Baby Boomer Retirement in Nicaragua

by Kathleen Peddicord

Real estate prices in Nicaragua rose steadily through the end of 2006. With Sandinista Danny (Ortega) scheduled to re-take office at the beginning of 2007, though, and the U.S. real estate market beginning to tumble, investors began to pull back, taking a wait-and-see attitude.

Meantime, the tourists kept coming to this beautiful and diverse land, but, with so much uncertainty on both sides of the investment equation, most were content to enjoy the scenery...without staking a claim to a piece of it for themselves.

A little more than a year later, and the bad press initially surrounding the re-election of El Presidente Ortega is turning. Ortega is playing nice with the U.S. He is working to clean up title on 3,800 properties held by Nicaraguans. And he continues to support foreign investors' land rights. While most U.S. speculators are holding their sidelines approach to the Nicaragua market, the tourists are beginning to buy in again. Sales aren't as brisk as before Ortega's re-election, but they are trending up, especially near the tourist hubs of Granada and San Juan del Sur.

As unlikely as it may seem, surfers, especially in the wake of Ortega's re-election, have become a real estate market force. They don't seem to care who holds office...as long as the surf is up...and the surf off Nicaragua's south Pacific shores is considered five-star. Surfers have continued to come, to ride, and to buy, ongoing political events notwithstanding.

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We have to admit...we don't surf. However, we've been infatuated with Nicaragua for 15 years, a country working hard to set itself firmly on the path of peace, prosperity, and open markets. We're invested here ourselves and would have no reservations investing further today.

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For their part, retirees are drawn by a breathtakingly beautiful country of beaches, lakes, volcanoes, and pine forests, with vivid green parrots swooping through mangrove swamps. It has the same natural rain-forest beauty as do Costa Rica and Panama, only wilder and less explored. Sun-worshipping expats seeking a sybaritic beach life head to San Juan del Sur, a popular resort town on the Pacific Coast. Many others have gravitated to graceful, historic Granada, one of the loveliest colonial cities in Latin America, located along Lake Nicaragua, where they enjoy remarkable housing bargains and an easygoing lifestyle amid pastel buildings and welcoming cafés.

Four years ago, Darrell and Amy Bushnell, 60 and 54, moved to Granada from Charlotte, North Carolina, where Darrell worked in a large finance firm and Amy in home development. They purchased a three-bedroom, 3,500-square-foot colonial house with patio and pool for $180,000. They rent out one bedroom for $400 a month. "We wanted somewhere inexpensive," says Darrell, "and we looked at other Central and South American countries, but we kept coming back to Nicaragua, due to the cost of living, the beautiful country, and the gentle people." Darrell cautions that government corruption is a fact of life in Nicaragua, but he extols the opportunity for finding yourself: "You can live the tropical life in your dream house on the ocean, start a business in the mountains, or work with a foundation to help people and their children. Every day is an adventure."

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Nicaragua at a Glancee

Population	5.7 million (July 2007)
Gross Domestic Product (GDP)	$18.17 billion (2007)
GDP Per Capita	$3,200 (2007)
Inflation Rate	9.8% (2007)
Currency	Gold Cordoba (NIO)
Exchange Rate Versus U.S. Dollar	18.457 gold cordobas = 1 U.S. dollar (March 2008)
Language	Spanish (official)
Capital	Managua
Population of Capital City	1.7 million
Time Zone	GMT minus 6
Seasons	Tropical; rainy season lasts from June to December
International Dialing Code	505
Electricity	120V / 60 Hz; Plug Type: A (US style)
	Presidential Republic
Name and Party Affiliation of Current Leader	Daniel Ortega, Sandista National Liberation Front
Income Tax Rate for Residents	10% to 25%; 15% for all income earned within Nicaragua
Property Tax	0% to 1%
Capital Gains Tax	Taxed at income tax rate
Inheritance Tax	Taxed at income tax rate
Rental Income Tax	Taxed as income tax rate
Transfer Tax	1%, paid by seller
Sales Tax	15%
Restrictions on Foreign Ownership of Property	None
Local Chamber of Commerce	www.caconic.org.ni Rotonda Güegüense Managua Tel: Tel: (5052) 68-35-05
American Chamber of Commerce	www.amchamnic.org.ni Apartado Postal 202 Managua Tel: (5052) 67-30-99
Primary Exports	Coffee, beef, shrimp, lobster, tobacco, sugar, gold, peanuts
Residency and Visa Requirements	Tourist Visa: automatic 90 days upon entry Residency: permanent residence and investor's residence visas, including pensionado and rentista Citizenship: three years of uninterrupted, legal residence
Special Benefits for Foreign Residents or Retirees	No income tax on external income; tax-free import of household goods and vehicle
National Airline	None