It would take far to long to cover the myriad of tasks, duties and functions I carry out in the interest on my clients, and that’s not the point… What is the point is that I represent a client and assist that client in accomplishing defined goals or completing specific tasks.
I work on a per Diem, meaning I’m paid by the day. My fee is US$100 per day. This may sound expensive but like a good accountant, my services save clients far more than my services cost. I require a US$700 retainer that is applied to the first week billing. The initial consultation is free of course, and once I know what a client’s needs are, I can accurately quote what a specific undertaking will cost a client.
A Cheap Bed & Breakfast Opportunity
I was recently approached to find a leasee for a small hotel in the center of Granada. The property has been closed for quite some time but has been well maintained and is in remarkably good condition, clean and able to be reopened reasonably quickly.
It would not be the best use to operate a hotel at this location however, even though it is still licensed as such. What this property is ideal for is a Bed & Breakfast.
Operating as a B&B the property would have 5 rooms with private bathrooms, each with both street and courtyard access. The operator would have the option of having an upper floor two bedroom suite to live in, or create a sixth room and live in a one bedroom apartment.
The building is for sale but can be leased for US$1500 a month for 5 years. The owner is open to offering the tenant an option to purchase the property during the term of the lease. Currently the asking price is US$250,000. A tenant would be required to pay the first and last month rent up front, and a security deposit of US$1500. Thus the buy in is US$4500.
What makes this opportunity even more attractive is that I have a hotelier client willing to work with whichever client leases the space. My existing client has a small boutique hotel close by and often requires additional rooms to accommodate group bookings. The exact details of such an arrangement would have to be negotiated, but the opportunity exists.
Although this property is not advertised, I’m sure I am not the only person who has been approached to find a tenant or buyer. November is the start of the busy tourist season in Granada, so anyone seeking a tourism based business will be motivated to act quickly, so it is reasonable to assume this opportunity will not remain available for long.
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Posted by: Len | on November 7, 2016
Neither of the investment opportunities mentioned are still available. There are others though, so contact Nica Investments.
Good & Bad News…
First the bad news. The Joint Venture opportunity featured in the earlier newsletter entitled Joint Venture Development Opportunity In Nicaragua as been sold.
The good news is that a very similar opportunity is available on the property next door. It has lake frontage of about 65 feet, perfect for a private moorage jetty. The total land area is about 2 manzanas (3.4 acres) of land. The seller is asking US$150,000 but will consider a joint venture arrangement.
I will feature this property in an upcoming newsletter. I need to research the title, take some photos and do a bit of due diligence. Being lakefront I have to determine that there will be no problem building on the property. Stand by because this could be an excellent opportunity.
A Pre-Sell Condo Bargain
Barrio Otra Banda in the city of Granada is quickly becoming gentrified. Homes are being renovated and new dwellings are being built. A new hotel was recently constructed and has already opened for business, and just down the street for this new hotel, vacation/retirement condos are being built.
The condominium development is offering presell bargains to smart investors who get in early. I know what you’re thinking… “Another attempt to get future buyers to pay for the construction of a condominium complex that may never be built.” Nothing could be further from the truth.
Investors wanting to lock in a below market purchase price on a one or two bedroom condo need only pay a small percentage down to reserve a unit and lock in the pre-sell price. At the moment 5% of the purchase amount will reserve one of the limited number of one and two bedroom condos.
Below is a rough rendering of the proposed development. These condos, located close to the city center, are ideal for use as personal residences, vacation rental properties, or both. Already retail mortgages are in place to facilitate purchasers requiring financing to complete purchases. To learn more about this property contact us for an information package.
Shortly after this newsletter was sent, I received an inquiry for more information, price, size, number of bathrooms and so on. Later the subscriber asked if a single purchaser would be able to tie up more than one condo unit at the presell prices. I hadn’t had an opportunity to discuss it with the developer, but felt comfortable stating there would be no problem.
Knowing the particular subscriber as well as I do, I believe he may be intending to buy multiple units at the discounted rate to rent out while he attempts to resell them for a profit. This was not something I saw as a potential business model, but looking at comparable condominiums in Granada, it’s an entirely plausible business plan.
To learn more about this investment opportunity or others contact Nica Investments.
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Posted by: Len | on October 30, 2016
With the season upon us when the most Nicaraguan real estate changes hands, I thought this would be a timely newsletter.
If you’ve been scouring the Internet for deals on Nicaraguan real estate, stop wasting your time. I say this to almost every client, and have to say it over and over again to potential new clients… You must not only come to Nicaragua, but be prepared to spend a couple of weeks here to learn about the market, view properties that fit your budget, familiarize yourself with the different market areas, and learn about the processes involved in purchasing a property and transferring ownership.
That said, there are people I know who have purchased property sight unseen. Amazingly, a lucky few have only minimal complaints, but none are completely satisfied. Plan and simple… Invest your time before you invest your money!!!
A real life case study
I was recently contacted by clients, a couple from the USA who have been subscribers to my newsletter for some time. They’ve been shopping for a potential retirement home for almost four years. I was surprised to learn that the last time they were in Nicaragua was four years earlier, and that all of their subsequent home searching was conducted online.
They emailed to ask me, “Why have house prices doubled?”
I explained that real property values were going up nationally by about 10% per year, more in some specific geographical areas, but less in others. This is a healthy equity gain, but not the doubling in prices the client’s suggested they were seeing. When they sent me some links to homes that were twice what they were before, I realized what the problem was. I’m not going to include the links because I don’t know for sure the prices had actually doubled. I also don’t know without doing research if there were improvements made to the properties to justify the price increase. Likewise, there may be market factors at play that would make price increases entirely justified.
However, there were a few properties listed that I’ve had occasion to investigate for clients and they are now grossly inflated. I pointed these out to my client and explained that I knew for a fact the owners would take significantly less. In one case 40% less. Of course these prices were net to the seller. I did my best to explain that the amounts advertised includes a profit for the realtor, and no doubt some added negotiation room.
These clients are Americans, used to a set asking price and the seller would pay the sales commission from the proceeds of the sale. I explained that may be what they’re used to, but it is not how it works in Nicaragua. I suggested this difference in real estate rules and regulations is why they should retain my services.
The Unique Nicaragua Real Estate Industry
The rumors everyone seems to have heard are true, there are a lot of unsavory characters presenting themselves as “real estate agents” in Nicaragua. However, there are also a lot of reputable people acting as middleman for people selling properties. And just to be clear, that is what all “real estate agents” in Nicaragua are, middlemen.
There is no government agency, nor self governing body that enforces ethics within the industry, sets standards, or hears and then rules on complaints. In fact, there is nothing foreigners assume is in place to protect buyers other than if fraud is committed. Then there is a good chance someone will go to jail or be heavily fined.
To be clear… there is no special training or licensing needed to be a “real estate agent”. Only a business license is required. Likewise, there is no government or real estate industry body such as a real estate board dedicated to monitoring the conduct of agents/brokers, registering listings, tracking sales, arbitrating disputes, etc. There’s also nothing like a Multiple Listing Service (MLS) to facilitate doing comparable on asking prices.
Investors Need An Independent Consultant
Novice and even experienced real estate investors tend to get themselves into trouble by assuming they know what they’re doing. Back home they probably do. In Nicaragua the game is played using local rules. Sadly, half of the folks who come to me do so to rectify transactions that have gone bad. I do not like this type of business but take it on because I want to help, if I can.
What I prefer to do is walk clients through the entire process from the very beginning to assure it is done correctly…
What I do is meet with the purchaser to determine the budget and needs. I then source prospective properties I have research thoroughly. If the property’s title, survey, taxes, and ownership are in order, I make an offer and handle negotiations. If an agreement is reached, I oversee the closing, proper transfer of the title and registering it in the new owner’s name.
Some prospective clients balk at letting me serve them because I work on a per diem. I provide a service, and do not work on commission. My services will not only save them money, but most probably avoid wasting a lot of time too. But it is that hurdle of the buyer having to retain a representative that is hard to swallow. Unfortunately I can not afford to work for free, and in Nicaragua there is no legal grounds to collect a commission is the seller does not want to pay.
However, it is actually less expensive paying a per Diem than it is to pay a built in commission anyway. I invoice for days spent on a transaction, which is often no more than 10 days to two weeks. The actual closing may take two to three months, but most of that time is spent waiting on one government office or another to process documents, or lawyers to prepared, exchange and review documents. My billing is for days spent on a client’s file. So if a transaction that takes 3 months to close requires 14 day of my time, the amount billed is US$1400.00. I can guarantee that amount will pale in comparison to the savings I realize for clients. On a home with an asking price of US$60,000 I will likely negotiate a purchase of US$50,000. If the selling commission were just 5%, that would be US$2500.00.
If you want to learn more about my services, or are in need of advice regarding an ongoing purchase, feel free to contact me. Better still, let’s get together here in Nicaragua and find you a building lot, home, condominium or farm. I would be my pleasure to arrange your flight and accommodations, airport pick up and drop off, some interesting activities to fill free time, even a rental car if you desire one.
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Posted by: Len | on October 23, 2016
Joint Ventures are not common in Nicaragua and those that do launch are usually through agreements between foreigners. That said, there are some clever local Nica landowners who see the financial advantages of working with developers. I know of a few such situations, but I recently came across a very exciting opportunity.
I was asked to view a property on Lake Nicaragua, on the Granada shore. It’s 2.8 Manzanas (4.844 acres), or for the metric folks like myself, 19,772.5 square meters. Lake frontage is approximately 40 meters. Depth is 200+ meters.
The only development on the property is an attractive stone and concrete jetty, sea wall, boat launch ramp, and a small building where outboard boat motors are serviced, maintained and repaired.
The title is clear, and the seller is the sole owner on title.Most of the nearby properties are owned by foreigners. The attraction is the closeness to Granada, while being tucked away in a quite, forested bay looking out upon the Granada Isletas. The isletas are a collection of 365 small islands formed long ago when Mombacho volcano blew its top.
What makes this property most exciting though is the open mindedness of the seller. He’s willing to sell the property outright of course. However, he’ll also consider working with a developer to subdivide the land and construct individual homes, condominiums or rental units.
Personally, I would go for a joint venture development arrangement. The owner will want US$200,000 to compensate himself for waiting to receive his sales proceeds. My initial take would be to subdivide the land into eight large (2000+ square meter lots) and build individual homes on each. Of course the lots can be made smaller to increase the number of lots and potential profit. But my gut tells me buyers interested in property at this location are looking for a private, green sanctuary, and that will require a decent sized lot.
Both construction and pre-approved, retail mortgage funding is available through local lending institutions.
It is a rare opportunity in Nicaragua, a cash society, to find a vendor willing to work with a purchaser to the financial benefit of both. For this reason alone this opportunity will not last long.
If you miss this property, there are other joint venture opportunities available throughout Nicaragua. Many are much larger though. This one is a nice size and allows for a decent profit to be made on both the sale of lots and/or the sale of completed homes.
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Posted by: Len | on October 11, 2016
The rainy season lasts from May to October, and the wettest months are September and October. Of course there has been a drought in Nicaragua for 5 years, so the “wet season”, as the locals call it, has not been very wet at all. This year though the rain has been better, with a torrential downpour occurring usually once each day. I can rain for a few minutes or over and hour, then stops. This is much needed to bring lake and river levels back up to their norm, and replenish the aquifer.
Next month, November, will see tourists trickling in, with the peak season crowds pretty much filling up hotels, hostels, guest houses and bed and breakfasts. With the incentives available to foreign investors in tourism, courtesy of the Nicaraguan government, anytime is a good time to invest in Nicaragua’s tourist infrastructure. However, now is the ideal time to purchase any tourism related property or business because business will literally be banging on your door from day one.
Law 360 is the law that envelopes the advantages and incentives available to foreigners making an investment in the tourism industry. View the English version of Law 360 here.
Nica Investments’ participation in the perks available to foreign investment in tourism thus far is restricted to an application for subsidy of the electricity costs of Hotel de Sonrisas. However, we will be applying for tax credits and a grant for upgrading plumbing. We wish to install more efficient toilets and showers to cut down on both the expense and to minimize water use. We are also connecting to the newly installed sewage system. Possession of the hotel property was July 1, 2016. Assembling the necessary permissions, certifications and licenses, revamping the property, converting an empty space to a restaurant and another to operate as a spa took until the end of September. Now that the hotel is open and fully operational there’s lots to do in the way of securing the perks the operation is entitled to.
Whether investment capabilities are large or small, the Nicaragua tourism industry offers something for everyone. Please note though, if your intention is to relocate to Nicaragua and become a resident, investor status residency requires a minimum investment of US$30,000.00 at this time.
Some of the properties and business opportunities available right now are…
An ideally located, 13 room hotel in Granada that can be purchased, renovated, refurbished and equipped for under US$200,000. This is a perfect operation for either an experienced hotelier or for novices wanting a mom and pop operation.
There are a number of hotels and hostels on Ometepe that are for sale. Some are businesses operating in leased properties, usually offered for sale turnkey. Others are land, chattels and business. Ometepe is a must see on most tourists’ Nicaragua itineraries. However, the number of accommodation operations is more than adequate to meet the demand. This means rates are low, so earning potential is limited. That said, if your goal is to enjoy a rent free existence with a little income to supplement a pension, there are a number of perfect opportunities on Ometepe.
San Juan del Sur is a hot market for tourism related business investments but the market demographics limit the return. San Juan del Sur is a beach community on the southern Pacific coast of Nicaragua. It is a Mecca for surfers and backpackers who generally stay in hostels or other cheap accommodations.
Ironically, there are a number of surf shops within the city but the waves in the bay are not much good for surfing. Each day surfers hop on shuttles that take them to the surrounding beaches where the waves are better. The two most popular beaches are, Playa Maderas to the north and to the south, Playa Remanso and Playa Hermosa. Thus the town of San Juan del Sur can be almost deserted during the day, even though the hotels and hostels are full. At night though, the surfers are back and San Juan del Sur lives up to its reputation as Nicaragua’s Party Central.
The demographics of the tourists visiting San Juan del Sur means that the wiser investments are at the low end of the tourist accommodation spectrum, hostels, cheap hotels or affordable vacation apartments and houses. Restaurants and bars too are a wise investment, especially those on the beach.
No matter if your interest is in making a large or small investment in real estate or a business in Nicaragua, retain the services of a competent lawyer and get good market advice. Nica Investments will be happy to assist you with your acquisition and we can recommend a few competent, reputable lawyers… Contact us.
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Posted by: Len | on October 4, 2016
Dispelling a myth.
The US government’s travel advisory is cautioning Americans that travel to Nicaragua at this time may be risky. The reason given is that emotions during the upcoming national election may lead to some sort of backlash against foreigners, particularly Americans. What a load of crap!
It seems someone in the USA State Department has confused the Nicaragua national elections in November with that of the USA. I can assure everyone that most Nicaraguans don’t become hostile over an election here as the world sees voters in the USA becoming. Daniel Ortega will win the election and the consistency in governance is good for the country, generally speaking.
That’s all I have to say on that subject.
Will The Canal Be Built?
I am asked about the future of The Nicaraguan Canal, formally the Nicaraguan Canal and Development Project, a few times a month. I know there is a lot of misinformation out there, mostly originating from Panama, the USA, and other sources with special interests. These information sources suggest a canal will not be built. This too is a load of crap!
Since the canal project was proposed China’s economy has taken a hit. Wang Jing, the Chinese businessman and force behind the canal, lost and estimated 85% of his net worth during the 2015-16 Chinese stock market downturn. However, both Russia and Iran are rumored to be in discussions about investing in the canal project. Which countries or individuals are involved in the construction of a new canal is irrelevant. What is important for investors to know is that the canal will be built… eventually.
Forget all of the negative spin and outright misinformation. The fact is that The Nicaragua Canal HAS to be built. The Panama Canal was widened to extend it’s lifespan, but it will become obsolete within a decade or two. Logistics demands that another inter-ocean waterway be constructed that is wider and deeper than even the revamped Panama Canal. The next generation of super tanker, container and ore carrying ships, and even super cruise liners, are going to be wider, have deeper keels, and be longer than the Panama Canal will allow. This is the simple reality, and no amount of spin is going to change this fact.
The Deal Of The Day!
There are a number of properties being offered for sale around the Laguna de Apoyo crater. Some are rim properties, while others are inside the crater. Some properties are already developed, some land is used for agriculture, and the rest is undeveloped.
Laguna de Apoyo is a water reserve and recent laws have limited what can be done with land inside the crater. Basically, unless a property has an existing foundation it can not be built upon, period. Existing landowners are not pleased with this turn of events of course, and many are trying to sell their property. I assume they’re hoping to find someone who wants a piece of land they can pitch a tent on. Then again, maybe a seller is looking for a sucker who does not do their due diligence and will buy the property, only to find out later they can not build anything.
There are a number of existing homes, abandoned homesteads with derelict structures, and already subdivided land with lots that can be developed or expanded. There are also a few rim properties that can be developed because they are outside the restriction zone. Of these rim properties, some titles extend down the slope of the crater walls and along the shore. Only the rim portion of such parcels can actually be developed.
One choice piece of property is detailed here. It is a parcel of land approximately 35 acres in total with a clear title. There is water and electricity available and the road to the property, although not maintained well, is an official roadway. The price and terms are negotiable. In fact, the property can be purchased for the cost of a couple of existing rim lots, or for less than any of the American standard houses for sale around Laguna de Apoyo.
It is a bit of a challenging hike down to the lake-shore, but the shore can be reached by car as well. However, for someone wanting a one of a kind view, this rim property has spectacular views for 360 degrees. These views include Mombacho volcano, the crater lake of course, Lake Nicaragua in the distance, mountain vistas, and the cities of Catarina and Granada. There is not a single potential building site within the 35 acres that doesn’t provide a breathtaking view. The elevation and constant breeze cools the temperature, keeping it in the mid 20s Celsius.
For photos and more information check out: Laguna de Apoyo Rim Property
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Posted by: Len | on September 25, 2016
Over the past couple of months I’ve met a number of foreigners looking for property in Nicaragua who voiced their disappointment that the properties they looked at were not discounted much. Their assumption was that with Nicaragua’s real estate market not as robust as it once was, there would be bargains aplenty.
The market is down for sure, but prices don’t reflect this. Here’s why…
Most of the large tracts of land and many developed properties in Nicaragua are owned by wealthy Nicaraguans who are used to having to wait to sell a property. Potential sellers acknowledge that the market is down, but they’re unwilling to discount prices, choosing to wait out market downturns. That said, there are always owners who have to sell quickly and will sell at discounted prices. The trick is to find these motivated sellers.
Another factor contributing to making the Nicaragua real estate market appear overpriced is that what’s advertised for sale is not necessarily for sale. Often owners will offer their property for sale at a price that’s too high to be taken seriously by anyone knowledgeable. I assume these sellers are hoping a sucker will come along and overpay. Unfortunately it happens often enough for property owners to keep putting overpriced real estate on the market.
Peculiarities of the Nicaraguan real estate market.
Those properties that are reasonably price are not necessarily going to be sold by the seller for the price suggested. Sellers will ask for a reasonable amount but then refuse to accept it if someone actually wants to buy their property. I’ve experienced this myself and it’s annoying. The assumption on the part of these “sellers” is that if someone is willing to pay the price they are asking, then they’re not asking enough. These “sellers” are a waste of time.
The solution to time wasters is to have the word spread that there are buyers if a property can be purchased at a reasonable price. Nica Investments does just that and we’re constantly offered properties someone wants to sell.
Caveat Emptor (Buyer Beware)
A good 25% of reasonably priced properties are either outright fraud attempts or the properties can not be sold because the titles are too muddy. Once a con artist actually offered me a parcel of land to pitch to clients that included five fairways of a neighboring golf course within the boundaries of the offered parcel. It was news to the owner of the golf course that someone was offering a portion of it for sale.
Another 50+% are priced ridiculously high and nothing but a waste of time to even talk about. I handle these as diplomatically as possible while I show the “seller” the door.
Twenty to twenty-five percent of properties offered for sale are well priced. Unfortunately, half of these have title issues or some other negative factor that makes them impossible to take ownership of. The remaining properties that are well priced, with owners motivated to sell, and clear titles are excellent opportunities. These properties I immediately try to match up with existing clients’ desires. These properties usually sell within a matter of days, sometimes a week or two, so time is of the essence.
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