Real Estate in Nicaragua is good but how good?
International real estate investors in search of the next
big thing need to look towards Nicaragua. Its western coast
is on the edge of a property boom and the region dubbed as
the safest place in South America is ripe for investors.
 
A little known fact is that Nicaragua has one of the
strongest economies in Central America and has made
significant progress away from the turbulent 1980s. There
are virtually no barriers to foreign ownership of property
and there are many great deals to be had. Having said that,
a buyer should proceed with caution because practices are
still underdeveloped.
 
A buyer may use an agent, who can help negotiate the price
and will have a better understanding of the area. Agents
fees are negotiable, but typically range from 5-10% of the
selling price and are usually paid by the buyer. Also, a
local lawyer is a necessity when researching the title.
 
Property prices are increasing  international real estate
investors have seen returns upwards of 60% on purchases in
key ‘hotspots' since 2000. Property prices have been rising
by an average of 20% per year for the past four years and
developments are springing up along the Pacific coast, in
historical Granada and the Great Lakes.
 
Most properties in Nicaragua have reasonably clear titles,
but there are some that should be avoided. Properties that
were confiscated in the 1980s do not always have a clear
title, and those that have agrarian reform titles or
supplemental court ordered titles should probably be
avoided.  Once the buyer has found a property, then the
buyer or agent negotiates with the seller. After a price is
determined, the buyer places a non-refundable deposit on
the property from 5-15% of the selling price. The buyer's
lawyer will then check the title and it is a good idea to
have a property inspection and survey done as well. The
lawyer will request a Free of Lien document from the Public
Registry Office, which will show any impediment to sale as
well as the name of the real owner.
 
If the lawyer verifies the property title, then you can
proceed to closing on the property. A new title, or
Escritura, will be drawn up with the owner as the new title
holder. The seller signs the deed and the final payment is
made, often in cash. After this, the buyer's lawyer will
register the property in the new owner's name. Upon
registering the property there is a .5% registration fee
and 4% transfer tax due. Once the property is registered
then the new owner is the official title holder.
 
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 mix of healthy economy, low house prices and a
government bending over backwards to help you invest makes
the region a very good place for overseas buyers.
 
 
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Nicholas Marr is a lifetime overseas property investor and
CEO of Marr International Ltd a UK based property marketing
company that is responsible for international real estate