CATCH THE WAVE
Surprise! The best real estate buys aren’t where you might expect

Suzan Haskins has a tip for people interested in finding the world’s undiscovered beachfront property: follow the surfers. Long before any condo or resort developers arrive, surfers stake out remote beaches in their quest for good waves, says Haskins, who is the Latin America editorial director for International Living. “The surfers come first and then the mainstream follows,” she says.

During the past decade or so, the surfing crowd has been moving in to typically unexpected places like the Central American countries Nicaragua, Panama, and Honduras, as well as the Dominican Republic in the Caribbean. Even today, the beachfront idyll has yet to be disturbed in some of these spots. “The thing about Nicaraguan beaches is that they are just deserted. You can walk for miles and be the only person on the beach,” says Haskins, who recently relocated from Panama City to San Juan del Sur, an increasingly popular destination on Nicaragua’s Pacific coast.

Lately, though, word has spread well beyond surfer and backpacker circles about the appeal of these little-known beachfront escapes, prompting a wave of construction aimed at second-home buyers and retirees from North America. A number of factors have coalesced to spur this beachfront real estate boom. For one thing, American baby boomers, a generally adventurous group with significant amounts of disposable income, are far more likely than previous generations to consider a second home or even retirement outside the United States.

Perhaps equally important, particularly for those focused on a second home as an investment, is the relatively lackluster appreciation in recent years of vacation getaways in traditional U.S. markets like Florida, California, Nevada, and Arizona. “We have a phenomenon in the United States that occurred in 2006; the four principal second-home markets have gotten pretty flat,” says Mitch Creekmore, a senior vice president and director of business development f or the Houston-based real estate information and transaction management company Stewart Information International and co-author of the book Cashing In on a Second Home in Central America. “Second-home buyers still have the income and still want to invest, and they’re looking at markets outside the United States. And certainly Central America is viable.”

It has become more viable because the real estate markets across the region have matured. This makes it easier for foreign investors to get secure title insurance and, increasingly, mortgage financing. Michael Skalka, chairman and CEO of Stewart Information International, also points out how easy it is to get to and from these countries, and how welcome you are once you arrive. “And we are so spoiled in Houston. We can get anywhere in the Central American region in two and a half hours to four hours max,” he says.

Below, you’ll find a sampling of some of the least known yet most promising beachfront second-home markets in the hemisphere.

Nicaragua: Biodiverse and Beautiful

Aram Terry originally went to Nicaragua with purely altruistic motives. After graduating from college, the Nashville, Tenn., native spent two years in Nicaragua with the Peace Corps working on small-business development. But Terry was so taken by the country that when his Peace Corps stint was over he decided to stay and open his own small business: Aurora Beachfront Realty, a real estate brokerage specializing in oceanfront vacation property.

For Terry, the reasons to stay and build a life and a business in Nicaragua were compelling. For one thing, he found the country to be well stocked with natural treasures, like rain forests, active volcanoes, and, of course, beaches. “The southern coast to me is the most attractive part,” says Terry, whose company is based in San Juan del Sur. “It’s really hilly and there are these rocky bays with white sandy beaches. You have the lakes close by, and it creates a constant offshore breeze.”

It’s not just surfing that attracts potential second-home buyers. The reef off the country’s Caribbean coast attracts divers from around the world, and not far inland from San Juan del Sur is Lake Nicaragua, a magnet for adventure travelers looking to kayak, hike, mountain bike, or simply relax and explore Granada, a well-preserved colonial town on the lake’s shores. In total, 17 percent of Nicaragua’s land is devoted to nature preserves, and 7 percent of the world’s biodiversity can be found in this relatively small nation. This bounty of attractions and activities is enticing North Americans to purchase beachfront second homes in Nicaragua.

Financing Considerations