I have lived in Central America for 10 years running two large real estate brokerages. We’ve helped hundreds of investors find good value property investments across the region and worked with countless real estate developers. Over the years we’ve identified 6 key attributes that successful investors share. Some of them are relevant to all real estate market, while others take into account the local context of investing in Central American real estate.
1) The most successful real estate investors don’t assume that the local markets in Central America operate in the same way as US or Canadian markets. They realize that while the terminology may be the same – there are real estate agents, closings, title deeds – there are some important distinctions. For more on how the markets operate on the ground, check out this site, and see point 2 and 3 below.
2) The best investors quickly take into account that countries such as Costa Rica, Belize, Panama and Nicaragua don’t have a Multiple Listing Service. This means that you can’t expect to be able to access all properties available for sale from a single source or real estate agent.
3) Successful property hunters understand that you don’t need to be a formal real estate agent to sell property in Central America. In fact your hairdresser, taxi driver or receptionist may in fact be your best contact for real estate opportunities. As official property statistics are not published, it can take time to get a good handle on what constitutes value, so take your time.
4) Savvy investors buy only what they see. They discount the plans for an improved road, a new golf course, marina and so on, but only factor the inherent value of the property into the price. Having said this they are always on the look out for properties located “in the path of progress,” where tourism numbers are increasing and infrastructure improvements have started.
5) Prudent investors hire an independent real estate attorney to conduct their due diligence and represent them at the closing. They realize that as property contract are written in Spanish (the exception is Belize which is an English speaking country) they need their attorney to be fully bi-lingual.
6) Even though title insurance is not a requirement when purchasing property in Central America, most experienced investors decide to take out a policy. This has two benefits: First if problems arise subsequent to purchase these can be referred to the title insurance company and second, applying for insurance requires the investigating attorney to dig deeply into the property history, so any potential problems should be highlighted prior to the closing.
It’s currently a buyers market in Central America with some tantalizing property opportunities available. Our advice: take your time and follow in the footsteps of real estate investors who have already been successful in the region.