Why should I consider a property investment in San Juan del Sur?

There are 3 great reasons to buy real estate anywhere in the world:

  • To position yourself for capital growth by finding undervalued property.
  • To upgrade your lifestyle by choosing a location where your money goes further.
  • To gain a rental income by tapping into a growing visitor trend.

These are exactly the kind of opportunities that property in San Juan del Sur can deliver.

Located just over the border from Costa Rica, it’s arguably the most beautiful and sought-after area in Nicaragua. Yet despite being the top tourism destination on the Pacific, it’s still an “early-in” real estate market with prices far lower than elsewhere in Central America.

Here’s more on the real estate market, the economy and the geography of the area.

The real estate market

  • Property prices start very low but are increasing. Developments are springing up across the region. The sales rate slowed in late 2008 and into 2009 following the global economic crisis but San Juan del Sur has not experienced the across-the-board, double-digit falls seen in parts of the developed world. The market has come back strongly in late 2012 and into 2014, particularly among the so-called “lifestyle” investors.
  • Foreign investment Law 344 assures that foreign and domestic investment receives the same treatment. The law eliminates restrictions on the way in which foreign capital can enter the country and recognizes the investor’s right to own property and establish business enterprises as they wish. 100% foreign ownership is allowed – there is no requirement to have a local partner.
  • The Nicaraguan Government has established attractive residency and retirement programs where eligible persons are given customs exemptions for household goods and vehicles. Each update sees further improvements. The latest revision increased tax exemptions and benefits.
  • Tourism trends are useful predictors of real estate sales. In San Juan del Sur the tourism industry is growing at a fast clip and is now the top earner. The local real estate market is benefiting from the influx of visitors and a strong vacation rental sector is developing.
  • The cost of building is approximately $70-$95 per square foot. For more information on building in Nicaragua sign up to our Insider Tips Series for an interview with a respected local builder.

The economy

  • Nicaragua’s GDP growth rate is ahead of regional averages. The FDI/GDP index, which provides an objective measure of FDI flows in relation to the size of the economy has Nicaragua ranking first in Central America over the last five years
  • Nicaragua is a signatory of the Central American Free Trade Agreement (CAFTA)
  • Living in Nicaragua is highly affordable. IMF Purchasing Power Parity (PPP) figures show that your dollar goes further in Nicaragua than in any Central American country.   (Here’s more information on the local cost of living)
  • Massive upgrades in roads, infrastructure and utilities are underway in the San Juan del Sur area.
  • San Juan del Sur is at the beginning of a development curve. As the town evolves entrepreneurial opportunities are appearing in every sector – from B&Bs to bakeries; spa services to yoga centers; surfing expeditions to fishing charters; tour agencies to specialty shops; hospitality services to property management… the list goes on.
  • For those wanting a foothold in a local tourism-related business, Nicaragua’s Tourism Incentive Law 306 provides tax breaks on income, real estate and imports for 10 years.

The “lifestyle factors”

  • Investors are attracted by the beautiful Pacific coastline. Nicaragua’s most beautiful beaches are found in the area. Some are deeply carved, with steep backdrops and capped on either end by rocky points. Others are long stretches of sand dotted with palm trees. Beyond the beautiful beaches is a rugged interior of jungle and volcanoes that’s begging to be explored. Sunny hills roll in all directions, ox-wagons roll by on wooden wheels and howler monkeys call from the trees.
  • San Juan del Sur has a vibrant expat community with events practically every night of the week. Live music, open-mic nights, ladies nights, trivia nights, poker events, book clubs, yoga classes, water aerobics and a weekly farmers market. There’s lots to do and lots of places to do it – from trendy bars to fancy hotels and international restaurants.
  • Then there are the world-class surf breaks, the fishing, horseback riding and the zip lining opportunities. The place is rich in the kind of “lifestyle factors” investors look for in an international property market.  And we haven’t even mentioned the famous San Juan del Sur sunsets.
  • For more on what makes the place a great destination for both investors and tourists check out the 7 things not to miss on vacation in San Juan del Sur.

For a more anecdotal take on the reasons to buy real estate in Nicaragua, here are 15 views from investors who have taken the plunge. The article is part of our Insider Tips Series which you can subscribe to here.

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