Last week I wrote about farmland in South Africa…
And how it’s taken a pounding thanks to a radical politician who is threatening to take farmland from white farmers without compensation.
While I don’t think it’s time to buy South African farmland yet – that situation can get MUCH worse before bottoming – it’s always smart to keep an eye on a country in crisis.
And today, there’s an ongoing tragedy in Nicaragua – a beautiful Central American country just above Costa Rica.
Nicaragua has emerged as the next, Central American tourism success story (after Panama and Costa Rica’s rise to prominence)…
The country made headlines in the Wall Street Journal, New York Times, etc. as the next hip spot – popular for eco-tourism, including world-class surfing.
Auberge, an ultra-luxury hotel group, even took over management of a coastal resort there called Mukul.
San Juan Del Sur – a sleepy fishing village in the 90s – is now a mecca for surfers.
And Costa Esmeralda (Emerald Coast) just north of San Juan, attracts wealthier travelers with luxury properties that are 50% cheaper than Costa Rica.
But everything changed in April.
Daniel Ortega, Nicaragua’s president, has ruled since 2007. He also previously led Nicaragua from 1979-1990 – after his Sandanista party overthrew the Somoza dictatorship in a violent coup.
Since re-entering the presidency, Ortega (and his Vice President wife) have gained dictatorial power… and lost tremendous popularity with Nicaraguans.
Then, in April, Ortega announced pension reform, both raising taxes and slashing benefits. As an aside, this is a topic we regularly discuss in Notes.
Nicaraguans protested in the streets, demanding Ortega’s resignation.
Ortega answered with violence. More than 300 protesters have died since April.
It’s a scary situation. And five months later, it’s not settled. Ortega still has troops patrolling the country in search of protesters.
As a result of the violence, tourism in Nicaragua has been crushed.
Thousands of Nicaraguans have lost their jobs in tourism. Many hotels and tour operators have closed.
Bryan McMandon – a good friend of Sovereign Man and a successful realtor in Nicaragua – tells that the past few months have been brutal for his business.
When I shop for real estate deals around the world, I usually start with luxury real estate.
In Nicaragua, many property owners aren’t willing to significantly drop their asking prices yet.
However, a beachfront property in a premier development on the Emerald Coast recently went under contract for $400,000 – almost 50% off the $750k asking price.
And more deals like this are happening each week.
While we’re not seeing tremendous value in sales right now, you can absolutely steal a luxury rental…
Many property owners in Nica rely on supplemental rental income to maintain their vacation homes. And with no income coming, many are getting desperate.
All of Bryan’s rental listings are offering 20% discounts from the list price.
And I searched through AirBnB, asking the owners in San Juan Del Sur for a 50% discount for a weeklong stay this month.
I found lots of great deals, including a boutique loft next to the beach with a private swimming pool. The asking price for seven nights was $605. The owner accepted $420 (a 30% discount).
I also looked at a spectacular 2,800 sq. ft. ocean-view villa just outside San Juan with an initial ask of $1,450. The owner initially agreed to a 50% discount, then one hour later offered me the property for $630 (a 56% discount).
So if you’re an experienced traveler, it may be worth a trip to Nicaragua for a discount vacation. You can definitely get great deals on gorgeous rental properties.
As for buying in Nicaragua…
I don’t know if 40%+ discounts are quite cheap enough.
But if you’ve been looking to buy in Nicaragua, now is a great time. And, to be honest, Nicaragua is a great option for a lot of people.
If you’re from North America, it’s close and you can get nonstop flights.
China is also throwing tons of money at the country.
And the infrastructure is improving dramatically. The Emerald Coast just got its own airport… so you can fly there from Managua, the capital city – before, it was a two-hour drive.
Mukul, the resort I mentioned earlier, was built by Nicaragua’s richest man, Carlos Pellas. So the country went out of its way to help match his investment in the area, including paving the roads from the highway to the beach.
Nica offers a lot of the benefits of Costa Rica at a much lower price. There are beautiful communities, great beaches, friendly locals, plenty of cheap help.
But that obviously comes at a certain cost – mainly the political risk.
If you’re just looking for cheap, beachfront property, there are still lots of other places in the world – Thailand for example.
I also think Chile still offers some of the best deals on beachfront property in the world, especially if you’re into surfing. Ecuador is also pretty cheap.
But if Nicaragua has been on your radar, it may be worth a trip today.
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