Playa Hermosa, San Juan del Sur
One of my recent articles discussed the option to maintain two homes for very affordable prices in both New York and Nicaragua. More than just write about it from the US, I wanted to get on the ground to understand what are some of the real challenges one might face when owning property and living in a developing country.
Disclaimer
Before I get into that though, I understand that there are significant barriers to entry for many who may want to live in a developing country. The first is the language. If English is not the primary language of the place you are interested in, this is going to be the first and most obvious challenge. Luckily, I already speak Spanish, so in this case it’s not an issue for me personally but I recognize the challenge that one may face.
The second is already having a strong contact with connections to the region. There are ways one can establish this on the ground or at home but luckily for me I already had one. I learned about Nicaragua from a friend who is from there and his immediate or extended family already resides there or has moved back from the US. If you don’t have any local connection this is obviously a disadvantage initially, but being here, I also realize it is one that can be easily overcome with determination and networking within the expat community.
San Juan del Sur
First Stop – The Struggling Resort Town
My first stop was to the fishing village turned surf town of San Juan del Sur. Somewhat close to the Costa Rican border, this town was billed as an up and coming resort spot up until last year. It was drawing many tourists away from the traditional regional hub of Costa Rica, who were searching for that more affordable, less developed, coastal town as opposed to the tourist saturated towns of which much of Costa Rica had become.
However the development that seemed to be on the point of booming in the area, came to a halt after the “Tranque” or street blockages that came as the result of a student inspired uprising against the re-election of the current president Daniel Ortega. Without getting too much into the politics of the country or the region, the changing of the constitution to elect himself to another term and the perceived corruption of Ortega and his family, produced a few months of political violence between protesters, police and paid troublemakers. The conflict was put down when the army did not intervene and Ortega sent in bulldozers and paid mercenaries to take down the roadblocks and arrest many of the protesters. This short lived conflict spooked much of the expat and tourist community and they have not returned since.
Of course with volatility comes opportunity and is one of the reasons that even the formerly touristic areas have become extremely affordable.
Mirador Catarina, Masatepe
An Experienced Voice
Before checking into my hotel in San Juan del Sur, I reached out to the front desk to inquire about transportation options from the capital and was surprised to talk with someone with an American accent. When I inquired about her origins, and let’s call her Amanda (not her real name) for simplicity here, she explained that she was actually Canadian and had been living in Nicaragua for the past 8 years.
Once I arrived, I had the opportunity to sit down with Amanda and understand the reality of being an expat in Nicaragua.
Amanda explained that she had actually been living in the more rural North of the country for the past 4-5 years where she taught yoga and helped run an organic food themed hotel with her partner. They had sold the business for a good sum and bought a house in the area as she then continued to teach yoga and surf.
However the civil conflict changed things. Tourism in the north, which was already nascent, completely dried up, her relationship ended and she was forced to move to the more heavily touristic (by her standards at least) south in San Juan del Sur to seek work and start from 0.
Amanda explained that there were a number of developments that either stopped being built or now were being rented for cut rate prices. A new loft development she would be renting next month in front of the beach would be going for $400 a month.
Recovery Hour
Evaluating the Risks
As I mentioned in my recent post about living in Nicaragua though, I asked her about the risks of being away from your property for so long. “You have to be here” she said. She mentioned that there were a number of opportunities in the town for running business that expats had left in the country when they fled. In fact there were so many opportunities that she would be stretched too thin trying to meet everyone’s requests. It’s one reason she explained, that there were a number of empty store fronts and commercial space available in the town.
As for buying a place and staying there 6 months out of the year, she mentioned that a strong local network was key to keeping squatters and thieves out of such a place. Whether you hire local live in help to care for the home, or involve the local expat network in caring for the place or staying there themselves. Taking time to establish this network to ensure the ongoing safety of your place would be key.
We also discussed the topic of purchasing land that could later be developed. She mentioned a point that I had not considered previously: a source of water. Since connecting to the main water lines could prove slow moving or bureaucratic, having land with a fresh water source such as a well, a stream or a river was a key factor in determining if the land was viable.
In addition, the squatter factor cannot be ignored here either. In order to keep squatters off the land, another local contact suggested constructing very basic housing and renting it to a caretaker family until one is ready to build on the land.
All of this may sound like too much of a headache for some but when I found out that beachfront property could be bought for as little as $2.50 per square meter, I’m sure there are some who would be willing to find a way to mitigate the risks for such a price.
Playa Nacascolo, where many of the new developments are near San Juan del Sur
An Alternative to Buying and the Cost
The other alternative is just to simply rent, although you will be subject to the swings in the rental market, you wouldn’t have to worry about maintaining property and caring for it while you are away. However housing is not your only worry, you still would have to eat and to get around. For this reason I took a brief inventory of some of the prices
Currently the exchange rate from the local currency, called Cordobas, is about 32 to one US dollar. In many places dollars as well as Cordobas were accepted and when I saw prices on menus quoted only in US dollars I assumed it to be a more touristic and expensive place, and hence some price inflation. However for the most part, the list below provides a breakdown of most of the prices I experienced while in San Juan del Sur and the day I spent at a nearby private beach resort at Playa Hermosa.
I will add more to this table as I estimate the cost of basic groceries when I move on to my next location but essentially, if we just include the cost of going out to eat, taxis and fun activities once or twice a week, one can estimate spending at about $125-$150 per week, excluding rent phone and groceries. Including Amanda’s example of $400 monthly rent for a 2 bedroom 2 bath loft by the ocean and a $50 phone bill we can estimate that before the cost of groceries added in, expenses would be around $1,100 per month. Not bad when you consider that it costs many multiples of that just to make ends meet in much of the US.
Next post, I hope to go into further detail about the challenges and the benefits of trying to live as an expat here and show that anyone who has the means and the desire can make use of the disparity in the cost of living in developing countries and rich ones.
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