Until recently, the only way to Rancho Los Perros, on Nicaragua's glorious Pacific coast, was on horseback. But as with any new real estate development, the earlier you get in, the more potential there is for profit.

"Nicaragua Business Update"

List of things to remember as you set out to build your dream home in a foreign paradise:

1. The most important thing is to recognize that you're not operating in the States. Different building codes. Maybe no building codes. No inspection process.

2. The second most important thing (given the first) is to engage a reliable general contractor...who you've found with the recommendation of someone you trust and for whom you've gotten three current references. Best case (and what we're trying to arrange) is to be in the country, on site, for the first month of construction. Then your G.C. can take over for you between your follow-up visits. If you can't be on site when ground is broken and the foundation work, etc, is being done, your G.C. plays an even more important role.

3. Hire an independent agent to follow the progress of construction for you...to be your eyes on site. Someone living in the country for the duration of construction and who, preferably, speaks the language of the workers. We have someone living in the country who will be able to fill this role for us. When we finally begin building, we'll get weekly updates and photos by e-mail.

4. Arrange for payments to be made according to construction benchmarks. Maybe 25% to start, 25% after certain milestones, 25% after the next set of milestones, 15% after another set of milestones, and the last 10% after you have been to visit the property and have assured yourself that you're completely satisfied with the work.

5. Identify what IS and what IS NOT included in the contract. For example: retaining walls, the pool, landscaping, etc. Get a firm price in writing, and be as specific as possible. Err on the side of detail--include electrical outlets, include the wall lamps by the pool (they're in the drawing, but make sure they're in the price), include the "hooking up" of the appliances.

6. Understand how your house will look and what view you'll have if all the homes around you end up being built.

7. Understand all the maintenance costs--landscaping, security, pool maintenance, bug control (especially on a palapa roof if you're incorporating one).

8. Consider whether you want to air condition the bedrooms, the public rooms, the hallways, or all of the above. This can make a big difference in the layout.

9. Don't let your builder change a thing without giving you a written quote as to how much it will cost.

10. If you're building on the water, use water- and salt-resistant materials on exposed surfaces (sounds obvious, but your builder may not remember).

11. If you are going to put your house in a rental pool, remember that when you select furniture, bedding, sheets, etc.

12. Make your home storm-proof and provide instructions to your property manager in case of a storm.

13. Expect delays. The weather sometimes will be bad...materials often won't arrive on time.

14. Pick out your own appliances and finishings--the tiles, the air conditioners, the generator, the toilets, the light fixtures, etc.

15. Get a warranty in writing from your builder, including such things as plumbing and electricity.

16. A palapa roof looks lovely, but it requires much more maintenance than a tile roof. Palapa is said to last five years. Hornets and scorpions favor the palapa, too, so that can be another vote for tile.

17. Talk to your builder about "Covintec" sheeting. It is a wire-framed styrofoam sheet that you can use for walls and roofs. It has excellent thermal qualities and is designed for earthquake zones. It can also be used for pools. It is a great cost- and time-saver.

18. Buy a generator, one that is proportionate to the size of your home. Ask your builder for recommendations.

P.S. One of the greatest advantages to building a home in Nicaragua right now is how affordable it can be. This country has not yet been hit by the building boom (and rising construction costs) that are common in nearby areas (in Costa Rica, for example).

This means that you can build a home, complete with hardwood floors, French doors, Italian or Mexican tile kitchens and baths, wooden decks, air conditioning, and all the amenities for as little as $45 a square foot--a total of about $60,000 for a spacious two-bedroom house.

Or you could build a home that could be featured in the pages of Architectural Digest for less than $90 per square foot.

But these construction savings won't last forever.

As I mentioned the other day President Bolanos is launching an aggressive campaign to increase the number of foreign visitors to the country from the current 475,000 per year to 800,000 per year by 2006. More visitors will lead to more buyers will lead to higher prices.

Managua, especially, has already seen millions of dollars of new construction--new hotels, new restaurants, new apartment complexes, new shopping malls. With all this activity, construction prices won't remain at their current low levels for long.