Lessons Learned From Real Estate Investing In Nicaragua
I own a whole load of property in Nicaragua. From colonial towns in Granada to ocean-view lots overlooking the Pacific ocean near San Juan del Sur. I must say I’m very pleased with my purchases, but if I could go back in time I may have made a few adjustments. In this article I sent out some of the key lessons that I’ve learned from my real estate investing experience in the hope that others will benefit from it.
When I started investing in Nicaragua I assumed that the market would operate in exactly the same way as it does back home. But while on the surface there may be all sorts of similarities, dig a little deeper and you’ll find some important differences. The most important to get to grips with is the fact that there is no Multiple Listing Service (MLS) or central database that collects together information on the property market. So you can’t expect to walk into the local real estate agent’s office and get access to all the properties that are available for sale. The agent will just be able to give you access to his or her individual listings. Not ideal if you want to see all the properties that are available for sale. Read this article written by a fellow investor for more reflections on operating in the absence of a MLS.
It’s also important to understand that official property statistics are not published. So you won’t be able to find an objective source of information on price movements and market trends for example. The only way to get this information is to do the research yourself. Start a spreadsheet listing asking prices for different properties that you see and triangulate this with information that you pick up from different sources, realizing of course, that some of this will be anecdotal.
On some of my early purchases I didn’t take out title insurance. While I’ve been lucky and not faced many legal issues, some of my investment colleagues have. So in any future real estate purchase that I make in Nicaragua I plan to take out a title insurance policy. This will force my real estate attorney to dig deeply into the title history and in so doing should be able to reveal any issues with the title before the closing.
One thing I did quickly realize was that all property documents are written in Spanish and I needed a bilingual real estate attorney. Luckily I found a great attorney at the outset. But other investors have been less lucky. So I advise all new entrants to spend time finding a bilingual attorney, from well-respected legal firm. It’s important to have objective advice at the time of closing and never to rely only on information from the sellers attorney.
Right now is a great time to seek out opportunities in Nicaragua. Real estate developers and vendors realize that they have to entice the post-crisis real estate investor and they are pulling out all the stops. Do your research, go on lots of property viewings, and you should find some great value opportunities with sharply discounted price tags.
