Investing in Nicaragua Real Estate
We know that most if not all of our purchasers have no intention of living in their unit full time. This means that investment is one of their primary reasons for purchase.
Investment return comes in two forms: appreciation in value and income from rental. Nobody can predict the future for either and we are not going to promise you a profit.
What we can state as fact is that land with good views and within walking distance to the beaches, restaurants, and facilities of San Juan del Sur is in very short supply. This is obvious to anyone who stands on the beach and looks up. Much of the land that is available for building is at the South end, where the new pier and most of the existing homes and shops stand. Views can be excellent, but the slope is often too steep for a comfortable walk.
Bahia del Sol is located on a paved road at the north of the bay, on a gently sloping site, whose lowest point is only 200 meters from the beach. Our area is exclusively residential, with several homes valued over $1US million, near estates of some of the wealthiest families in Nicaragua. We think all san Juan will prosper, but believe that this more exclusive neighborhood should appreciate at a higher rate.
The Bahia del Sol Operating Company will manage the property and be responsible for maintenance of all communal areas. As an owner, you have first choice regarding what time of the year you would like to use your villa. The operating company will operate all units not being occupied by owners as a hotel. We will use all available sales and marketing channels to obtain the highest possible return on your investment.
Rental Program and Income
The potential for rental income was one of the primary reasons we selected San Juan del Sur as the location for Bahia del Sol Villas. It is already a leading tourist destination in Nicaragua and is certain to benefit from any general increase in tourism.
Furthermore, the Calvet study indicates the current demand for quality accommodation in San Juan del Sur exceeds supply. Occupancy rates and average rates in existing hotels are already high - but we deliberately designed our villas to make our potential income even higher.
Most condos in Nicaragua are designed for North Americans and Europeans. a unit of 1000 - 1400 square feet is definitely very spacious for this audience. However, in Nicaragua, tourism from Latin America and wealthier residents of Managua exceeds that from the United States and Canada combined. With the largest units in San Juan del Sur, Bahia del Sol is uniquely capable of meeting the needs of Latinos whose families typically are large. Bahia del Sol's villas are currently the only ones able to house a family with three bedrooms of privacy and also have a small quarter available for a maid or cook.
Bahia del Sol will be operated along the lines of what in the United States is referred to a condo hotel.
However, there are several features of the Bahia del Sol rental program that typically are not available elsewhere in North America:
1. Due to specialized legal restrictions, condo hotel units in the United States are each completely separated for rental purposes. That is, an owner receives rental income only if his or her particular unit happens to be rented. This sounds fair but often may not be the optimum system. For example, even if 90% of the units in a property are rented, there will still be 10 owners who received nothing at all for the time.
At Bahia del Sol, Rental revenues and expenses directly related to rentals will be pooled for all units in which the owner is not in residence on a given night. This ensures absolutely fair distribution of income with no potential for favoritism. If there is any revenue at all, each owner will get their fair share.
2. Like many resorts, Bahia del Sol will operate commercial activities. These include a restaurant, bar, and possibly the rental of ATVs and a boat to owners and renters. Unlike most resort condominiums, Bahia del Sol owners will receive all income from these activities subject to the same commission charged by the operating company for rentals.
3. Pursuant to Law 306 as described below, owners pay no income tax in Nicaragua on their rental income.
The operating company will aggressively market rentals on behalf of owners for a commission of 30%. Our team includes people with extensive, high-level experience in the operation and optimizing rental of condominium size vacation properties. We feel confident that we can attain a strong market share in the current competitive environment.
Tax Benefits and Law 306
Bahia del Sol will be structured and operated along the lines of a condo-hotel project in the U.S. It is planned specifically - and has already been approved - to take advantage of Nicaragua's Law 306, this law provides:
- 80 to 100 percent income tax exemption, depending on the type of activity provided
- Total property tax exemption for a period of 10 years
- Sales tax exemption on building design and supervision contracts
- Import and sales tax exemption for 10 years on design and construction materials and equipment
- Import and sales tax exemption for 10 years on furniture, equipment, vehicles and accessories.
You can sell your unit at Bahia del Sol at any time during the ten years and still pay no capital gains tax in Nicaragua!
In order to qualify for this special incentive for tourist development, the developer is required to make the accommodations available for rent approximately nine months (or 225 days) a year.
Buyer Protection Program
We are committed to making your investment in Bahía del Sol not only profitable, but also secure. Bahía del Sol will grant all buyers Title Insurance from American Title The First American Corporation, thus insuring your property rights in Nicaragua.
Bahia del Sol Villas & Condominiums is the premier real estate property in pristine and secret San Juan del Sur. It is a true resort community within walking distante of the beach in the best residential neighborhood of San Juan del Sur, Nicaragua.
We offer two exciting models. Our 9 luxurious three bedroom Villas combine the privacy of a detached home with the convenience of a condominium. The 32 condos feature two bedrooms and baths in a lock-off configuration to increase rental options and income.
Bahia del Sol lets you take part in the dynamic growth opportunities of owning real estate in a foreign country. We take care of everything from construction to furnishings to rental. Our buyer Protection Program and bank financing are the best in Central America. The only things you’ll need to do are relax and have fun while you’re here in Nicaragua and collect your rental checks when you’re home.
Compare us to any real estate investment property in Nicaragua. Consider location value, quality and security and you will become one of the happy owners of Bahia del Sol.