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Paradise discovered?

Intrepid investors and second-home buyers looking for pristine beachfront in Central America are exploring the potential of Nicaragua's western coast.

March 11, 2007|Diane Wedner | Times Staff Writer

San Juan del Sur, Nicaragua — WHAT second-home buyers yearn for in Central America is Costa Rica before the building boom. They want ocean views and unspoiled land, without the steep prices, crime and American fast-food chains. They want Panama before Donald Trump.

Adventurous Americans, Canadians and Europeans willing to dodge livestock and potholes for the two-hour car ride south from Managua to this sleepy fishing village on the west coast of Nicaragua are finding just that. Three-bedroom homes with unfettered views of shimmering bays and turquoise water start at $155,000; condos, from $129,000. Undeveloped land with ocean views -- sites of a quarter-acre -- start at $35,000. Construction costs generally range from $55 to $75 per square foot. To investors, it simply screams "ground floor."

Sure, Costa Rica is still a destination for many U.S. retirees and near-retirees -- condos at Marisol at Punta Dominical in the southwestern coastal region of Costa Rica, for example, start at the mid-$200,000s, and come with three community pools and nearby hiking trails. Then there's also the province of Guanacaste in the northwest region, where luxury condos start at $500,000. Seems the word is out.

"The prices keep going up," said Barbara Black, a 61-year-old Woodland Hills resident who, with her husband, Jay Goldenberg, 62, purchased two beachfront condos in Costa Rica three years ago, one for $250,000 and one for $275,000. Those units today are worth $750,000 to $850,000. The couple plans to retire there.

"There are some condos here for $200,000 and little beachfront houses in Costa Rica for $2 million," she said, adding that a rise in crime has prompted many complexes, including hers, to hire private security companies.

In Panama, also known as the "new Costa Rica," the town of Boquete has condos starting at $260,000. Trump Ocean Club International Hotel & Tower in Panama City, to open in late 2009, will feature 68 stories of hotel rooms and condos, with a yacht club, casino and business center. Condo-hotel prices start at $375,000 for a studio.

But Nicaragua's San Juan del Sur has retained its small-town charm: Burros are parked between cars in front of homegrown businesses such as El Gato Negro -- the Black Cat -- a popular bookstore and cafe for expats, and children play in the church plaza, which is in the middle of a face-lift. Wooden houses with tin roofs are painted in bright colors, and open-air restaurants with palm-thatched roofs line the main street along the beachfront.

Paradise comes with a few blemishes, however: mosquitoes, roosters that don't know day from night, vegetable peddlers hawking goods over megaphones and the incessant sound of hammers and drills from home construction. It's rainy half the year -- about 29 inches of rainfall annually -- and hot most of the time. For now, living here means relying on unreliable electricity and shaky infrastructure in general, and having a dearth of medical care. But, ah, the beaches.

"Nicaragua is wedged between the two best real estate markets in the Western Hemisphere -- Costa Rica and the U.S.," said expat Sam Stewart, a former Peace Corps volunteer and current ReMax Tierra Nica agent. "We're the ugliest house on the nicest block."

OK, so it's not perfect yet. But relative ease of purchase, tax incentives, low crime and a laid-back lifestyle on a gorgeous stretch of coast make Nicaragua appealing.

Be prepared to pay cash, however. Although lending is available to foreigners through Nicaraguan banks, interest rates are steep.

Nothing could deter Jan and Duane Sanow from purchasing land in Nicaragua. The Minnesota owners of a manufactured-home dealership, 50 and 49, respectively, had searched the coasts of Mexico and in Panama for an investment/vacation property for 10 years, but didn't find what they wanted.

"We were always at the tail end of the development boom," Jan Sanow said. "This time, we're at the front end."

The couple purchased a quarter-acre beachfront parcel for $220,000 on which they're building a five-unit condo development, a mere 150 feet from the water at Coco Beach, a deserted strip of white-sand seashore 10 miles from San Juan del Sur with a view of Salinas Bay and Costa Rica, to the south.

When their complex is completed -- at a construction cost of about $800,000 -- there will be a swimming pool, on-site laundry, air conditioning and gated parking. Just don't look for a Ralphs. There's always the traveling vegetable vendor, however, and Puesto del Sol -- an al fresco restaurant -- down the beach. The two-bedroom condos, in 1,300 square feet, will sell for $275,000.

The Sanows say they're thrilled to have found a beachfront investment they can afford, a 45-minute drive north from Costa Rica's border. And they like to emphasize the positives. "There's a strong sense of community here," Jan said. "It's a great place for expats."

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