Central America has its fair share of emerging destinations offering ground floor investments as well as more established locations that are normally associated with less risk. One of the first things to ask yourself when looking at opportunities in Central America is “What is my appetite to risk?” The answer to that question will define the investing approach that makes most sense for you.
Generally property in ‘emerging’ areas that are not well serviced with infrastructure and lack amenities are higher risk purchasing destinations than areas that are more developed. But you’ll also find seasoned investors explaining that it’s in these areas that you’ll find the greatest potential for upside. But predicting when an area will start to develop, when roads and amenities will be built is very difficult indeed.
The more established and mature areas are positioned at later stages of the ‘development curve’. These have good quality infrastructure, you’ll find amenities and services and a sense of community that comes with a mature second home market. Risks are lower but often so is the potential for rapid capital appreciation. “Lifestyle buyers’ and retirees looking for a place they can enjoy right away often gravitate to these areas.
Many investors in Central America look for a middle road. They seek out locations that are not fully developed but that also can’t really be classified as ‘emerging’ either. They head to places like Placencia in Belize where the market is less developed than Ambergris Caye real estate the more famous location for investing, but is still very much on the tourism and investment map. Bocas del Toro in Panama would be another example. These are not really ‘ground floor’ investment destinations but at the same time there’s a sense that more developments (better roads, a new airport?) are coming down the line.
Whatever you investing strategy, right now as a buyer you’re firmly in the driving seat. Prices have fallen from their boom highs and sellers are motivated. Real estate in Nicaragua is probably the most affordable in the region, with real estate for sale in Costa Rica the most expensive. Spend the time to clarify your objectives up front and move forward with confidence.
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