Forget The Sandinistas: Time (Again) To Act In Nicaragua

June 10, 2008

Paris, France

PLUS:

n  Take Doña Violeta's Advice...Forget The Sandinistas...

n  A Love Story From Antipolo...

n  Internet Woes (And Creative Fixes) In Costa Rica...

n  The Caribbean's Most Closely Guarded Secret May Be Getting Out...

n  Top-notch Health Care In Managua...You Won't Believe How Affordable It Is...

n  "I Can't See Property Prices Staying This Low Much Longer"...

n  The Tourists Are Returning...Can The Investors Be Far Behind...

AND:

n  The Best Investment You Could Make In Nicaragua Right Now...

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"Forget about the Sandinistas. They're obsolete."

-- Violeta Chamorro, September 1989, when asked about her chances for defeating the Sandinistas in Nicaragua's first presidential election after the Contra War.

Dear Overseas Opportunity Letter Reader,

To the surprise of El Presidente Daniel Ortega and all Nicaragua, Mrs. Chamorro won that election in February 1990. The Sandinista Ortega stepped down graciously, and Doña Violeta began the work of rebuilding her country.

I visited Nicaragua for the first time three years later. Managua, thanks to the earthquake of 1972, the revolution, and the civil war, was a near-disaster zone. No reason to stick around (this is only slightly less true today).

Gringos like me migrated instead to the south Pacific coast, where speculators had already begun snatching up stretches of this country's primo beachfront, and to the inland colonial city of Granada.

In Granada, there was a single hotel, the Alhambra, with a long, breezy porch overlooking the city's central square. A rocking chair out front of the Alhambra has always been my favorite perch in this city...but, back in the early and mid-1990s, the hotel itself was nothing to write home about. Rusted fixtures in the bathrooms... cockroaches under the beds (the Alhambra has since been beautifully renovated, and today I heartily recommend it)...

Back then, Granada and Nicaragua both were short on amenities but long on heart. This country was pulling itself up by its bootstraps. In the towns and walking along the dirt roads, you saw men and boys in olive green military garb, sometimes carrying weapons. They seemed intimidating, until you stopped to speak with them. They talked openly of their desire for peace.

These Nicaraguans were tired of fighting, tired of watching their once-prosperous little country dissolve into economic chaos.

In the decade that followed, the transformation was remarkable. The gringos kept coming...and even began settling in. The speculating along the Nicaraguan Pacific Riviera went into overdrive. Sleepy Granada became a tourist hub, so crowded I'd often have to wait my turn for a rocking chair on the porch of the Alhambra.

Doña Violeta had been right. The Sandinistas had become obsolete, just like the political model they'd sought to follow.

That is not to say, though, that the Sandinistas--the party or the people--disappeared.

Indeed, the most famous Sandinista of all, Daniel Ortega, sits again, right now, in the seat of the country's presidency.

Through 2006, when Ortega was re-elected, Nicaragua seemed on the fast track to a big, bright future. Then, with Señor Danny scheduled to re-take office at the beginning of 2007 and the U.S. real estate market beginning to tumble, investors panicked and pulled back from this country.

A year-and-a-half later, what's the story? Ortega has played nice with the U.S. He has worked to clean up title on 3,800 properties held by Nicaraguans (questionable history of ownership of land in this country has been a key investor issue). And he continues to support foreign investors' rights.

In other words, Danny's done nothing to raise any alarms.

Nevertheless, investors, especially U.S. investors, remain cautious.

Like the investors, the tourists, too, took Nica off their radar screens in late 2006, following the election. But, unlike the investors, the tourists are returning. January through May is peak season in this country. January through May 2007 saw about 80,000 visitors from the U.S. and Canada, 320,000 tourists overall; January through May of this year saw 90,000 travelers from the U.S. and Canada (an increase of 13%) and better than 340,000 overall (6.7% growth...and more than the total number of tourists in 2006, prior to Ortega's re-election).

I don't have formal data on foreign investment in this country during the past two years (if you do, I'd appreciate hearing from you), but I can tell you anecdotally that the shine has been off this country's real estate market since the 2006 election results were announced.

For the past year-and-a-half, Nicaraguan developers I know have been reporting that sales are "slow"... "stagnant"..."down".... They've launched low-cost-of-entry offers ($30,000 lots in full-amenity developments, for example, something that, two years ago, like communism in this country, seemed to have gone the way of the Dodo)... They're promoting developer financing... They're uncharacteristically open to offers...

Ortega can't run for re-election again in 2011. Meantime, he seems to be behaving as well as could be expected...better even...

And, meantime, it's more of a buyer's market in this country than at any time in the past decade. That alone is good reason to be nosing around Nicaragua right now.

But there are better reasons.

Politics have too long distracted people from recognizing what this country has to offer. Take Doña Violeta's advice and forget about Ortega and the Sandinistas. Two decades ago, they tried to make a new Nicaragua. Fortunately for you and me, the old Nicaragua, the largest but least-visited nation in Central America, lives on.

This Nicaragua is a beautiful country with loads of sunshine and two long coasts, one of white sand, one with wildly crashing surf. It is a land of lakes and volcanoes, of cloud forests and tropical jungles, of cattle ranches and Spanish-colonial cities, of rare orchids and white-faced capuchin monkeys.

It is also a very affordable place to call home.

Several weeks ago, I introduced you to Jay Snyder. About five years ago, he and his wife discovered just how beautiful and just how inexpensive Nicaragua can be.

As Jay tells it, "I planned a visit and enrolled in a Spanish-language immersion program. I lived with a local Nica family in Granada and went to Spanish classes each day for a week. Then I took off to see the rest of the country--remote villages, coastal towns, planned developments... With only three days remaining on the trip, I felt a strong desire to return to Granada. So I did. And, back in the city, I took the plunge. I began speaking with real estate agents.

"Walking around Granada with the agents, I realized all my senses were satisfied. I liked what I saw, what I smelled, what I heard, what I tasted, what I felt...

"I place a lot of value on the sixth sense, too--on intuition. And I liked what my gut told me about Granada. The place felt right, and I felt at home.

"The truth is, retirees in the States right now face a serious dilemma. It's impossible, really, for them to live on Social Security. And the cost of quality retirement living options has exploded. The current meltdown in U.S. housing costs doesn't change this fact. Most retirees can't afford a retirement home.

"Nicaragua seems to offer exactly what people like me are looking for--an affordable, quality lifestyle bundled with the chance to start over..."

Granada is this country's number-one tourist draw. Nobody visits Nicaragua without visiting Granada. I'm a big fan of this postcard-charming colonial town, just inland from Lake Nicaragua and at the foot of the sleeping volcano called Mombacho. I'm not sure, though, that I'd recommend it today as the best place in the country to settle.

No question in my mind, if you're ready to move from your sideline position and make an investment in Nicaragua, Granada is the place to do it right now. It will always see more tourist traffic than anywhere else in this country. More hotel room nights, more renters, more restaurant diners, more souvenir shoppers...

But because Granada is a tourist town, there's no avoiding the tourists and their trappings, which are noticeably more present every time I pass through.

On the other hand, if you're looking for a more "real" Nica living experience, go north...to Leon, where the living is not only more Nica...it's also more affordable. In Leon, you're distant from the tourists and the established expat communities...and distant, too, from the inflated economies that follow them.

In Leon, life goes on as it has in this country for centuries. Beyond the fields of sugarcane and corn that surround the city, and only a 20-minute drive away, is the coast, meaning you could enjoy the best of colonial city living with weekends at the beach.

And you could live well and comfortably here, in the second-oldest colonial city in the Americas, on as little as $954 a month if you invest in one of the city's grand old colonial haciendas yourself...or as little as $1,300 a month if you rent. Correspondent Christian MacDonald has taken out his sharp pencil again and drafted a complete and detailed budget for your new life in Leon.

Nicaragua Budget.

And note: Nicaragua uses the cordoba, which, unlike most any other currency you could name these days, has been falling faster than the U.S. dollar. While the U.S. expat's buying power has been steadily reduced worldwide, in Nicaragua, it continues to expand.

Kathleen Peddicord

P.S. Jay Snyder and his wife couldn't find the housing option they sought when they decided to settle in Granada, Nicaragua...so they created it. They bought a plot of land in the center of town and built eight condos. They've made something special. Take a look: Condos de Xalteva.

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FROM THE MAILBAG:

More from J. Massey in the Philippines:

"Twenty-two years ago, I visited the Philippines on the invitation of a friend. I never thought I'd travel that far...

"I stayed in a town called Antipolo, 20 kilometers from Manila. There I met a beautiful woman called Felisa. She showed me around, and I soon found out how friendly the people were. They were poor but so friendly and honest.

"I returned home, and Felisa and I continued to write and to phone one another. She was very educated and taught nursing. I invited her to the UK, and, to cut a long story, short, we have been married 20 years.

"We've returned to the Philippines every year on holiday to escape the British winters. The country is beautiful, and the cost of living is at least a third of the cost of living in the UK. Your pound goes a very long way.

"Three years ago, we looked for a house and found a three-bedroom, two-bath detached home in Felisa's home town. We paid £29,000 for the property and about £1,000 in fees.

"Our water bill is £4 per month. Council rates are about £70 per year. Electricity is the most expensive, because of the air conditioning. It costs about £25 per month.

"We have no heating or gas bills. Transport is very cheap if you use local means-jeepneys or trikes, for example, or taxis. And food is cheap if you shop at the local markets, which open at 6 a.m.

"This year I've applied for and been granted a resident's visa. You can get a retiree visa easily by depositing £25,000 in an interest-bearing account.

"I can't see property prices staying this low for much longer, and, indeed, prices are rising.

"This is a wonderful country where age is respected and life is laid-back..."

ALSO RIGHT NOW:

Granada is the Nicaraguan market to buy into right now. Best idea? Position yourself just outside the city...

With the tourists returning in good numbers, Granada is the Nicaraguan market to buy into right now.

Better, though, I'd say, to put yourself just outside Granada. Situate yourself just beyond the city limits.

This way, you get the amenities and the conveniences of Granada--shopping, restaurants--but can retreat from the tourists and their trappings when you want some peace and quiet.

Just outside Granada is the crater lake Laguna de Apoyo, one of the country's greatest natural attractions. A friend, Jeff Cassell, began developing lots overlooking Lake Apoyo two-and-a-half years ago.

These aren't just any lots overlooking the lake. These lots, and the community they're part of, sit at the end of a paved road that leads directly into the center of town. You could scoot into Granada in 10 minutes or less...anytime you've a mind to.

I invested in Jeff's first offering, a development called Vistalagos, two years ago. My lots at Vistalagos are today worth two times what I paid for them.

Jeff has written to tell me he's preparing for his next effort, a new development overlooking Lake Apoyo called Twinwaters. And he has set aside a small area for a pre-release offer. The 12 rim lots in this section are available, for a limited time, at the discounted pre-release price of $64,900. Jeff will list these lots at at least $89,000 at launch, which will happen as soon as his infrastructure is in.

Six of Jeff's pre-launch lots have sold (two apiece to the first three would-be investors Jeff took to see the site recently). Therefore, six remain available.

Jeff reports, "I've installed the electrical and water systems. Electric is 100%, and water is 90% ready.

This week, we are building a 30,000-gallon holding tank..."

In other words, Jeff is pushing ahead quick, and the pre-launch pricing won't be available long.

This is a beautiful spot, and Lake Apoyo is a special place. Take a look here. 

For more information:  

ApoyoRimLots@LiveandInvestOverseas.com.

"I'm not saying they're coming in droves, but there are more foreign investors in Venezuela right now than I've ever seen before..."

"Foreigners are buying in Venezuela at a greater rate than I've seen at anytime since my first visit to this country a few years ago," writes correspondent Don Ellers.

"Along the eastern coast and, of course, on Margarita Island, which has always been a magnet for foreigners. I'm not saying they're coming in droves, but there are more Gringos, Euros, Aussies, Kiwis, and Canadians than I've ever seen before.

"The big question mark for this country, of course, is Chavez, and, frankly, I don't see him running wild. He comes across as a nut, especially when dealing with Bush, but that's not so unusual for a Latin American president. We've seen that before...

"There is still a lot of anti-Chavez sentiment, even in Venezuela, but there's a lot of anti-Bush sentiment in the States, as well. More to the point, looking to what lies ahead for this market, Bush and Chavez both are in their final terms of office. And Bush is nearly out the door.

"The term-limits referendum in Venezuela last year was a turning point. When they voted against removing term limits for the presidency, the people of this country made it clear that they don't want a dictator for life.

"The slogan for the Venezuelan Tourism Department used to be, 'Venezuela, The Most Closely Guarded Secret Of The Caribbean.'

"I'd say that's still true. This is the earliest-in market right now in the region. If the new U.S. president makes nice with Chavez (McCain maybe...Obama definitely), things will pick up in this country...and then it'll be only another couple of years until Chavez is out."

Don is happy to answer questions about living and investing in Venezuela. Reach him here:  

Venezuela@LiveandInvestOverseas.com.

Sometimes, living abroad, you've got to get creative. Friend David Stubbs, a British expat living in Costa Rica with his family for the past four years, explains...

"High-speed Internet. You can't live without it these days...especially if you're living and working overseas. Access to e-mail, websites, and VOIP technology is critical if you want to stay in touch with family, friends, and business interests in other countries.

"When we moved to Costa Rica four years ago, we chose a home in the hills, in an area with no high-speed Internet access. We couldn't bear the idea of living with a dial-up connection, so we got creative. We asked a friend living in the valley below to take out a subscription (for us) to a cable TV service that offered high-speed Internet as an upgrade.

"This wasn't cheap, as we had to pay for the cable TV (which we didn't use), in addition to the Internet service.

"Anyway, our friend took the signal from the cable modem and (through some clever technology) converted it and beamed it up the hill to a small receiver on the side of our house via microwave. This worked fine. The only downside was that we weren't able to get reimbursed by my wife's employer, as the service was not official, and we couldn't provide receipts.

"Some time later, I saw a flyer advertising a new service from Racsa, the monopoly Internet service provider in Costa Rica, called WiMAX. I followed up with the WiMAX people, who sent someone out to check the suitability of our location. We passed the test, and, for $800, we were able to install WiMAX high-speed Internet service. Great. Our monthly bills were less than before, and we were official, finally, so we could claim back part of the cost as a business expense.

"At Christmas, we moved. Internet in the new house was via a local cable TV company. In the dry season, it worked fine. But as soon as the rains started, our service pooped out. Water in the cable joints...

"We're applying again for the WiMAX service..."

For more on how WiMAX works: WiMAX.com.

What happens if you get sick in Nicaragua? Lori Estrada, an orthopedist living and running a clinic in Managua for 11 years, says, "Don't worry. You won't believe how well you'll be taken care of...or how inexpensive the care will be."

"It's easy to be a happy practicing physician in Nicaragua," writes Lori, who has been living in Managua with her husband and three children since 1997.

"It's a pleasure working in a place where we don't have the hours of paperwork or the insurance headaches that physicians in the States have, for example.

"If I order an MRI for a patient, he can be back in my office, films in hand, two hours later (including travel time). And the cost to the patient, in part because, again, we don't have the same insurance burdens, is only $300.

"To give you more of an example, here in Managua, an ultrasound costs $15, as do X-rays and EKGs. A mammogram is $26. A CAT scan is $120, and a full-body bone density scan is $90.

"An expat living here told me a story recently. At 9 p.m. one night, she began feeling pain in her abdomen and chest. By midnight, she was in agony and went to the emergency room at the new Vivian Pellas Metropolitano Hospital.

"Her husband pulled up to the door of the ER, where the woman was met by nurses who got her into a wheelchair and took her straight to a bed where doctors began attending her. They didn't ask her for insurance cards or how she intended to take care of her bill. They simply began treating her.

"Because she has a heart condition and high blood pressure, as well as the abdominal pain, a cardiologist and gastroenterologist both were summoned.

"After an EKG, blood work, ultrasound, and X-ray, they determined that the woman was passing a kidney stone. She was admitted to a private room for four nights to help control her pain and to dissolve the stone.

"The specialists checked in on her three times a day. She told me that she had never experienced treatment like that in any hospital anywhere else in her life.

"When I asked about her medical bill, she replied, 'You'll never believe this. The total was $1,800 for everything-including the hospital stay, the emergency room, the doctor consultations, the lab work, the prescriptions...'