The best way to prosper as a buyer of foreign real estate is to invest along what I call the “Path of Progress”: anything that improves the accessibility of a piece of real estate increases its value. Think roads, rail lines, bridges, airports and airline routes.
Also, anything that improves amenities in an area will also increase real estate values. Amenities like major resorts, theme parks and conference centers. You can profit handsomely by positioning yourself ahead of such improvements.
To profit from a Path of Progress play, you need:
- Credible research: In practically every locale that I scout, I hear tales of a new airport… or road… or bridge, etc. It’s important to make sure the funds are in place to deliver the new infrastructure, and that the country or region has the capacity to deliver the project.
- Vision: You need to be able to detach yourself from what the area currently looks like and visualize what it could be with delivery of the new infrastructure and amenities. You need to be able to picture what that raw, unimproved landscape could look like if the plan comes off.
- Patience: Finally, you need to be able to stay the trade. By that I mean you need to be willing to sit on your investment for the medium term. Infrastructure projects take time, particularly if you are looking at a less developed country. Take a conservative timeline for exit… double it… and if you’re happy with those timelines, great. Otherwise, walk away.
The southern Pacific coast of Nicaragua, now known as the Costa Esmeralda, is one foreign locale that is clearly on the Path to Progress. A wide variety of important improvements and amenities have come to the region. More are on the way.
Nicaragua’s capital, Managua, has been accessible for several years by short nonstop flights from Miami and Houston. But now, a new Delta nonstop from Los Angeles flies straight down the Pacific coast to a location that looks very similar to the Southern California coastline… of 100 years ago.
This 4 1/2 hour plane ride from the snapped-up beachfront and million-dollar mansions of the Golden State brings you to deserted beaches, lush, jungle-clad hills, and low-cost real estate that has to be seen to be believed. Locals still spearfish for lobster, snapper, and mackerel here (you can buy it for as little as $2 a pound and have it grilled on the beach). Monkeys swing through the trees and hundreds of colorful birds flit past.
Along the shores of Nicaragua, you’ll find one of the few frontiers of Pacific coast left – certainly this close to the U.S. – and something big is happening there. This small country is becoming a hip destination… like Costa Rica in the 1980s.
[Editor’s Note: Just this week, Forbes featured Nicaragua’s Rancho Santana as one of its seven “Most Luxurious Beach Vacations.”]
You can see Nicaragua’s new place in the travel world on the streets and in the cafés and galleries of Granada. In my hotel, I met groups from Costa Rica, Eastern Europe and Spain. Sipping an espresso outside, I saw backpackers from the U.K. and glamorous-looking Italians. And you’ll find plenty of U.S. expats, too.
There are signs of progress everywhere: newly paved highways, big renewable energy (wind and geothermal) projects, and commercial-agriculture ventures. The signs of the new consumer are also easy to see: the highway-side billboards… the new restaurants… the shiny new private hospital and corporate HQs.
You may be surprised to read that it’s the safest country in the region. After all, there’s a civil war in recent memory and a former revolutionary, Daniel Ortega, is now el Presidente.
But to fear Nicaragua is to misunderstand it. You won’t meet warmer or kinder people anywhere. You are always greeted by a kind smile. And the former revolutionaries are pragmatists: businessmen who now want to do deals to move their country – and their own interests – forward.
I have been hopeful for little Nicaragua since I started visiting nine years ago. And the potential I saw back then is now being realized. One 20-mile stretch of coast in the Tola area will be the big winner. Just 50 miles as the crow flies from the high-end resorts and million-dollar real estate of northern Costa Rica, you’ll find the nicest and most dramatic part of Nicaragua’s coast. And it’s being transformed.
The road south from the colonial gem of Granada takes you through Rivas and then Tola. Not too long ago, when you passed through Tola toward the coast, the road would turn to dirt. In the rainy season, even the strongest SUV had to zig-zag around potholes. In the dry season, passing traffic would throw up great clouds of dust.
But today, beyond Tola you transition onto a paved road of interlinking cobblestones. It’s smooth and comfortable. And work is continuing to bring this road farther along the coast. The infrastructure story doesn’t end with the road. A new airport is opening for business in just two weeks – bringing short-haul flights directly to the region from Managua and Costa Rica.
[Editor’s Note: This airport is making quite a splash in the local news media. If you speak Spanish, you can check it out here.]
A 15-minute drive from the new airport sits Rancho Santana – a community with five beaches, 2,700 acres and more than two miles of this stunning coast. The new, grand Spanish colonial-style Inn opened earlier this year to rave reviews. The adjoining beachfront restaurant, La Finca y El Mar, is top class.
Ocean-view lots in Rancho Santana start from about $95,000 – the best bang for your buck along this stunning coast. From time to time, home resales come on the market as well.
Property values are definitely perking up along Nicaragua’s Path of Progress, but there are still great values to be had.
Good investing,
Ronan McMahon
For The Non-Dollar Report
A note from Eric: Ronan will be joining us at the Inaugural Beyond the Dollar Summit, which takes place at Rancho Santana next January. Several other global investment experts will also be sharing their insights and guidance. We hope you’ll be able to come on down!
The post The Path of Progress Rolls Though Nicaragua appeared first on Non Dollar Report.