Following on from our article last month Panama Real Estate – Where Next? we had quite a bit of feedback when we wrote about apartments for sale in the local market for $15,000 – $20,000. Low cost, good value housing for locals is always a good investment. We were talking then about cheap or low cost apartments in Panama City. Another option, however, is to buy land for investment in Panama – what about this piece of beachfront property in Panama, near the Colombian border, for example?

We also found on a newsfeed the following article on Panama Real Estate Investing posted by “Panama Guide” at Panama News Briefs. More specifically, it’s about investing in real estate in Panama during the current financial crisis, and we thought warranted reproducing here.

The world is in financial crisis, globally speaking real estate markets are in decline, no banks are lending money for consumers to buy houses with, and chances are there has never been a worse time in our recorded history to buy property – and yet, in our opinion there are still at least 5 good reasons to buy property in Panama!

You may have read the hype that the boom is continuing and that every property that’s for sale in Panama is a sound investment bet – well, that’s not entirely true.  But neither is the negative hype about the market being saturated with greedy speculators and that Panama is heading for an almighty crash.

There are 5 very sound and solid reasons why property in this stunning Central American nation is a good bet for long-term investors, holiday home seekers or even retirees and early retirees…

1) Tourism is Increasing in Panama

Panama is a first world nation offering the associated comforts, and at the same time it is an ‘undiscovered’ gem of a nation where it’s possible to get truly away from the madding crowd and discover hidden coves and beaches, stunning rainforests, amazing flora and fauna, unaffected people and communities steeped in history and culture.  In other words, Panama has something for everyone – and it’s cheap too, relatively speaking!  All of these are reasons why the country has been welcoming increased numbers of tourists year on year – in fact, it has welcomed a 12% increase annually since 2004.

Hotel occupancy rates are exceptionally high, new airline routes are opening up bringing travellers direct from nations such as Italy and the Netherlands for example, and the government in Panama is continuing to plough substantial funds into the promotion of the nation internationally.

All this bodes very well for anyone who is interested in buying property in a country with a healthy and affluent outlook for the long-term.  It means that desirable homes will make good rental properties, and that as more people arrive and learn about the delights of Panama, so more people will think over the long-term about relocating to live there – thus giving a property owner an exit strategy.

2) Desirability of Panama and its Property Product

Panama has it all – from a bustling and cosmopolitan capital city to tiny rural enclaves, from high rise luxurious real estate, to beach huts and fabulous fincas.  Therefore, yet again there is something of appeal to everyone.  So whether you want to live on the coast and be a beach-bum or you want to live the high life in Panama City, you can when you choose the right type of home for you in Panama.  This makes the nation a great choice for anyone thinking about moving abroad – because you can likely find your perfect home in this one nation – no matter what it is you’re looking for in a property!

3) Property in Panama Can be Competitively Priced

Because the really booming times in Panama’s recent history are currently over, there are many speculators keen to exit the market and consolidate their debts, there are developers doing their best to off-load already constructed stock, and there are private vendors willing to accept below asking price offers for property.  What’s more, away from the glitzy, modern high-rise property market in Panama City, most real estate in Panama is sold on a more personal basis.  You’ll find that those who are selling a family home for example, are far less likely to want to sell to an anonymous buyer from abroad and far happier to sell to you if you befriend them, enter into direct negotiations with them and remain calm, open and friendly throughout.  These sorts of vendors would rather sell to you for a lower sum if you take this approach, than they would to an overseas buyer they have never met who is dealing with a slick real estate agent and offering them their asking price!

In other words, Panama is a market where there is a lot of room for movement when it comes to asking prices – no matter which approach you take and which properties you’re looking at.  And it’s also a market with some exceptional bargains.
4) Long-term Potential for Profit

Panama’s canal extension project is on track, tourism numbers are consistently rising well, the government and business environment are stable, fiscally speaking Panama is affluent and successful, the ‘pensionado’ scheme attracts more wealthy ‘retirees’ annually and the real estate market’s transparency is improving.  These are all very good reasons why Panama has exceptionally good long-term potential in terms of its property investment prospects.  Whilst things are looking less favourable at the moment due to the current state of the global financial market, those who look to the long-term and take anything but a speculators approach to the market stand to reap the rewards eventually.
5) Living the International Life

The final reason why we feel that property in Panama is a good bet is simply because the lifestyle available in Panama is fabulous!  It’s once again the case where you can get what you want from life – so, if your idea of heaven is shopping in glitzy boutiques, working in the City, dining out in posh restaurants and living in luxury – you can have that lifestyle in Panama City.  Or, if you prefer the thought of living in a friendly expat community close to the sea and with wonderful views and a very laid back pace of life, this type of lifestyle is also possible.  Alternatively, those who want to get away from it all or who want to live on the beach, in the mountains or perhaps in the local community can also find a property that will give them the lifestyle they want.

Hopefully this article has demonstrated that property in Panama can be a solid investment purchase, a lifestyle home choice or just a great buy for long-term potential appreciation…and that you can find whatever it is you’re looking for in Panama.

We hope so too. Be sure to use our Contact Form to reach us fastest for any questions you have about Panama business, investing, corporations, offshore banking or real estate. Our business is to help you do business in Panama!

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Our main business of course is not real estate but offshore services, formation of Panama Corporations and so on. But like all expats in Panama we do have a few apartments and pieces of land for sale if anyone asks

Our view is that the higher end of the market WILL soon be hit hard by the recession and falling real estate prices. We already see expatriate owners of luxury apartments in Panama looking to sell out at big discounts.

The lower end of the market – that is, affordable housing aimed mainly at Panamanians – is likely to be far more resilient. Indeed, we have some clients investing in that market right now. This morning we were looking at a portfolio of apartments about ten minutes drive from Calle 50 (Financial District) that are selling for an average of $15,000 to $20,000 each. These are realistic, affordable prices. We would expect the new owners to invest perhaps another $5,000 in remodeling these cheap Panama apartments. Then they can be rented out on stable, long term rental contracts for around $250 per month. Actually a very good rental return on these apartments if you do the math!

Likewise, affordable lots of land will not go down in value, and we expect Land in Panama to rise over the medium term – let’s say the next few years, as Panama’s financial serviced based economy tries to ride out the recession.

If you are coming down to Panama and looking to buy or rent apartments for investment, let us know. Although it’s not our business as such, we will be happy to introduce you to reliable and honest on the ground Panama real estate contacts.

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It is relatively common for a Panamanian real estate brokerage firm to offer free corporations for the buyers of properties they are selling. Frequently they have an in-house attorney or their own law firm (in other words, that is an in house lawyer masquerading as a third party law firm) doing the corporate administration and formation work.

The real estate is then titled into the name of the corporation. The corporation has nominee directors, and a resident agent who is tied to the real estate company that sold you the development through their lawyer. The lawyer forming the corporation does not have an arms length relationship. There is a definite conflict of interest in that the realtor is the one who is paying the lawyer not you. All the lawyer cares about is seeing that the real estate deal closes and the developer gets paid.

What if you need to start a lawsuit concerning the real estate because something was not done correctly? Now having his lawyer do the work on the corporation that owns the real estate that your hard earned money paid for does not seem like such a good idea, does it?

Second Year Fees – A decent price for second year fee is $1500 including three nominees, resident agent, resident address and the $300 tax. Some of these law firms charge $5000 or more for the second year fees and that is how they make their money. So the free corporation may not be that free.

Free Immigration Work from Broker – Again be careful if there is a dispute over the real estate why do you want your broker or their lawyer to have involvement with your immigration case. What if a lawsuit is necessary regarding the real estate?

Always get an independent lawyer that represents you without any conflicts of interest. Our firm does not sell any real estate and we are proud to independent.

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