Buy, Rent, Restore or Build
You have decided to move to Nicaragua either permanently, for an extended stay or just want to buy property. You do not have to be a resident to own property or start a business in Nicaragua. We are not experts at real estate, investments nor construction. The purpose of this website is to provide information that hopefully will help you make informed decisions and we have been through the process or have friends that have experienced these issues already. A common theme on this website for solutions is to talk to expatriates before coming to Nicaragua or upon your arrival and talk to more than one of them.
Nicaragua is a beautiful country with bountiful land and resources populated by a gentle people. It is seriously underdeveloped yet ready for a boom when the serious investors arrive but we have no idea when that boom will occur. We only know what Nicaragua is now and it is somewhere that should be considered by people, especially retirees, for relocation if you are looking for a life which encompasses learning a new culture and making new friends with a sense of adventure thrown in. They say two types of people come to this country, “those that live in Nicaragua and those that live on Nicaragua”. We need more of the former than the latter.
The government recognizes the advantages of tourists and people moving to Nicaragua. The new retirement laws and investment enticements are second to no other country. You can live here very inexpensively but enough sales talk.
Where to Live?
We always recommend that you rent for at least six to twelve months before making any decisions. Nicaragua has colonial cities, ocean front, mountains, islands, farms, valleys and small, tucked away towns. Deciding where to live is a tough decision that will depend more on your sense of adventure and what you are looking for out of life. For expatriates, the two hot spots are the Pacific Coast and Granada. There are actually many expats living in the capital of Managua but these tend to be those that have businesses in Nicaragua, work with the embassies or other international concerns.
Granada is the colonial city of Nicaragua with many restaurants and activities to enjoy. It is 45 minutes from the international airport and the best medical facilities of the country not to mention modern malls and stores. Granada has what many retirees look for in a retirement destination and enough expats to allow community groups from book clubs to volunteer organizations. Yet it retains the small town feel where you can easily open a bed and breakfast or just relax.
On the Pacific Coast most of the new developments are clustered North and South of San Juan del Sur, a small fishing village that is popular with both tourists and Nicas. The views are stunning here and land is relatively cheap especially now during the global economic crisis. There are many developments to check out and few have many homes yet. Most are very small developments but there are too many to mention here. Notable development names include Aqua Wellness Development, Rancho Santana, Iguana and El Encanto with Iguana already having a 9-hole golf course. Roads are excellent to San Juan del Sur but they get rough quickly following the coast both North and South but slowly being paved. Rancho Santana is enjoying some growth right now since they finally built a condo building, club house and restaurant.
Growing in popularity is the Pacific Coast area directly West of Managua. Good roads bring you to the coast in about an hour from the heart of Managua. Here you will find the larger planned developments of Montecristo, Gran Pacifica and a few smaller ones. Both have plans for building self-sufficient villages with stores, homes, condos, golf and other amenities. Leading the pack at this time (May 2014) is Gran Pacifica that has completed a condo building, several dozen homes and a golf course.
Then there is the other 99% of Nicaragua to choose from though the number of expats at each location drops off quickly. Esteli, Jinotega and Matagalpa have wondrously cool climates and gorgeous mountain and lake views. The entire Caribbean coast is almost empty as is most of the Northeast but you will need to be self sufficient to survive and not need companionship. The shores of the San Juan River are also beautiful if you want to live in a rain forest. People that visit the twin volcanoes of Ometepe Island are often tempted to just settle down and stay.
Personally, we believe one of the most overlooked desirable areas are the small mountains surrounding Managua. You are only a few minutes from the modern conveniences of Managua yet you can live in the cool climate where the pineapple farms nestle. Gorgeous views and the land is cheap. Depends on what you are looking for.
Living in a Development
Many of our friends living here have stated they would never live in a development and when we first decided to move here, we considered moving to a small town with few, if any, expats to enrich our immersion into the Nica culture. Well, we’re a little older now, and most of us find we need to occasionally get with people of like culture especially in a strange land.
There are many reasons to consider living within a development. You have a better guarantee of water, electricity, cable, Internet and zoning regulations. This is not true in all developments since some have no plans to build any infrastructure but the reputable ones will provide a better sense of true development. We live in Granada and there really is nothing to stop my neighbor from raising chickens. In fact, a pickup dropped off two large pigs to another neighbor which were herded quickly into their home. I assume they were slaughtered for meat since I heard no pig noises the next day and they were too big to be pets.
It is relatively safe here but with a secure development you do not have to worry as much about security. If you want to travel for two months, you do not have to worry about squatters while you are gone. It is more likely that you will have title insurance in a development and even without title insurance, you will feel more secure about your title security since any aggressors would have to fight the whole development and not just one homeowner. This is an underdeveloped country and some people have lost title because they did not research it properly before buying the property.
Larger developments will offer activities that you may want to have in your life. For example, golf, tennis, horseback riding, community activities, clubhouses, community pools, shopping trips, vans to the airport or group excursions. The larger developments may even have medical facilities for emergencies and several have announced assisted-living facilities. Another advantage of developments is that they usually do not charge any realtor fees if you buy from them directly. And don’t forget, the price is usually negotiable. Lastly, building in a major development means you can build a home without iron bars on the windows or doors, something which is rare in Central America.
HOAs or home owners associations are just starting to appear here. This gives you the advantage of some controls on the development to prevent your neighbor from building a pig farm. But it is still Nicaragua and I'm wary of enforcement. There are still few homes in any development and property owners with homes living in another country may be difficult to force to pay their HOA dues. Check their HOA records and ensure people are paying and that you are getting what the CCRs state.
We live in Granada presently and it really is just a large development. More expats live in Granada and Managua than anywhere else but I believe the future will be more people living in the major developments especially once they become large enough to support community activities.
Viable Developments
For those of you wanting to live in a development and that will be many, if not most, of the future people moving to Nicaragua, you must make a decision of which development. I cannot and will not address those of you that want to invest in land since we assume you know how to perform the necessary due diligence. I will remind everyone of the old adage "if it does not exist, do not assume it will be built". Which developments will grow, which offer good value and which will deliver on their promises? If I knew, I would be a very rich person.
Of the dozens and dozens of developments especially along the Pacific Coast, most are in the same state as when we arrived in 2006. Most have few houses or none. Many still do not have any infrastructure without the many permits necessary to build and most of the lots are owned by people that have no intention of ever building there and many were sold over the Internet sight unseen. I know since we own several lots in several locations. I am not sure what I was thinking at the time but it seemed a brilliant idea before the global financial crisis.
For those of you wanting to move to Nicaragua, buy or build a home immediately and live in an active, growing community within a development there are actually few choices. Many of these buyers will be near or past the retirement age so they will not want to wait 20 years for the community to grow large enough to support itself. I refer to these few developments as viable developments.
My definition of a viable development is one that has three qualities:
At this time (September 2012), my definition of viable communities would include Aqua, Montecristo, Gran Pacifica, Iguana, Rancho Santana, El Encanto, Vista Lago and Valle Escondido. Don't get me wrong since there are many other fine developments you may be quite happy in but few fit the above criteria. Also, things may change over time. And last but not least, if you are investing then there are quite a few sleepers you may make money with. A home is not an investment.
Many of our friends are developers and realtors. If any of them take serious opposition to my thoughts here, they may feel free to inform me of other developments they think should be included. I would even entertain publishing a counterpoint to ensure the readers are well informed.
Buying Property in Nicaragua
There is no MLS (multiple listing service) in Nicaragua and it is rare that anyone gives an exclusive listing to a realtor which means every realtor can sell that property to you or even the property owner. Unlike lawyers, there really are not that many real realtors in Nicaragua. Many people will try to sell land to you but few are realtors. The major players are all here including ReMax, Century 21, Coldwell Banker and many independents.
Remember our first rule! Do not buy anything until you have lived here for at least six months to a year. For the past 10 years in the states, the usage of realtors has been declining since so many regulations protected you that it was just as easy to list your home or property on MLS and use one of the “For Sale By Owner (FSBO)” services that would handle the details of the sale. Our last three property sales in the states cost us less than $1000 each for the cost of the sale. And as a result, the percentages charged by realtors were dropping. That may have changed with the present housing crisis.
Some of the realtors here tend to charge more as a percentage for unknown reasons often charging five to seven percent and here, the buyer usually pays the realtor fees. Still, we would recommend using a realtor since they are more familiar with property availability and more importantly, are usually expert at title searching and ensuring the closing happens as expected with few surprises. Always talk to several expats before deciding on a realtor and don’t be surprised to hear a horror story about any or most of the realtors. Horror stories about property sales in Nicaragua are like listening to a friend’s divorce story. You are shocked into agreement until you hear the other side of the story.
Real estate property taxes are generally .8 to 1% of the catastral value of the property and are paid to the municipal government each year. It is not unusual for a closing to be for one amount but the paperwork shows a much lower amount. For example, you buy the property for $100,000 but the documents state $20,000. This is illegal even here but quite common since it lowers the real estate transfer tax for the seller and the property taxes for the buyer. To reiterate, the sales contract would normally state the true sales price to ensure everyone knows the correct commission fees, dollar amounts to be transferred, etc. but the legal documents may reflect some agreed-upon lower value probably similar to the previous estimated vale. Of course, eventually the city property appraiser shows up and may laugh at the lower value and change it to something much higher. It is a good idea to be on amiable terms with the appraisal office. We are on good terms with our appraiser and our property taxes have fallen 10-15% each year. They give you 10% off if you pay by March 31st. We really like this country!
In general, the common thinking here is to avoid any property that is municipal property or has an Agrarian Reform title. Again, this is where a good realtor having a good lawyer is well worthwhile. We bought our Granada home from ReMax with a closing that took five minutes and we received our title two weeks later. We have friends that have not received their title one year later. Another realtor arranges for our property taxes to be paid each year by us just depositing money to his account. This saves us from traveling to another city and possibly spending hours in line.
Be sure to have Nicaraguan wills in place even if married to allow the property to pass to your heirs. Your foreign will has little value here. Remember all prices are negotiable and do not be surprised to find that different realtors have the same property listed for a different price. It’s not that they are ripping you off. Things are little loosey-goosey here and the property owner may have only notified one realtor of the price reduction.
Some things to consider in buying property in Nicaragua:
Should you rent, buy an existing home or build one?
We always recommend renting for at least the first six months to a year in your desired location before buying anything. A friend of ours rents a large home then rents out the additional bedrooms, drastically reducing the rental cost and getting to meet interesting guests. You may decide Nicaragua is not for you and renting lets you go to another country easier. Also, renting means you could keep your home in your home country in case you decide to return or family matters dictate. At this time (May 2014) it is easy to buy a home but much more difficult to sell it.
There is no reason you have to buy a home. You can always rent as long as you wish which is especially convenient for people wanting to travel a lot and just use the rented house as a home base. Of course, this assumes you have the funds to pay the rent since owning a home drastically reduces your cost of living. Renting also allows you to try as many locations as you wish in Nicaragua before making a decision. Short-term renting will be more expensive especially during the high period of December-March when the tourists come.
There are property managers in the larger cities that can assist you in finding a rental and they will also provide cleaning, security and whatever else you may wish. We have not found Craig’s List too convenient for Nicaragua but www.vianica.com has the best listings for short-term accommodations.
Buying an existing home is convenient and faster but many people are attracted to designing a new home or restoring an existing one. An existing home can be moved into immediately and you can see exactly what you have. Assuming you did a good inspection, there should be no surprises. You already know who your neighbors are. We believe you must have a pool and a hammock. A house becomes a home when you put up the hammock. Perhaps you are buying into a development then the community pool may be sufficient. What should be in the home is the same for an existing home as a newly constructed home.
Building a home in Nicaragua is not for the faint of heart. Most if not all of the construction companies state they build to North American standards but there are fewer rules here. Homes are much simpler here since they normally do not have A/C or heating ducts and vented roofs are unheard of. Air flow is the most important consideration in the design. For example, in Granada the same house that is aligned East-West is much cooler than one aligned North-South due to the lake breezes from the East.
Construction costs can run from $30 to over $200 per sf for a very nice house although here the square footage includes all patios and terraces even if uncovered. That cost is exclusive of the land. Land is not cheap here and ocean front is more. Lots in a good development tend to run higher since they provide infrastructure and amenities.
Nicaragua has many unique, elegant and affordable architectural materials and some of the most beautiful woods in the world. You can have your granite counter-tops but it can also be natural wood, tiled or about anything you can design. The homes here do tend to be built around the outdoors often with gardens, fountains and patios within the home.
Carpeting is very rare so most floors are tiled including the garage. Picking out a tile is an art. Many places here have glazed or smooth tiles which is nice but impossible to walk on when wet. Rougher tiles are harder to keep clean so you will have to find a happy median. The main reason you need maids here is to sweep and mop the floors daily due to the dust. Remember, often you are living partially outdoors.
The tile roof is beautiful to behold and lets the hot air rise out of the house. Unfortunately it allows the rain to enter when the storm has any force or is coming down at an angle. Expats tend to like solid roofs which means an inner roof of zinc covered by tiles or using an artificial material that gives an appearance of tiles. Either of these methods prevents the hot air from escaping so strategic windows are needed or another method of ventilation. Why are roof vents so rare here?
Other factors affect the design of the home. Hot water is not as necessary in the warmer climate and air conditioning is not used as much as you would expect. One reason is that gas and electricity is much more expensive here. Solar powered hot water heaters are starting to appear. Do you really need to wire rooms anymore for telephone land lines? The answer is yes if your Internet is based on a phone line. There are outages of electricity and water so you may wish to plan for backup systems such as battery backup systems. In a development these may be moot issues or regulated by the HOA rules. We have surge protectors on almost all of our electrical devices but if I were to design a new home I would install a surge protection device that would protect everything. You must have surge protectors on every TV and most electrical devices. Get used to it!
Labor in Nicaragua is some of the cheapest in the world creating an opportunity to build a home that is not economically viable in the United States or Canada. This may include amazing arched ceilings, arched entry ways, arched windows, decorative concrete, stamped concrete, stained concrete and rounded corners. The ability to build an amazing home in Nicaragua is almost unsurpassed worldwide.
Unless in a development requiring you to use one of their designs and their construction companies you will need to find a reliable architect and construction company. This is not an easy task and one where you must speak to other expats for advice on who they used or possibly to find out who not to use. Again, you will hear horror stories about most companies but verify the story before you believe it. If we believed every story we had heard there would be no viable realtors, businesses or construction companies in Nicaragua.
Find out what they have built before, look at the building quality, time it took to build and check with the home owners on their opinion of the work. Get several quotes and do not just select the cheapest one. Ensure the building contract is clear and understood by all parties. Payment schedules are the opposite than in the states. In the states you paid for completed work after the initial deposit while here you usually provide the money up front for each step. It is rare to see mortgages or construction loans unless in a major development. You will encounter difficulties but building in Nicaragua can be very rewarding with a good contract, professional architectural plans and clear communication. Contractors usually charge at cost plus 20% but check all of their receipts.
Clear communication means you will want to inspect often and carefully. Two of our friends, one building a home and one building a condo, were surprised to find the room dimensions were radically different from the blueprints. The construction started from the back of the structure and by the time they got to the front there was 10 to 12 feet missing. One of the major reasons for the lower cost construction is that the cost of labor is very low and often, the quality will suffer since the only person with the construction knowledge is the supervisor. We know so many stories of walls constructed in the wrong location, missing windows or light switches on the wrong side of the room. Many of the construction companies boast of their custom doors and windows but it may be because they’re not sure what size those openings will be until the construction is complete.
If you are really strong of heart, you will have the house constructed while you are out of the country. If out of the country, make sure you receive photos or videos on a regular basis to verify when the progress payments should be made. This will allow you to stop construction and payments at any time if problems are not fixed. It is not unusual for the work crews to live near the construction until it is completed.
How long does it take to build your new home? Good question. The house across the street from us was torn down and completely restored with a swimming pool in just three months. Another one took eight months and the owner was excited it was completed so quickly. On average, it should take five to seven months assuming nothing unusual is encountered. You will encounter difficulties and surprises.
Hope we have not scared you away but you must be vigilant. If you are careful, you will have a beautiful home that you never could have built for the same price elsewhere.
Here is a link to the Nicaraguan building regulations in Spanish, of course:
https://www.dropbox.com/sh/zfbvrp8r48zu6ih/AADwSd_oZ1RrCuEPS8IUHntga?dl=0
Nicaragua is a beautiful country with bountiful land and resources populated by a gentle people. It is seriously underdeveloped yet ready for a boom when the serious investors arrive but we have no idea when that boom will occur. We only know what Nicaragua is now and it is somewhere that should be considered by people, especially retirees, for relocation if you are looking for a life which encompasses learning a new culture and making new friends with a sense of adventure thrown in. They say two types of people come to this country, “those that live in Nicaragua and those that live on Nicaragua”. We need more of the former than the latter.
The government recognizes the advantages of tourists and people moving to Nicaragua. The new retirement laws and investment enticements are second to no other country. You can live here very inexpensively but enough sales talk.
Where to Live?
We always recommend that you rent for at least six to twelve months before making any decisions. Nicaragua has colonial cities, ocean front, mountains, islands, farms, valleys and small, tucked away towns. Deciding where to live is a tough decision that will depend more on your sense of adventure and what you are looking for out of life. For expatriates, the two hot spots are the Pacific Coast and Granada. There are actually many expats living in the capital of Managua but these tend to be those that have businesses in Nicaragua, work with the embassies or other international concerns.
Granada is the colonial city of Nicaragua with many restaurants and activities to enjoy. It is 45 minutes from the international airport and the best medical facilities of the country not to mention modern malls and stores. Granada has what many retirees look for in a retirement destination and enough expats to allow community groups from book clubs to volunteer organizations. Yet it retains the small town feel where you can easily open a bed and breakfast or just relax.
On the Pacific Coast most of the new developments are clustered North and South of San Juan del Sur, a small fishing village that is popular with both tourists and Nicas. The views are stunning here and land is relatively cheap especially now during the global economic crisis. There are many developments to check out and few have many homes yet. Most are very small developments but there are too many to mention here. Notable development names include Aqua Wellness Development, Rancho Santana, Iguana and El Encanto with Iguana already having a 9-hole golf course. Roads are excellent to San Juan del Sur but they get rough quickly following the coast both North and South but slowly being paved. Rancho Santana is enjoying some growth right now since they finally built a condo building, club house and restaurant.
Growing in popularity is the Pacific Coast area directly West of Managua. Good roads bring you to the coast in about an hour from the heart of Managua. Here you will find the larger planned developments of Montecristo, Gran Pacifica and a few smaller ones. Both have plans for building self-sufficient villages with stores, homes, condos, golf and other amenities. Leading the pack at this time (May 2014) is Gran Pacifica that has completed a condo building, several dozen homes and a golf course.
Then there is the other 99% of Nicaragua to choose from though the number of expats at each location drops off quickly. Esteli, Jinotega and Matagalpa have wondrously cool climates and gorgeous mountain and lake views. The entire Caribbean coast is almost empty as is most of the Northeast but you will need to be self sufficient to survive and not need companionship. The shores of the San Juan River are also beautiful if you want to live in a rain forest. People that visit the twin volcanoes of Ometepe Island are often tempted to just settle down and stay.
Personally, we believe one of the most overlooked desirable areas are the small mountains surrounding Managua. You are only a few minutes from the modern conveniences of Managua yet you can live in the cool climate where the pineapple farms nestle. Gorgeous views and the land is cheap. Depends on what you are looking for.
Living in a Development
Many of our friends living here have stated they would never live in a development and when we first decided to move here, we considered moving to a small town with few, if any, expats to enrich our immersion into the Nica culture. Well, we’re a little older now, and most of us find we need to occasionally get with people of like culture especially in a strange land.
There are many reasons to consider living within a development. You have a better guarantee of water, electricity, cable, Internet and zoning regulations. This is not true in all developments since some have no plans to build any infrastructure but the reputable ones will provide a better sense of true development. We live in Granada and there really is nothing to stop my neighbor from raising chickens. In fact, a pickup dropped off two large pigs to another neighbor which were herded quickly into their home. I assume they were slaughtered for meat since I heard no pig noises the next day and they were too big to be pets.
It is relatively safe here but with a secure development you do not have to worry as much about security. If you want to travel for two months, you do not have to worry about squatters while you are gone. It is more likely that you will have title insurance in a development and even without title insurance, you will feel more secure about your title security since any aggressors would have to fight the whole development and not just one homeowner. This is an underdeveloped country and some people have lost title because they did not research it properly before buying the property.
Larger developments will offer activities that you may want to have in your life. For example, golf, tennis, horseback riding, community activities, clubhouses, community pools, shopping trips, vans to the airport or group excursions. The larger developments may even have medical facilities for emergencies and several have announced assisted-living facilities. Another advantage of developments is that they usually do not charge any realtor fees if you buy from them directly. And don’t forget, the price is usually negotiable. Lastly, building in a major development means you can build a home without iron bars on the windows or doors, something which is rare in Central America.
HOAs or home owners associations are just starting to appear here. This gives you the advantage of some controls on the development to prevent your neighbor from building a pig farm. But it is still Nicaragua and I'm wary of enforcement. There are still few homes in any development and property owners with homes living in another country may be difficult to force to pay their HOA dues. Check their HOA records and ensure people are paying and that you are getting what the CCRs state.
We live in Granada presently and it really is just a large development. More expats live in Granada and Managua than anywhere else but I believe the future will be more people living in the major developments especially once they become large enough to support community activities.
Viable Developments
For those of you wanting to live in a development and that will be many, if not most, of the future people moving to Nicaragua, you must make a decision of which development. I cannot and will not address those of you that want to invest in land since we assume you know how to perform the necessary due diligence. I will remind everyone of the old adage "if it does not exist, do not assume it will be built". Which developments will grow, which offer good value and which will deliver on their promises? If I knew, I would be a very rich person.
Of the dozens and dozens of developments especially along the Pacific Coast, most are in the same state as when we arrived in 2006. Most have few houses or none. Many still do not have any infrastructure without the many permits necessary to build and most of the lots are owned by people that have no intention of ever building there and many were sold over the Internet sight unseen. I know since we own several lots in several locations. I am not sure what I was thinking at the time but it seemed a brilliant idea before the global financial crisis.
For those of you wanting to move to Nicaragua, buy or build a home immediately and live in an active, growing community within a development there are actually few choices. Many of these buyers will be near or past the retirement age so they will not want to wait 20 years for the community to grow large enough to support itself. I refer to these few developments as viable developments.
My definition of a viable development is one that has three qualities:
- The required infrastructure is in place and certainly to where you plan to build.
- You can legally and practically begin building a house on your lot today.
- There exists already or there will be soon be enough homeowners to call it a true community. Think of this as the potential of the development.
At this time (September 2012), my definition of viable communities would include Aqua, Montecristo, Gran Pacifica, Iguana, Rancho Santana, El Encanto, Vista Lago and Valle Escondido. Don't get me wrong since there are many other fine developments you may be quite happy in but few fit the above criteria. Also, things may change over time. And last but not least, if you are investing then there are quite a few sleepers you may make money with. A home is not an investment.
Many of our friends are developers and realtors. If any of them take serious opposition to my thoughts here, they may feel free to inform me of other developments they think should be included. I would even entertain publishing a counterpoint to ensure the readers are well informed.
Buying Property in Nicaragua
There is no MLS (multiple listing service) in Nicaragua and it is rare that anyone gives an exclusive listing to a realtor which means every realtor can sell that property to you or even the property owner. Unlike lawyers, there really are not that many real realtors in Nicaragua. Many people will try to sell land to you but few are realtors. The major players are all here including ReMax, Century 21, Coldwell Banker and many independents.
Remember our first rule! Do not buy anything until you have lived here for at least six months to a year. For the past 10 years in the states, the usage of realtors has been declining since so many regulations protected you that it was just as easy to list your home or property on MLS and use one of the “For Sale By Owner (FSBO)” services that would handle the details of the sale. Our last three property sales in the states cost us less than $1000 each for the cost of the sale. And as a result, the percentages charged by realtors were dropping. That may have changed with the present housing crisis.
Some of the realtors here tend to charge more as a percentage for unknown reasons often charging five to seven percent and here, the buyer usually pays the realtor fees. Still, we would recommend using a realtor since they are more familiar with property availability and more importantly, are usually expert at title searching and ensuring the closing happens as expected with few surprises. Always talk to several expats before deciding on a realtor and don’t be surprised to hear a horror story about any or most of the realtors. Horror stories about property sales in Nicaragua are like listening to a friend’s divorce story. You are shocked into agreement until you hear the other side of the story.
Real estate property taxes are generally .8 to 1% of the catastral value of the property and are paid to the municipal government each year. It is not unusual for a closing to be for one amount but the paperwork shows a much lower amount. For example, you buy the property for $100,000 but the documents state $20,000. This is illegal even here but quite common since it lowers the real estate transfer tax for the seller and the property taxes for the buyer. To reiterate, the sales contract would normally state the true sales price to ensure everyone knows the correct commission fees, dollar amounts to be transferred, etc. but the legal documents may reflect some agreed-upon lower value probably similar to the previous estimated vale. Of course, eventually the city property appraiser shows up and may laugh at the lower value and change it to something much higher. It is a good idea to be on amiable terms with the appraisal office. We are on good terms with our appraiser and our property taxes have fallen 10-15% each year. They give you 10% off if you pay by March 31st. We really like this country!
In general, the common thinking here is to avoid any property that is municipal property or has an Agrarian Reform title. Again, this is where a good realtor having a good lawyer is well worthwhile. We bought our Granada home from ReMax with a closing that took five minutes and we received our title two weeks later. We have friends that have not received their title one year later. Another realtor arranges for our property taxes to be paid each year by us just depositing money to his account. This saves us from traveling to another city and possibly spending hours in line.
Be sure to have Nicaraguan wills in place even if married to allow the property to pass to your heirs. Your foreign will has little value here. Remember all prices are negotiable and do not be surprised to find that different realtors have the same property listed for a different price. It’s not that they are ripping you off. Things are little loosey-goosey here and the property owner may have only notified one realtor of the price reduction.
Some things to consider in buying property in Nicaragua:
- Access to the property. The major highways are great but how about that 5 Km unpaved road to your property? Many a property can only be accessed during the dry season.
- If it is important to you, how long of a drive to medical facilities, the airport or a grocery store?
- Is security an issue? If yes, an argument for living in a good development.
- Is title insurance available or desired? Note - this is now a moot point since title insurance is no longer available in Central America.
- Is home insurance available or desired? Few people have home insurance.
- Are there zoning laws in place or at least a HOA? An argument for living in a development. If there is an HOA, check to see if everyone is required to join and how it works. Remember, many of the property owners may live outside the country and refuse to pay the dues.
- If it does not exist, don’t be sure it is coming i.e. water, electricity, neighbors, coastal road, etc. A good example is several realtors and developers state the Pacific coastal road is coming. It was first proposed in 1928 and we're still waiting.
- Is there a water or electrical connection?
- Do you need hot water? Not as necessary as you may think and often not available. Your home may not be plumbed for hot water. Gas and electric hot water heaters are expensive to run here. We have electric shower heads which are much cheaper and more efficient.
- Is Internet and cable TV available? The cable TV in cities has many English channels while the satellite receivers have very few USA channels.
- Sewer or septic?
- Consider electrical or water backup. Either one sometimes is not available. We have a battery storage backup for the essentials such as TV, fans and computers.
- If a development, are there any homes being built or are people buying lots for investment flipping?
- If not living here full-time, can you rent out your home?
- If buying an existing home
- check the roof carefully during a rainstorm, this is the land of tile roofs
- check every outlet and electrical device such as fans. Electricity disappears often and abruptly, burning out unprotected and poorly designed electrical circuits. You will need surge protectors for almost all electrical devices.
- Building or buying a home on the arroyo - not necessarily bad but it is where the boys hang out.
Should you rent, buy an existing home or build one?
We always recommend renting for at least the first six months to a year in your desired location before buying anything. A friend of ours rents a large home then rents out the additional bedrooms, drastically reducing the rental cost and getting to meet interesting guests. You may decide Nicaragua is not for you and renting lets you go to another country easier. Also, renting means you could keep your home in your home country in case you decide to return or family matters dictate. At this time (May 2014) it is easy to buy a home but much more difficult to sell it.
There is no reason you have to buy a home. You can always rent as long as you wish which is especially convenient for people wanting to travel a lot and just use the rented house as a home base. Of course, this assumes you have the funds to pay the rent since owning a home drastically reduces your cost of living. Renting also allows you to try as many locations as you wish in Nicaragua before making a decision. Short-term renting will be more expensive especially during the high period of December-March when the tourists come.
There are property managers in the larger cities that can assist you in finding a rental and they will also provide cleaning, security and whatever else you may wish. We have not found Craig’s List too convenient for Nicaragua but www.vianica.com has the best listings for short-term accommodations.
Buying an existing home is convenient and faster but many people are attracted to designing a new home or restoring an existing one. An existing home can be moved into immediately and you can see exactly what you have. Assuming you did a good inspection, there should be no surprises. You already know who your neighbors are. We believe you must have a pool and a hammock. A house becomes a home when you put up the hammock. Perhaps you are buying into a development then the community pool may be sufficient. What should be in the home is the same for an existing home as a newly constructed home.
Building a home in Nicaragua is not for the faint of heart. Most if not all of the construction companies state they build to North American standards but there are fewer rules here. Homes are much simpler here since they normally do not have A/C or heating ducts and vented roofs are unheard of. Air flow is the most important consideration in the design. For example, in Granada the same house that is aligned East-West is much cooler than one aligned North-South due to the lake breezes from the East.
Construction costs can run from $30 to over $200 per sf for a very nice house although here the square footage includes all patios and terraces even if uncovered. That cost is exclusive of the land. Land is not cheap here and ocean front is more. Lots in a good development tend to run higher since they provide infrastructure and amenities.
Nicaragua has many unique, elegant and affordable architectural materials and some of the most beautiful woods in the world. You can have your granite counter-tops but it can also be natural wood, tiled or about anything you can design. The homes here do tend to be built around the outdoors often with gardens, fountains and patios within the home.
Carpeting is very rare so most floors are tiled including the garage. Picking out a tile is an art. Many places here have glazed or smooth tiles which is nice but impossible to walk on when wet. Rougher tiles are harder to keep clean so you will have to find a happy median. The main reason you need maids here is to sweep and mop the floors daily due to the dust. Remember, often you are living partially outdoors.
The tile roof is beautiful to behold and lets the hot air rise out of the house. Unfortunately it allows the rain to enter when the storm has any force or is coming down at an angle. Expats tend to like solid roofs which means an inner roof of zinc covered by tiles or using an artificial material that gives an appearance of tiles. Either of these methods prevents the hot air from escaping so strategic windows are needed or another method of ventilation. Why are roof vents so rare here?
Other factors affect the design of the home. Hot water is not as necessary in the warmer climate and air conditioning is not used as much as you would expect. One reason is that gas and electricity is much more expensive here. Solar powered hot water heaters are starting to appear. Do you really need to wire rooms anymore for telephone land lines? The answer is yes if your Internet is based on a phone line. There are outages of electricity and water so you may wish to plan for backup systems such as battery backup systems. In a development these may be moot issues or regulated by the HOA rules. We have surge protectors on almost all of our electrical devices but if I were to design a new home I would install a surge protection device that would protect everything. You must have surge protectors on every TV and most electrical devices. Get used to it!
Labor in Nicaragua is some of the cheapest in the world creating an opportunity to build a home that is not economically viable in the United States or Canada. This may include amazing arched ceilings, arched entry ways, arched windows, decorative concrete, stamped concrete, stained concrete and rounded corners. The ability to build an amazing home in Nicaragua is almost unsurpassed worldwide.
Unless in a development requiring you to use one of their designs and their construction companies you will need to find a reliable architect and construction company. This is not an easy task and one where you must speak to other expats for advice on who they used or possibly to find out who not to use. Again, you will hear horror stories about most companies but verify the story before you believe it. If we believed every story we had heard there would be no viable realtors, businesses or construction companies in Nicaragua.
Find out what they have built before, look at the building quality, time it took to build and check with the home owners on their opinion of the work. Get several quotes and do not just select the cheapest one. Ensure the building contract is clear and understood by all parties. Payment schedules are the opposite than in the states. In the states you paid for completed work after the initial deposit while here you usually provide the money up front for each step. It is rare to see mortgages or construction loans unless in a major development. You will encounter difficulties but building in Nicaragua can be very rewarding with a good contract, professional architectural plans and clear communication. Contractors usually charge at cost plus 20% but check all of their receipts.
Clear communication means you will want to inspect often and carefully. Two of our friends, one building a home and one building a condo, were surprised to find the room dimensions were radically different from the blueprints. The construction started from the back of the structure and by the time they got to the front there was 10 to 12 feet missing. One of the major reasons for the lower cost construction is that the cost of labor is very low and often, the quality will suffer since the only person with the construction knowledge is the supervisor. We know so many stories of walls constructed in the wrong location, missing windows or light switches on the wrong side of the room. Many of the construction companies boast of their custom doors and windows but it may be because they’re not sure what size those openings will be until the construction is complete.
If you are really strong of heart, you will have the house constructed while you are out of the country. If out of the country, make sure you receive photos or videos on a regular basis to verify when the progress payments should be made. This will allow you to stop construction and payments at any time if problems are not fixed. It is not unusual for the work crews to live near the construction until it is completed.
How long does it take to build your new home? Good question. The house across the street from us was torn down and completely restored with a swimming pool in just three months. Another one took eight months and the owner was excited it was completed so quickly. On average, it should take five to seven months assuming nothing unusual is encountered. You will encounter difficulties and surprises.
Hope we have not scared you away but you must be vigilant. If you are careful, you will have a beautiful home that you never could have built for the same price elsewhere.
Here is a link to the Nicaraguan building regulations in Spanish, of course:
https://www.dropbox.com/sh/zfbvrp8r48zu6ih/AADwSd_oZ1RrCuEPS8IUHntga?dl=0