The Next Costa Rica? Why Nicaragua and Honduras Are Emerging Hotspots

Looking for the Next Big Real Estate Opportunity in Central America?

Costa Rica’s booming real estate market—fueled by tourism, retirees, and digital nomads—has many investors asking: What’s the next Costa Rica? Increasingly, all eyes are turning to Nicaragua and Honduras. These two emerging markets offer everything from affordable beachfront property to government-backed developer incentives, making them rising stars in the Central American property scene.

Nicaragua: A Hidden Gem on the Rise

If you’re hunting for beachfront bargains, Nicaragua might just be your goldmine. In places like San Juan del Sur and Tola, oceanfront lots start around $30,000—a steal compared to Costa Rica’s Tamarindo, where similar land sells for $100,000 or more.

Tourism in Nicaragua is bouncing back after a political slump in 2018, with 2024 visitor numbers nearing pre-crisis levels. Investors are eyeing Nicaragua not only for its beautiful beaches and surf spots, but also for its affordability:

Low property taxes – often under $200 per year on a $150,000 home
High rental yields – up to 10% in tourist hotspots
Stunning landscapes – from colonial cities like Granada to volcanic coasts

No wonder more people are talking about “emerging markets Nicaragua.”

Honduras Real Estate: Roatán Leads the Way

Over in Honduras, the spotlight is on Roatán and the Bay Islands. This English-speaking Caribbean paradise offers:

Beachfront condos starting at just $150,000
A rapidly growing tourism sector—boosted by cruise ships and direct U.S. flights
A free-trade zone offering tax breaks on rentals and property transfers

For foreign buyers, Honduras real estate offers both value and upside, especially in vacation-friendly zones like West End and West Bay, where rental yields average 6–8%.

Developer Incentives Sweeten the Deal

Both countries are actively encouraging foreign investment with generous perks:

In Nicaragua:

Law 306 gives tourism-related developments:
- 10-year exemptions on property and income taxes
- Incentives for approved projects like Gran Pacifica (a full-service beach resort with condos, villas, and a golf course)

In Honduras:

The ZOLITUR program offers tax holidays for eco-tourism and resort projects
Incentives are especially strong in the Bay Islands, already a magnet for expats and retirees

These benefits reduce upfront costs and increase long-term ROI—a big plus for anyone seeking the next Costa Rica.

Tourism Potential: Undervalued and Growing

Tourism is a key factor when evaluating emerging markets. Here’s how Nicaragua and Honduras stack up:

Nicaragua: Colonial charm, surfing destinations, and a growing base of digital nomads
Honduras: Some of the world’s best diving in Roatán and booming cruise traffic
Rental yields: Up to 10% in Nicaragua and 8% in Roatán
Accessibility: Both countries are just a 2.5–3 hour flight from Miami

These factors point to major growth potential, especially for short-term rental investors.

Ownership, Costs, and Legal Tips

Foreign ownership is surprisingly easy in both countries:

Nicaragua: Full title ownership allowed; always use a local attorney to verify documents, especially in rural or post-reform areas
Honduras: Clear title processes, especially in the Bay Islands; expect 2–4% transfer taxes and low legal fees

Pro tip: Stick with trusted agencies like Century 21 Nicaragua or Roatán Life Real Estate to avoid scams and incomplete titles.

What About the Risks?

Let’s be honest—no investment is risk-free. Here are the main concerns:

Nicaragua: Still recovering from past political unrest, though current conditions are improving
Honduras: Higher crime rates on the mainland, but Roatán is considered safe and tourist-friendly
Environmental risks: Hurricanes are a factor—so build smart and insure properly

Despite these challenges, the low cost of entry and high potential for appreciation make these markets hard to ignore.

Example: A $50,000 lot in Popoyo, Nicaragua could double in value as the area attracts more tourism—similar to Costa Rica’s boom two decades ago.

Bottom Line: Get in Early, Get Ahead

If you’re a forward-thinking investor looking for the next Costa Rica, Nicaragua and Honduras deserve a serious look. Here’s why:

Affordable beachfront land
Developer tax breaks and incentives
Strong tourism growth
Simple foreign ownership laws

Focus on tourism-driven locations, work with reputable developers, and take advantage of legal tax perks. These emerging markets in Nicaragua and Honduras are where smart investors are planting their flags in 2025.