Why We Think It’s Time To Take A Fresh Look At This Longstanding Favorite
“Forget about the Sandinistas. They’re obsolete.”
That was Violeta Chamorro’s advice in September 1989 when asked about her chances for defeating the Sandinistas in Nicaragua’s first presidential election after the Contra War. To the surprise of sitting 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 at the time to stick around Nicaragua’s capital city back then. Gringos like me migrated instead either slightly south or west, to the Pacific coast, where, by the early 1990s, speculators had already begun snatching up stretches of this country’s primo beachfront, or inland, to the colonial city of Granada.
Visiting Granada for the first time during that initial scouting trip in 1993, I found a single hotel, the Alhambra, recognizable (still today) by its long, breezy porch overlooking the central square. A rocking chair out front of the Alhambra remains the best perch in this city.
While Granada and Nicaragua both historically have been and can still be short on amenities, they have always been long on heart. This country when I discovered it was pulling itself up by the bootstraps. In the towns and traveling along the dirt roads back then, 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, worn out by decades of watching their once-prosperous little country dissolve into chaos.
In the years 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 you’d sometimes have to wait your turn for a rocking chair on the porch of the Alhambra. Doña Violeta, it seemed, had been right. The Sandinistas had become obsolete, just like the political model they’d sought to follow, replaced, it appeared for some time, by property investors, foreign retirees, and adventure-entrepreneurs. Through 2006, Nicaragua was on the fast track to a bigger, brighter future.
That is not to say that the Sandinistas—the party or the people—had disappeared. In fact, the most famous Sandinista of all, Daniel Ortega, sits again, today, in the seat of the country’s presidency. How did that happen?
You’d have to ask the Nicaraguans. They re-elected him, putting him back in office in 2007. And, as a result, all those investors, retirees, and entrepreneurs who had tied their dreams to Nicaragua’s post-Sandinista future panicked. The panic deepened when, in 2011, Ortega adjusted things so that he could run for a consecutive term as president, something that had previously been mandated against in the country’s constitution. Ortega ran again…and was re-elected again. Again, you’d have to talk to the Nicaraguans to understand the thinking behind this. It’s a mystery.
Meantime, in 2008-2009, U.S. and world real estate markets began to tumble, compounding investor panic and creating a perfect storm of negative influences that succeeded in nearly annihilating Nicaragua’s property market. The whole of Central America was hit by the global recession, but Nicaragua was hit harder than its neighbors. Historically, the majority of foreign property buyers in this country have come from the United States and Canada. In the past, most of these buyers leveraged property assets back home to find the money to acquire new Nicaraguan assets. When, post-2008, that became an unrealistic option, Nicaragua’s buying pool all but evaporated.
This is changing.
I believe we are just this side of the bottom in this market, and the bottom, as you know, if you can identify it, is the place to buy. Market timing aside, when it comes to real estate, Nicaragua boasts inventory with intrinsic global value: Pacific coastal real estate reminiscent of the best of southern California.
Right now, values along this country’s long and dramatically beautiful Pacific coastline are well down from their peaks, and developers are uncharacteristically open to offers. It’s possible to buy a lot in a full-amenity development for as little as US$30,000, sometimes even with developer financing.
Meantime, back in Granada, Nicaragua’s other key expat and investor market, it’s possible today to buy one of the small Spanish-colonial houses the city is famous for, for as little as US$40,000 or US$50,000. (More details on this tomorrow.)
Politics have too long distracted people from recognizing what Nicaragua has to offer. Take Doña Violeta’s advice and forget about Ortega and the Sandinistas. Three 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 (including two of the oldest cities in the Americas, Granada and Leon, both classic colonial towns with shady plazas and centuries-old Spanish-colonial architectural gems), of rare orchids and white-faced capuchin monkeys, and, most recently, of a new-and-improved foreign retiree residency program that is not only competitive with the best on offer elsewhere but also the world’s cheapest.
Perhaps, though, what struck me most my first visit to Nicaragua years ago and what has continued to draw me back to this country all these years since is the spirit of the Nicaraguan people. On my first visit, I met a young Nicaraguan man, maybe 20- or 22-years-old.
“When I was very small,” he told me one afternoon, “the soldiers came for my family. It was the middle of the night. We were all asleep inside. The soldiers were in a pickup truck. They stopped out front and came to the door. They woke us all up and told us that our house was needed for the revolution. In the name of the revolution, they told us, we had to get out.
“We all climbed into the back of their pick-up truck, and the soldiers drove us into the mountains. They left us there, my whole family. We had nothing with us. But my father made us a place to live…and we survived.
“That is our past,” the young man told me in perfect English. “But it is not our future.”
This young man, like many others in this country, had taught himself to speak English by watching American television (“mostly MTV,” I remember him explaining).
Thinking practically, Nicaragua’s big advantage is its cost of living, which is among the lowest you’ll find anywhere in the world you might actually want to live. The Ortega Factor has frightened off many would-be retirees and expats looking for a budget destination, but not all. Both retirees and tourists in search of low-cost adventure continue to make their way to this country, which offers an affordable, quality lifestyle bundled with the chance to start over.
For all these reasons, we’ve planned our first-ever Live and Invest in Nicaragua Conference for Nov. 19–21. Lief and I are hopping on a plane this weekend to do some pre-conference scouting. For the event itself, we’ll be joined by longtime friends, contacts, and resources in this country, the people who have helped us to make all the investments, both in real estate and in business (we had an office in Granada at one time), we’ve made in this country over the years.
We’ll also be joined, as we are for every conference, by expats currently living and retired in this country I fell in love with at first sight as a young girl and that I can’t wait to return to later this week.
Continue reading: Retire Overseas Conference Attendees Now On Their Way To Panama