What I Learned About The Real Estate Markets On My Drive Through Mexico, Guatamala, Honduras, & Costa Rica.

I have been a full time real estate investor for 15 years. The first property I purchased was a farm in Costa Rica at the age of 18. Since then I have spent years traveling, living in different countries, founding different investment companies, and studying how the real estate markets work, grow, stagnate, and function under different circumstances.

It is an interest I have always had. I can’t even go on vacation without visiting real estate offices, looking at properties, talking to hotel owners, local attorneys, travelers, or restaurant owners, to get an idea who the customers are and what product is the most compelling. My passion for lack of a better term is “Real Estate Anthropology”. I am especially interested in the historical development of an area, and what events or circumstances led to the greatest rise in property values. This information can then be applied when deciding where to place investment for the quickest and highest return.

There are many similarities between Central America and other markets as it relates to real estate, but there are many differences and knowing how each could affect investment is critical for success in todays economic environment.

Central America has many areas experiencing early stage development which comes with its own unique customers and projects and techniques for investment.

When I bought my first property I didn’t know how to evaluate investment potential or how local laws, regulations, changing administrations, political agenda, or amateur development to name a few could affect my investment.

It turns out a little luck can deliver profits just like experience, but I didn’t want to rely on luck as a strategy, so I started studying areas, towns, beach front, travelers, buyers, successful projects, unsuccessful projects, and wondering how these smaller towns mature.

View Central America Road Trip in a larger map

Through this practice, I have been able to develop rules for success and an intuitive feel for changes that can lead to making investments returns. This feel has come from years of long term case studies of topics like: What affect will a new road have on values? What is the best timing invest when a new road is coming?, Why sometimes a new road is bad for values?, How the first major development in an area can change the customer base and create demand for a new type of product, Why amateur development can stagnate growth long term, How a good surf break can be the catalyst to development, to strategies for controlling large regions just ahead of infrastructure change, or when lower density developments are a better investment than cheaper higher density options.

Real estate markets move in cycles or stages and in Central America these cycles/stages are particularly pronounced, each new cycle/ stage brings new services and options, and new services and options bring new customers, and new customers bring money and if this can be sustained it will mark the beginning of a new cycle/ stage.

There is a long term pattern for values they tend to lurch forward then stagnate, then hopefully lurch again, stagnancy lasts longer in some places than others, knowing the signs of change can be an advantage. I look at each town I come across as a stockbroker looks at a stock, what is the upside? Are there any changes about to occur that would favor my investment in the region? What is the history of the area? Are there any developing trends that would dove tail here? Are the people coming here going to stay or just passing through? Whey
would they buy?

Recently I decided to pack up my family and drive through Central America to gauge what has changed and how much during the latest real estate run-up. I particularly wanted to focus on area comparisons and learn why some areas increased in value more than others?, Was Sayulita Mexico a better place to invest the last 5 years than Coronado Beach Panama? Will the proposed airport in southern Costa Rica do for the region what the Liberia airport did for Guanacaste? Does a heavy military presence hurt the perception of country enough to wreck investment potential? How much are the negative headlines from the drug war in Mexico impacting real estate transactions? How does strong local culture and traditions relate to long term value?

My traveling caravan included me, my wife, my 4 year old son, and my 1 year old daughter.

We packed up our belongings and hit the road over a month ago. Leaving from California, we were able to explore Mexico, Guatemala, Honduras, Nicaragua, & Costa Rica.

There was fair amount of pessimism about the voyage, “It will be hell for you and the kids in the car that long” “Why drive when you could fly cheaper?” “Its not safe” “The trip will end with a divorce” was the refrain from everyone who heard our plans.

I knew from my travel experience in Central America what to expect, but there were times when I wondered if I was crazy.

Now that the trip has been completed I would tell anyone, it was well worth the effort. From the sights to the insights driving through the entire region in short duration was an experience that was very valuable.


The two worst parts of the trip were getting sick and the unpredictability of the border crossings. The whole family caught something and we were all bed ridden for 4 days. At the border crossings, you never knew if it was going to take 1 hour or 5 so planning wasn’t very easy. It did seem to get harder as we moved south. Coincidentally the food also got worse as we moved south. Maybe there is some correlation.

The best part was being reminded of the diversity of Central America and Mexico and for my wife and I to share that with our kids. If you read the headlines, it could be interpreted that the real estate business has disappeared, this is an overstatement, but leaves the
question who is still buying property and why? What kind of transaction volume are towns seeing? What qualities do the towns have that have been able to endure the sharp down turn?

Before I left I decided on two goals. The first was to get an on the ground feel for how the real estate market has changed in the last
6-12 months. What’s selling who is buying and why and which areas were most resilient to drastic changes in market conditions? The second goal was to scout out new opportunities for our investors and buyers.

By the end of the trip I felt i had a pretty good grasp on these goals. My impression wasn’t that there was brisk selling, but there were some places with healthy sales numbers. The places with healthy sales had one thing in common, limited supply, which meant that prices
hadn’t changed much. The buyers in these places had changed in the sense that they are much more cautious, and sales had dropped of their
peak, but product was moving.

We will be posting several different types of reports and articles in the coming weeks based on the trip and the new opportunities that have presented themselves along way.

The first is called Area Snapshots and will be coming in a few days.

When scouting new opportunities we begin by developing a feel for a place and its market. If we like what we see we move on to developing much more detailed due diligence about an areas customers and product. We use snapshots to help determine where we would consider digging in further or to update a location.

I hope you enjoy them.

Area Snapshot

Nayarit Riviera, Nayarit, Mexico


Highlights Gorgeous lush coastline winding point after point from San Blas to Vallarta Nuevo. Area benefits from established towns with different personalities, which is being promoted heavily, four seasons at Punta Mita attracts high end clientele.

Cons: Can be buggy, Beachfront discovered a long time ago

Airport Puerto Vallarta

Weather: Mild tropical climate with an average temperature of a comfortable 77° F (25 ºC)

Investment Potential: High. The mayan Riviera is a large area of a 100 mile stretch of coast, Winning investments will be separated when choosing where to invest. Which will grow faster? The established areas or yet to be branded nooks? The less established areas need quality projects to develop an attractive personality, and the more established areas that already benefit from a personality have to hope that will stay a winning formula for post-bubble buyer.



Area Snapshot

Huatulco, Oaxaca Mexico


Pop. 15,000

Also known as Bahias de Huatulco is centered around the town of La Crucecita

Strengths: Well planned and designed community that is safe and offers all the key attributes for growth, strong local community, golf course, marina, some resorts, and an airport.

Weakness: Isolated, price per square meter is pretty high compared to the countries south, La Crucecita has tourism and thats about it.

Notes of interest: Huatulco has a local airport that services the area so you can fly directly there. The town of Las Crucecita is the heart of the area, it offers several eating and lodging options in a quaint but sterile mexican atmosphere. There is a marina, resort options, and a golf course.

The area is master planned to support 100,000 residents, currently the size is about 15,000. The key to this plan is that the mexican government has made sure that the master plan includes extremely high quality infrastructure like water, roads, sewer treatment ,and electric. What this means is that the long term health and growth won’t suffer due to poor planning like so many other areas in central america. One of Huatulco’s many offerings are beautiful bays and 36 beaches.

Sunshine can be expected about 330 days a year with the average temperature of 28C



Area Snapshot

San Cristobal de las Casas Chiapas, Mexico

Pop. 142,364

Small Mountain city located in the Highlands of Chiapas with strong indigenous presence

Highlights: Beautiful Colonial city with an unexpectedly urbane cafe and art culture. A very strong indigenous presence and influence.

Cons: Isolated, political risk, the political situation could flare up causing long term investment concerns.

Climate and Appearance: Lots of pine trees covering the surrounding mountains, a fire place is great thing to have in the winter here because it gets pretty cold for Mexico.


Investment potential: Fair San Cristobal provides many opportunities for varied business plans, long term appreciation has been based on the city as a whole becoming more diverse in its offerings, subsequently attracting a more diverse group. Visitors to this area have changed dramatically in the last 8 years, it has become well serviced tourist destination.



Area Snapshot

Panajachal, Guatemala

Pop. 11,142

Highlights: Gorgeous lake surrounded by volcanoes, great climate, and vibrant indigenous culture. Good eating options in a walkable setting, the expat community is a lovable quirky one spawned from the popularity of the lake as hippy stop many moons ago.

Cons: Polluted lake. Pretty slow lifestyle

Weather Vegetation: The altitude of Pana is about 1 mile which creates a year round spring climate. The lake is surrounded by Volcanoes that are covered with farms and trees.
Investment potential Low Even though the area is beautiful and the small town is well serviced it is well known the lake is polluted this combined with a quirky niche market impede investment potential.


Area Snapshot

Antigua, Guatemala

TitlePop. 34,685

Colonial city with cool mountain climate, great restaurants, local areas to explore, broad appeal.

Highlights: Charming cafe’s, refined tourist amenities, climate.

Cons: Out of all the people who visit the area, not many are compelled to stay and live. Not much has changed in Antigua the last 10 years.

Investment potential: Low, This colonial city is second to none, but has tough competition from Granada, San Miguel Allende, San Cristobal, and now Cartegena, Columbia. From the investment point of view Antigua has the resources to compete, but does not attract the investment interest of other colonial cities.

Area Snapshot

Copan Ruinas, Honduras

TitlePop. 24,309

Colonial village set adjacent to the grounds of the Copan ruins

Highlights: Great little town, quaint, comfortable, and surprisingly enjoyable place to be, many travelers come just for the ruins and end up staying a few more days. Copan is the 2nd most visited spot in Honduras

Cons: Not enough diversity to accommodate a wide range of tastes, its perfect for backpackers, but others will have make some kind of sacrifice.

Investment Potential: HIgh Even though there isn’t enough diversity there is a great foundation to build on, and I am sure these niches will be filled in the near future.

Copan is surrounded by pasture mixed with trees.

Area Snapshot

Lake Yojoa, Honduras


Pristine lake town in the mountains , If you have been to Panama its like Boquete except two distinctions, Yojoa has a lake, and doesn’t have the retiree expats

HIghlights, Eco potential, varied wild life, lake and mountain views.

Cons: One horse town, the tourist infrastructure has evolved based on the tastes of the Honduran tourist who comes here, this means lots of shacks selling fish dinners on the lake. Lack of promotion. political questions

Investment potential: Good, even with the obvious concerns there are always people looking for value and some will find it here.

Yojoa is located 892 ft about sea level.


Area Snapshot

Granada, Nicaragua

Pop. 110,326

Colonial city on Lake Nicaragua

Highlights Beautiful setting for a colonial city to be built. Detailed renovations of restaurants and hotels with options for every budget, a die hard fan base.

Cons: Unpredictable political administration, You get the feeling your late to the investment party,

Weather/vegetation Temps range between 81 and 95 degrees fahrenheit. the region is drier than Costa Rica to the south and the landscape reflects that with a browner look.

Investment potential: Low This is the most popular place in Nicaragua, so it has been “Discovered” There are still projects that can be profitable, but I think the city is at or close to its peak for tourist activity, therefore not much potential for growth.

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About Josh

Josh Linnes has worked in Central America real estate in everything from entitling, infrastructure, building, infrastructure installation, and acting as principle for several developments. As co-founder of Emerging Terrains he has run point for over $8 Million in investments. Read his bio here

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