5 insider tips to real estate investing in Central Ameria

1. Don’t believe the hype

In Panama (and across the region), there’s no overarching multiple listing service (MLS) for real estate and little centralized tracking of the price properties have sold for in the past.  There is no local equivalent of www.zillow.com for the regional real estate market.  This means that the market is particularly prone to exaggeration and hype, sometimes in both directions.

Research sites like this one before you leave home and set about building a good network that will allow you to contextualize information that you receive.  Learn from professionals and be skeptical about claims that you can flip your property for 100% more "when the next real estate tour come into town in a few weeks".

2. Understand the pros and cons of buying off plan

If you're prepared to buy before you see the finished product, you can get as much as 30% off the asking price of a new property.  Not only is it cheaper to buy off-plan, but you could find that your new property is worth more by the time you move in.  Expect to pay in installments against key construction milestones.

You’re going to have to trust your imagination.  Even with virtual tours and full presentations, it can sometimes be difficult to visualize all aspects of your new home and its relationship to neighboring properties.  And when it comes to timing, remember that you may have to wait longer than you anticipated to move in.  Progress can be delayed and you’ll rarely be given a fixed date in the contract for completion.

3. Know where you are in a property cycle and understand the demographic trends

Panama has witnessed a building boom and seen significant price rises in the past few years.  Speculators still make up a considerable proportion of investors but a “second wave” of pre-retirement / retirement and second home buyers are emerging – the “baby boomer” generation.
 
Much has been made of the baby boomer demographic when analyzing future buying trends in markets worldwide. Baby boomers began turning 50 in 1996 and 78 million of them began to enter their period of highest earnings and greatest discretionary dollars.  It is said that over the next 15-20 years the baby boomer generation will likely constitute the largest potential market ever for real estate products, especially second homes and timeshare/fractional ownership offerings.

4. When buying for rental income think hard about the end-user

If you plan to let your property for profit, think hard about what kind of person is likely to sign the lease.   If you’re buying in a golf community for example, will your property appeal to golfers if it's not directly on the course?  Do your guests get a break on the green fees?  What kind of properties do surfers look for and what months are the best for surfing.  Can you tap into the local rental market or is your property only going to appeal to a foreign vacationer?   Find out whether the developer is set up to manage and market the property on your behalf or if you need to hire a local property manager.

5. Check travelling time to the nearest international airport

The revealrealestate survey includes travel time to the nearest international airport for all developments in our database.  It's rare to find major hospitality brands further than 90 minutes from an international airport and their presence practically always has a positive impact on property prices.  In fact most major chains like to be within 60 minutes and with fully-paved access.   Also, the closer you are to the international airport, the more likely you’ll be motivated to visit, even when you’ve only got a short amount of time available.

Want more tips? Read our combined list of insider tips.