Here are some strategies for successful real estate investing in Nicaragua. The advice holds true whether you are looking for a quick capital return or a lifestyle purchase and takes into account how the market operates on the ground.
1) In order to get a good handle on market value you’re going to have to see a lot of property. Build a spreadsheet noting down the asking price of everything you see. Yes it’s true that asking prices are just “starting prices” but in a world were reliable data is scarce, it’s the only a good place to start. Unfortunately you just can’t get the kind of data considered standard in more mature markets.
2) The only way you will be confident that you are seeing all there is for sale in the Nicaragua real estate marketplace is to book property viewings with every agent who has an active presence in your target market.
3) Triangulate the information you receive from as many sources as you can. There are few truly independent sources of information in the country, and no official property statistics, so cast your new widely. Read the local newspapers (Spanish) and follow English Nicaragua news sources. Try to keep abreast with tourism numbers and where infrastructure development is planned.
4) Only buy what you can actually see and touch. Concentrate on real, tangible value only. Ignore those glossy renderings of the new clubhouse or the golf course. Assume that the road won’t ever be paved and that new airport the developer keeps mentioning will never be build. Then ask yourself whether you still like the property and only close on the deal if the answer is “yes.”
5) Never use the sellers attorney for the closing process. It is vital that you hire an independent attorney to represent your interests. Remember that in Nicaragua the closing documents and title deeds will be in Spanish to unless you have a perfect grasp of legal Spanish, ensure your attorney is bi-lingual.
6) Some seller expect to receive a deposit to ‘reserve’ the property while you do your due diligence. This is a bad idea. Escrow the deposit with your real estate agent, an escrow firm or with your lawyer.
7) Always take out title insurance on your property purchase. The process of applying for a policy will ensure that your lawyer follows a rigorous due diligence procedure and digs deeply into the title history.
Keep your emotions in check. Too many investors seem to catch a virulent strain of “land fever.” This together with the common “sunshine syndrome” mean that emotions rule all decision making. Big mistake. Ensure you use your head as well as your heart and if possible let data and rigorous analysis drive your investment strategy rather than getting carried away with how the place makes you “feel.”
Samuel Chally former sales agent with Coldwell Banker Nicaragua real estate tells us about the last property he sold in Nicaragua. And he tells us why it sold.
Do you ever wonder how you know the title to your land is yours unequivocally? Real estate scams have come up in recent news stories, like the one where a homeowner sold his house to two separate people within the span of just a few days. Ultimately, only one person has the authentic, true title to the property, and it often depends on a first-in-time recording rule. As a consequence of the original house seller’s scam, one innocent party winds up losing.
The public property registry system in Nicaragua provides the details of who owns the property. If you have a property with a clean title history you will be secure. (Getting title insurance is a good idea in case any claims are made to save you the hassle of dealing with them). Trouble is many people don’t hire a competent real estate attorney which means they don’t end up with a properly conducted title check. They are told that they own the property fee simple on the back of a clean title chain, but in fact there may be hidden issues lurking. The answer: get a qualified attorney. They do exist and the registry system will provide the information necessary for a full title check.