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Latin America Investment News on Viva Tropical

Beware of Sunshine Fever: How Not to Buy Property in Central America

Article Summary:

There are plenty of lists giving you straight talk on “the do’s” for buying real estate in Central America….but no one really talks about “the do nots”. So we have gathered up a few “do nots” to help you along in your journey to upgrading your lifestyle to your Central America home.

Photo Credit: World Property Channel

Original Article Text From World Property Channel:

How Not To Buy Property in Central America

Moving overseas to a country where your dollar goes further is perhaps the most radical way of slashing your living costs and upgrading your lifestyle. From my vantage point in San Juan del Sur, Nicaragua, where I have been working in the real estate sector for more than a decade, I’ve seen a marked shift from the “speculator investor” of the early 2000s looking for a quick flip to the post-crisis “lifestyle investor” looking to relocate overseas and enjoy a higher standard of living than would be possible back home.

But in these dollar-stretching lands of cheerful promises and excited real estate pitches, it’s easy to get caught up in the dream of overseas home ownership and ignore the cold facts and hard truths.

Beware the “sunshine fever”
You see, there’s a contagious fever that you can catch when exploring property options in a foreign country. Called “sunshine fever” or “land fever” it normally starts when you’re standing on the beach, wiggling your toes in the soft sand, watching the sun slowly setting over the ocean.

The fever builds as the property developer reveals the price of an ocean front lot a few steps from where you are standing and points out the planned clubhouse, the boardwalk, the spa and … gasp … the site for the future golf course. Then over dinner, as you drink the local rum, eat the fresh fish caught only a few hours before and enjoy the easy-going hospitality, you become well and truly hooked.

And why not? The beaches of Belize, Costa Rica, Uruguay, Panama, and Nicaragua, to name just a few popular international markets, are beautiful. The ocean water is warm year-round, the local culture exotic and welcoming and the prices (both for property and day-to-day living) far lower than back home.

It’s no wonder you get hot under the collar and feel a strong urge to secure that last available lot on that gorgeous stretch of sand. After all, they’re not making any more beachfront are they?

Slow down
However tempting the idea of owning the first slice of paradise that seduces you, it’s important to take things slowly. You don’t want to make a feverish decision that you’ll later regret. The key to securing a profitable investment in a foreign country is to take all promises, anecdotes and assurances with a pinch of salt, however much you want them to be true.

Truth is, in the absence of reliable statistics in many foreign real estate markets, it can be difficult to distinguish a good deal from a poor one. You won’t be able to get hold of data such as market comps, days on the market or price trends that investors use to drive their investing strategies in more mature markets.

You’ll only be able to cultivate a good nose for value by carefully triangulating information you receive from different sources; talking to everyone you meet about the property market (without taking everything you hear at face value) and (ideally) building your own spreadsheet of comparative prices.

All of this takes time; which is why you need to slow down and allow all vestiges of land fever to subside. By all means let your emotions flow as you enjoy the romance of buying a property overseas, but balance this with the numbers and the cold facts.

Buy only what you can see
If there is one piece of advice to take from this article, it’s this: Only buy what you can see and touch. And I mean that literally.

I’ve been following the market in Central America since 2002 and visited dozens of planned real estate communities with impressive master plans complete with beautiful renderings and glossy brochures. As the developer rolls out an over-sized map of the master plan and you scan the beautiful vision, it’s hard not to feel a tingle of excitement about what could be created here… and what your life could be like if you lived here.

But, no matter the good the intentions of the real estate developer and genuineness the promises, things don’t always go as expected. This is evidenced by the planned clubhouses, docks, marinas, golf courses, wellness spas, hotels, gyms, boardwalks and tennis courts that are yet to be realized. Some master planned developments in the region have been stalled for months, others for years.

So as you stand on the beach wiggling your toes and watching the sunset ask yourself whether you’d be happy with owning an oceanfront lot without the clubhouse, without the spa and with nowhere to play golf.

Are the sand, sun and sea enough? In many instances they are.

Just make sure you are making your purchasing decision based on the inherent value of what is there. Don’t get seduced by (and then end up paying for) a future vision or a planned set of amenities and services that may never come to fruition.

Link to Original Article:

From World Property Channel

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