When searching for real estate in Panama online, you’ll find a ton of “consultants” and “experts” promising high net rental yields of 7%, 10%, 12%.
Lies. Such yields do not exist, especially not for new developments.
Panama is:
– a plan B
– a plan A for people who want to live there
But it’s not a place where you buy real estate purely for rental returns.
The play here is to get a Plan B residency or to live there.
The Qualified Investor Visa is an interesting option for people who want immediate permanent residency. Just 30-45 days after making a real estate investment of $300,000 or more, you and your family are granted permanent residency.
To keep it active you just need to spend one day there every two years. Also, this program was recently revamped to include a Panama Travel Passport.
What is a Panama Travel Passport?
It’s not citizenship. It’s effectively a Panamanian passport that has your original citizenship written inside. Is it useful to travel? Yes, almost all countries that give visa-free access to Panamanians accept it apart from some Schengen countries in Europe. As things stand, you can enter the EU through some countries with such a travel document. Here are the countries within Schengen that you can travel to using a Panama travel passport.
Here are case studies featuring all relevant numbers for two apartments in Panama City that would qualify you for this immediate permanent residency option.
Does it lead to citizenship?
The path from permanent residency to citizenship in Panama is still unclear. We’ll discuss this in an upcoming video.
- Feel free to get in touch with Matt my Panama City Realtor
- Here is more information on How to get Residency in Panama
- Here is the Panama City Real Estate Investor Guide
To a World of Opportunities,
The Wandering Investor.
Services in Panama
- How to obtain Residency in Panama
- Real estate lawyer in Panama
- My Realtor in Panama City
- Create a corporation in Panama
Articles on Panama
- Panama City Real Estate Market: 2026 Investor Guide
- Affordable Tax-Free Caribbean Lifestyle and Real Estate
- The Pros and Cons of investing in the Boquete Real Estate Market in Panama
- How to Obtain the Panama Retirement Visa
- Panama Permanent Residency in ONE trip
- What is the Panama Travel Passport and how to get it?
- The Pros and Cons of living in Panama
- The Secret Third Way to Get Panama Residency – Company Formation for Friendly Nations Visa
- How to buy a gun in Panama – Gun rights in Panama
- Real estate for Friendly Nations Visa in Panama City – case studies
- Buying real estate in Casco Viejo of Panama City – Things to know
- Panama Tax Guide
- Remotely opening a bank account in Panama
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Transcript of “Panama: Qualified Investor Visa Real Estate Case Studies for Immediate Permanent Residency”
LADISLAS MAURICE: Hello everyone, Ladislas Maurice from The Wandering Investor and today we’re in Panama and we’re going to check out real estate that qualifies you and your family for permanent residency immediately within a month together with Matt. Matt, how are you?
MATT: I’m doing well. Thank you for having me.
Get Permanent Residency in Panama with a single visit
LADISLAS MAURICE: So, you’re seeing people increasingly moving to Panama and saying we don’t want to do the 200,000 term deposit or buy real estate for 200,000 and wait two and a half years for permanent residency, people want it now.
MATT: That’s right. It’s a it’s a much faster process. You have your residency within 30 to 45 days. You only have to come back once, whereas with the other option, it takes six months or or even more if there’s something happening in the government.
LADISLAS MAURICE: Cool. So, here at 30 days, permanent residency and then you come back once every two years to keep it active.
MATT: That’s exactly right.
LADISLAS MAURICE: A lot of people come with this brief and tell you I want to get real estate around that price point, not too much more because my objective is permanent residency.
MATT: That’s exactly right. They want to be as close to that $300,000 threshold as possible.
LADISLAS MAURICE: So, you’re going to show us two very different apartments today.
MATT: That’s right. We’re going to see first Arcadia, which is over our shoulder, uh, that has a short-term option, which is very important that they actually have the short-term license. It’s not operating as an illegal short-term, uh, Airbnb. And then the other one is right on Avenue de Balboa, spectacular views of the water. That’s more of a long-term play. That’s one where you’re going to either use it yourself or you’re going to have a renter that’s going to be in there for 12 months or more.
Airbnb short-term rental permit in Panama City
LADISLAS MAURICE: Okay, so we’re going to go check out this one first, the short-term. Can you say two words on the short-term licenses here in Panama City because I’ve come across listings and people tell, yeah, it’s on Airbnb, here’s the history, all that, but then actually.
MATT: Well, they’re operating illegally. So, back in 2012, when there are a bunch of hotels that came online in Panama City, the government realized that they couldn’t have the competition. So, they did introduce the Airbnb rule where you cannot rent legally for under 45 days. So, what developers have started doing is they are building properties, pulling that license before they even break ground, and that allows you to operate legally.
Lifestyle and infrastructure in a high-end neighborhood in Panama City
LADISLAS MAURICE: Okay, cool. So, tell us about this neighborhood here. We’re in Costa del Este.
MATT: We are. We’re in Costa del Este. It’s Panama City’s first pre-planned community, wider streets, wider sidewalks, uh, more of a high-end type of community because of all the multinational corporations that have their Latin American headquarters in Panama.
LADISLAS MAURICE: Can you name a few?
MATT: I can. Uh, you have Procter & Gamble, you have Reebok, you have John Deere, and the list goes on and on.
LADISLAS MAURICE: One of the nicest malls in town is right around here, right?
MATT: That’s correct. So, that’s the Town Center Mall. That’s the main hub or shopping center for, uh, Costa del Este. Uh, you’ll see a lot of families gathering there. It’s also attached to the second Johns Hopkins affiliated hospital in Panama City. So, really great medical, uh, close by.
LADISLAS MAURICE: So, for both of these apartments, we’re going to do all of the numbers in detail in terms of ROI, taking into account vacancy rates, all the expenses, et cetera, so that you have a a good understanding of what the real return on investments are here in Panama because I mean, let’s just say it upfront. I mean, you see people online saying 10%, 15%.
MATT: That just doesn’t exist.
LADISLAS MAURICE: Okay, so All right, so let’s go see some real numbers.
MATT: All right, sounds good.
LADISLAS MAURICE: Let’s go. All right.
Fully furnished 1-bedroom condo in Panama City for 300k$
MATT: So first I wanted to show you the pool area. I think it’s important to show some of the amenities in these modern buildings. It’s something that your short-term renters are going to look for when they’re looking for a place to stay while in Panama.
LADISLAS MAURICE: Beautiful view. Gosh.
MATT: Yeah, right out there to the bay, you know, rooftop pool is something we’re seeing a lot of the developers do nowadays to take advantage of the views.
LADISLAS MAURICE: Oh, you can even see all the uh all the boats waiting in front of the canal, right?
MATT: That’s right. They’re all waiting for their chance to get through the canal out to the uh the islands out there and uh, you know, there’s not much to to not like about this place.
LADISLAS MAURICE: So, this is one of the reasons Panama is just generally relatively stable and fine. It’s because of the Panama Canal. It’s effectively like the the Middle East. People just sit and don’t really have to do anything because there’s all this free money from oil. Here for Panama, it’s all free money from the canal. So, this is really Panama’s gold mine.
MATT: That’s right. That’s the cash cow. It drives the entire economy for us.
LADISLAS MAURICE: Cool, and you have a nice city views as well. And how far away are you from the airport here?
MATT: From here, we’re about 10 to 15 minutes away from the airport.
LADISLAS MAURICE: Okay, so 10 to 15 minutes away from the airport, nice views, 15 minutes to the city, nice amenities and all the major headquarters and some nice malls around all walking distance.
MATT: That’s exactly right.
LADISLAS MAURICE: Okay, cool. All right, so we’re going to go check out the unit now and do all of the numbers.
MATT: All right.
MATT: All right, so we’re going to check out a 76 square meter, it’s about a 800 square foot, one bedroom condo on the corner of the building. Uh it comes fully furnished, ready for quick rental.
LADISLAS MAURICE: So, bedroom on suite here. Is it really 800 square feet? It feels smaller.
MATT: Yeah, Panama they include everything. So it’s not just living space, you know, they’re include the size of the walls. Every nook and cranny is included in that square footage.
LADISLAS MAURICE: Uh, what about the common areas? Is a percentage of the common areas allocated to that space?
MATT: In this case it’s not.
LADISLAS MAURICE: Okay, so it’s just walls.
MATT: That’s correct.
LADISLAS MAURICE: Okay. So Tel, this is your apartment, right?
TEL: It is indeed.
LADISLAS MAURICE: So, why are you selling? What’s wrong with it?
TEL: Absolutely nothing. This was a great entry into Panama. It did what I needed. It was my uh residency visa. And now it’s time to just upgrade and move into something that’s my future home. This is a great investment, but I’m looking for a home now. Now that I know Panama.
LADISLAS MAURICE: Where are you moving to in Panama?
TEL: Um, ideally Panama City, uh Punta Pacifica, hopefully uh Ocean Reef if everything goes well.
LADISLAS MAURICE: How did you enjoy living in in Costa del Este specifically?
TEL: Being an expat, I love it. Unfortunately, which I’m not proud of, but I haven’t learned Spanish. And you have not needed Spanish once in Coto del Este. All the stores speak English, all the professionals speak English. It seems like they gear for people like me in the city. And um, this building in particular, the rooftop pool, being able to just work up there, relax, look at the view, and uh, it’s much cooler upstairs. So, having that nice breeze, being able to relax, paradise.
LADISLAS MAURICE: Cool. So, did you do the immediate permanent residency for 300K or did you do the friendly nations for 200K?
TEL: Nope, I did the permanent residency right away. Bought this unit on a credit card and uh landed in Panama two months later.
LADISLAS MAURICE: So, you bought this place five years ago and now you’re you’re selling after the five-year period?
TEL: No, I bought it two years ago. I moved here about a year and a half later. Now I’m selling it.
LADISLAS MAURICE: Yeah, because when you invest in this immediate permanent residency, your investment is locked in for five years, but you’re allowed to sell and to buy something else as long as you always keep that limit of 300,000. So, if you buy something and after a few years you decide actually you’d rather live somewhere else, then it’s not a problem. You can you can make that transaction. But it’s a process that needs to be managed carefully.
TEL: Yeah, absolutely.
LADISLAS MAURICE: And you’re originally from?
TEL: Uh, I moved to Panama from Toronto.
LADISLAS MAURICE: And do you meet a lot of Canadians here?
TEL: Um, I’ve got four passports and I’ve met people from every one of my passports, South Africa, Israel, New Zealand, Canada. Um, my ma’s family is from the US and I’ve met a ton of Americans here as well. This is just a melting pot.
LADISLAS MAURICE: Cool. So, Tel us the perfect target audience for this channel. He already has four passports. So well done to you.
TEL: Thank you. It wasn’t tough. You just travel with a laptop.
LADISLAS MAURICE: All right, so let’s go through the numbers, Matt. We’re looking at $310,000 listed.
MATT: That’s correct.
LADISLAS MAURICE: What could it be negotiated down to?
MATT: In Panama, typically, you know, there’s about 5% of negotiation room. In this case, it’s special though, you want to stay above that $300,000 threshold.
LADISLAS MAURICE: Yeah, so this one’s a little special case in the sense that, yeah, you can hit the 300,000 limit. Uh but you’re potentially paying 5-10 extra K because if it wasn’t for that, you could potentially negotiate a bit more.
MATT: Actually, not necessarily, because in this case, the developer is still selling units in the $350 range. So, it’s priced at that to attract, you know, to attract buyers that want to hit that $300,000 threshold.
LADISLAS MAURICE: So, the units that are being sold by the developer are brand new in this specific building?
MATT: Brand new in this building, fully furnished as well.
Real Estate Market and Short Term Rental in Panama City
LADISLAS MAURICE: So, I think we need to have a conversation on liquidity in in Panama City. Um because now we’re talking of a building that is one or two years old.
MATT: That’s correct.
LADISLAS MAURICE: And the developer still has units, um and on the secondary market they’re already selling cheaper. So, what’s what’s the liquidity like? Uh what how long does a typical exit take for for investors? Because we’re not in Canada or in the US here.
MATT: So, in this situation, liquidity is actually you you’re doing okay because you are still selling below the developer’s inventory. If you got in before, you know, the developer started going vertical, you get a better deal. This is again is a special test case. In this case, we have a seller that wants to sell, wants to attract more buyers, whereas in Panama normally, as you know, it does take, you know, about 7-8 months on market to sell a property.
LADISLAS MAURICE: And I’m assuming Tell would have bought off plan and cheaper than the 350k that’s being sold right now for a complete unit.
MATT: Yeah, that’s correct.
LADISLAS MAURICE: So he’s probably getting all his money back.
MATT: Yes.
LADISLAS MAURICE: So, here the play is short-term rentals more than long-term rentals, I guess.
MATT: I would say so. You’re going to have a better return on your investment if you go on that short-term route. Costa del Este is a very special case because there’s only one hotel in the entire neighborhood, and you have a lot of travelers that come here to visit the hospital for medical tourism, uh a lot of the executives that come here to visit the Latin American headquarters of those offices.
LADISLAS MAURICE: So, what are we looking at per night roughly and what’s the occupancy rate?
MATT: Right now the occupancy rate, if you were to ask the developer, they’re saying something closer to $80 to $90%. Just eyeballing it, I would say you’re closer to 70%, and the average rate per night is about $115.
LADISLAS MAURICE: So, once you take into account all of the expenses, property management, because the property manager here has a bunch of packages depending on how involved you are. So like ball park roughly?
MATT: Uh as far as a percentage goes, I think you’re going to be able to net a little over 4%.
LADISLAS MAURICE: I think it’s fairly typical of Panama real estate investments. If you do relatively well, you’ll be at around three and a half, four, four and a half percent. Net net really taking into account all the fees, the management, vacancy, um HOA, just, you know, everything.
MATT: Yeah, that sounds about right.
LADISLAS MAURICE: And compared to the other apartment that we’re going to go see in a bit, um this one is really for people who want the permanent residency and don’t necessarily want to live here, I think. I think it’s more for people who want the the plan B and access to a unit. Um because what a and you probably see this with a lot of your your clients, they come and they say, I want residency in Panama. I don’t actually want to live in Panama for now. I want to the plan B or it’s my plan A for later on. Uh but I want a place that I can still use, you know, a few weeks per year when I come down here. And this would be a a perfect place for this.
MATT: That’s exactly right. So, this gives you the flexibility to rent short-term, and if you do plan on spending a few weeks in Panama per year, this is a a perfect opportunity. Whereas the other property we’re going to see, strictly long-term. If you wanted to come and visit your property in Panama, you’re really going to cut into some of your return on investment because it is it’s a neighborhood, it’s more of a a long-term 12-month rental type of property.
LADISLAS MAURICE: Are there storage units as well in this with this apartment?
MATT: No, there are no storage units in this building.
LADISLAS MAURICE: So, what some people do here is they they’ll rent out of the apartment and they’ll they’ll have a a specific wardrobe that they really lock off. They keep a safe in there with some cash, some gold. Some people can even keep their guns. It’s really easy to get a gun here in in Panama if you’re if you’re a permanent resident. And then they kind of have their their plan B and and all that. So, some people like to do this.
MATT: Some people have, you know, like an owner’s lock-off closet. Absolutely. Also around the corner, there’s uh offsite storage, air condition storage. So if you do have more stuff than you can fit in your condo, that’s an option.
LADISLAS MAURICE: And then the good thing is you have an actual address, um so if you’re planning on using this address for whatever banking purposes, let’s say, then you you can give a legitimate address and if things get sent by mail, then you can always ask your tenant or your property manager to receive the mail. So this this works quite well.
So, now we’re going to go to the next uh building, but in town, right?
MATT: That’s correct. It’s uh Rivage. It’s on Avenue de Balboa, along the iconic waterfront of Panama City.
LADISLAS MAURICE: And there we’re going to do really the numbers in detail detail for the long-term rental market. All right. Let’s go. All right, thank you.
Life for families, schools and weather in Panama
LADISLAS MAURICE: Nice car.
MATT: Thanks.
LADISLAS MAURICE: So it’s the same car you had last year when I came, right?
MATT: It is, it’s my Chinese car, Changan.
LADISLAS MAURICE: Nice Chinese car.
So, you’ve had this car for how long now?
MATT: Uh a little over two years.
LADISLAS MAURICE: Okay. So I remember last year, some people were telling you, oh, you’ve had it only for one year, it’s a Chinese car, it’s going to fall apart, like in a few months. So, two years on, how how’s the car doing?
MATT: I’m as happy with this car as I have been with any other car. Uh, my previous vehicle was German and I really don’t see much of a drop off.
LADISLAS MAURICE: Really?
MATT: Yeah.
LADISLAS MAURICE: How many uh miles did you drive?
MATT: So, I’ve had it over two years and I just hit 50,000 kilometers this week.
LADISLAS MAURICE: And no major issues, no replacements, nothing.
MATT: None whatsoever. Has a 100,000 km warranty, which is part of the reason why they hooked me.
LADISLAS MAURICE: Nice. And how much cheaper was it compared to Japanese or Korean cars?
MATT: So, the other car I was looking at was about $85,000 and I bought this for 32.
LADISLAS MAURICE: What was the other one for 85?
MATT: It was an Audi Q5.
LADISLAS MAURICE: Okay. Audi or Chinese? 85 versus 32.
MATT: Yeah.
LADISLAS MAURICE: Yeah, I can see the appeal, right?
MATT: I could buy two and a half of these for the same price and the warranty is is similar in uh comparison changes.
LADISLAS MAURICE: So, this is why European and North American governments are imposing tariffs on Chinese cars is because they’re that cheap and that good.
LADISLAS MAURICE: So, the next apartment we’re going to see is a two-bedroom apartment, right?
MATT: That’s correct. Two bedroom, two full baths, plus a maid’s quarters, definitely something that would be appealing for families.
LADISLAS MAURICE: So, tell us about families moving here, like what’s the school situation like?
MATT: So, you’re definitely going to want to enroll your children into a private school. They are a lot cheaper than what folks would be used to in North America. Really good level education and you have options between an international school on the American schedule or the Panamanian schedule, and either being English, Spanish, there’s a French school or bilingual, where half the day is in either language.
LADISLAS MAURICE: When you say on the schedule, you mean the a the academic schedule or you mean schedule in terms of time?
MATT: Well, so when they’re in class. So, most American schools uh start school around the end of summer or the end of August and go through until June, whereas Panamanians are on a different schedule. Uh their school year starts the first week of March and ends about a week or two before Christmas.
LADISLAS MAURICE: So, ultimately, you as a family, you need to make a decision, do you value summers in North America and Europe, or do you value skiing?
MATT: Or the better weather in Panama during our dry season.
LADISLAS MAURICE: Yeah.
2-bedroom condo in Panama City for 370k$
MATT: So, this is Rivage on Avenue de Balboa. It was constructed around 2011.
LADISLAS MAURICE: So, 15 years old almost.
MATT: Yep.
LADISLAS MAURICE: All right, so it definitely feels older, right? One can tell the difference.
MATT: It does. And and you’ll be able to see on the outside and the social areas, uh it’s set to the point where they’re going to redo all of the social areas, the exterior paint repaint the building.
LADISLAS MAURICE: So, how does it work? Is this all included in the HOA or are there special assessments?
MATT: It depends on the building. In this case, it was a special assessment, but some of the buildings do have enough reserve for they never have to charge that special assessment.
LADISLAS MAURICE: So for this building that we’re going to go see, what was the special assessment, roughly?
MATT: It was about $1,200.
LADISLAS MAURICE: Okay, so not the end of the world.
MATT: Right. All right, so now we’re checking out the rooftop. 66th floor above Avenue de Balboa, just about 360 degree views out to the canal, uh the ocean, Paitilla, you can see everything from here.
LADISLAS MAURICE: Wow. I don’t even know what to say. There’s so much to look at here. This is Wow, so this is Casco Viejo here?
MATT: Yeah, that’s Casco Viejo right over there, and just beyond that, the Amador Causeway. You can even see a ship just leaving the Panama Canal, and another cruise ship right behind it.
LADISLAS MAURICE: Really? Oh my God, the cruise ship looks so small next to the container ship. And down there, the locks, right?
MATT: Yeah, exactly. We pan over to the right, you’re going to see the uh Port of Balboa, and then the locks a little bit further to the right when we come down here.
LADISLAS MAURICE: Wow, and you can see also a ship going through.
MATT: Exactly right.
LADISLAS MAURICE: This is amazing. So, if you’re passionate about ships and logistics, this is the spot. This is your rooftop. And on the other side, you have full view of the city.
MATT: Yeah, from up here, you know, everything looks a little smaller, but you have spectacular views of Punta Paitilla, Punta Pacifica, even out to the man-made Ocean Reef Islands.
LADISLAS MAURICE: Which is where Tell, the previous owner wants to buy a place.
MATT: That’s exactly right.
LADISLAS MAURICE: Cool. And you also have a few units for sale there.
MATT: We do.
LADISLAS MAURICE: All right. But yeah, the rooftop is looking a little bit aged.
MATT: It is, and that was part of the special assessment. You know, after 15 years, they’re repainting the exterior. You can see the ropes for the gondolas. That work has already started. And part of that is changing the furniture, uh giving it a complete facelift.
LADISLAS MAURICE: If for $1,200 as a landlord, you end up with like a brand new rooftop that actually looks good, um that’s actually a great investment.
MATT: And the special assessment’s already been charged, so it’s not even on the new owner’s uh plate.
LADISLAS MAURICE: All right. Cool. Let’s go check out the apartment.
MATT: Let’s do it.
So the Rivage unit is two bedrooms, two bath, 177 square meters, which is about a little over 1,800 square feet. The master bedroom has its own en suite bathroom, walk-in closet. As we go down the hallway, you’ve got the guest bedroom. Right behind that, the guest bathroom. Next, you’re going to come up to the laundry room, and then check out this view.
LADISLAS MAURICE: Wow. And these sellers even opened up the kitchen so you have an even more expansive view.
Yeah, that’s a nice view, eh? $369,000. This place is big.
MATT: It’s big. You know, over 1,800 square feet.
LADISLAS MAURICE: About $2,000 per square meter, around $200 per square foot. This place is pretty much renovated. Wow. This is beautiful. Oh, the famous Panama sign there.
MATT: That’s right.
LADISLAS MAURICE: And then you can go running, there’s the running path, cycling path.
MATT: Yeah, you can go right across, run on the water. There’s pedestrian bridges all along Avenue de Balboa, so you’re not exactly dodging cars either.
LADISLAS MAURICE: Yeah, there’s one pedestrian bridge here. Another one there. I mean, it’s a bit loud, right?
MATT: It is. When you close the windows, though, you’re not going to hear it. It sounds a lot more like white noise. Obviously, we’re on the balcony. It’s about rush hour 5:00.
LADISLAS MAURICE: What’s the purpose of this here?
MATT: So, the owners actually had a young child. So, they put this up, but this is removable. It’s just hooks. You’ll see it oftentimes if they either have cats or a young child.
LADISLAS MAURICE: So, and the kitchen is pretty nice too. I mean, it’s been remodeled.
MATT: Completely remodeled. This kitchen is the only one that looks like this with the backsplash, open bar area.
LADISLAS MAURICE: I could see myself, you know, having a snack or working from here with this view. Not bad, huh? Yeah, and then you you buy this and you get permanent residency for 2,000 a square meter. Exactly. This is this is value for money. Now, is it great from a rental yield point of view? I mean, we need to do the numbers now.
MATT: Absolutely.
Furnished long-term rental numbers in Panama City
LADISLAS MAURICE: Okay, so $369,900, realistically, how much could you negotiate this down to?
MATT: I think you could probably close this one around $350 or $355.
LADISLAS MAURICE: Okay, so let’s use $355 conservatively. Uh what about the closing costs?
MATT: So your closing costs are going to be about $3,000 and that includes your lawyer, uh registering the deed with the public registry, notary, any other fee that would be associated with the closing.
LADISLAS MAURICE: So they’re they’re pretty low here in in Panama.
MATT: They are.
LADISLAS MAURICE: What would you recommend to invest to to make this place rent ready to rent?
MATT: I always recommend to furnish the property with really good furniture. It’s going to make you stand out on that rental market. So you’re looking at least $25,000 in furniture.
LADISLAS MAURICE: Yeah, I I see this just a bit too often. Uh people will come to places like this, they either want to hit the 200,000 or the 300,000 for the immediate permanent residency. They’re very focused on just being around 300,000. Often it’s a bit better to pay for units that are a bit above, so that they’re not just priced to get people 300K. This one is just that’s the normal market price. They’re not thinking of, oh, we need to get someone at 300K for the visa. And then what people do is they’ll buy a place for a few hundred thousand dollars and then they’ll put cheap furniture. It’s like, please don’t do this to yourself.
MATT: No, and you have a nice property right on the water. You’re just shooting yourself in the foot by trying to save a couple thousand dollars. It it pays for itself in the long run when you make that extra investment.
LADISLAS MAURICE: Absolutely. Okay, so 25K, I mean, that’s a pretty good furniture budget. What would be the rental, what would be the rent here, the monthly rent?
MATT: So, in this building, in the last month, I’ve seen this same exact model rent for about $2,200.
LADISLAS MAURICE: On the same floor?
MATT: Two floors up. So, same exact model, same view profile.
LADISLAS MAURICE: What is the HOA?
MATT: The HOA is $265 a month, and that’s going to cover your water. Uh there’s no gas in this building, so nothing to worry about there. It handles the care for the common areas, the concierge, that take care of the trash, and 24-hour security.
LADISLAS MAURICE: And the landlord pays for the HOA, correct?
MATT: That’s correct. The landlord is responsible for the HOA. The tenant would pay for their electricity, their uh cable, internet, any other uh service they would want.
LADISLAS MAURICE: Your company also does property management.
MATT: We do. We do property management. If the unit’s empty, we’ll come in once or twice a month just to kind of fluff and flush the toilets, make sure everything’s working okay. If there is a tenant in-house, we charge a 10% commission that caps at $250.
LADISLAS MAURICE: Okay. And then uh is there a fee to find tenants as well?
MATT: So, there is a rental commission that would be paid to any real estate agent that helps us market the property, not just to our client base, but also to all the other brokerages that are reaching out in Panama.
LADISLAS MAURICE: And that’s how much?
MATT: That’s one month rent based on a 12-month rental. Okay. It gets capped at that one month rent. So if there’s someone signs a two-year lease, it’s still just one month rent. If they sign something less, it gets prorated, so a six-month lease, it only pays half a month’s rent.
LADISLAS MAURICE: Cool. So, essentially, you do everything including using the bathroom once a month.
MATT: We want to make we want to make sure the pipes stay clean. But on top of that, you know, as part of our property management package, we also do a background check on any potential tenant, make sure they have references uh from work, from their bank, personal references. It’s never 100%, but it’s better than zero.
LADISLAS MAURICE: So, let’s say I buy this unit, I follow your recommendation, I furnish it the the way it should be furnished. I hand it over to you. You tell me, that is last $2,200 a month. What would be my expected occupancy rate?
MATT: I think in a well, I know in a building like this, it rents pretty quickly. I think you’d have it rented within a week or two.
LADISLAS MAURICE: So, I think it’s important to understand that yes, there is oversupply of real estate in Panama City. Um there really is. There is like tens of thousands of empty apartments. Uh but it’s very building dependent. And that’s often the case in markets where the real estate is quite new and there’s oversupply. You see this in Asia and in other markets across the world where the occupancy rates in some towers are really high, like basically there’s barely any vacancy, but the tower next door might be 80% empty. So, choosing the right building is very important. And we’re having a conversation before where there’s a client of yours, he’s come to Panama once or twice. And he is targeting specific buildings, right? He gave you a list of five buildings and told you, Matt, I want apartments in these buildings only.
MATT: That’s correct. We targeted buildings in a specific neighborhood that are right on the water, asked my opinion on how is the the management taking care of the building, has it stood up, and how have values been over the last decade. And so we focused it on those five specific buildings, because Panama is very building specific. I’ve seen buildings where units will sell for about $3,500 a meter, and then the exact next door neighbor, same neighborhood, is selling for $1,800 a meter.
LADISLAS MAURICE: So, you want to be very careful. And I’d say North Americans are more familiar with this sort of thinking. Um the real danger is for Europeans who come and don’t quite understand such dynamics, and who come and just look at price per square meter. Um if you’re European, you’re coming to Panama for the first time, you’re trying to buy an apartment for residency, and you’re just looking at square meter prices, it’s not going to end well for you. You’re going to end up buying a problem.
MATT: Yeah, that’s accurate. Uh it’s important to work with someone who’s talking to the building administration, get a copy of the last minutes from their last board meeting, and make sure they’re solvent as well.
LADISLAS MAURICE: And what would you recommend in terms of a budget for incidentals, a bit of a reserve to take care of, I don’t know, if something’s wrong with a tap or something?
MATT: Sure. You know, that that’s something that I would budget in about $1,000 a year. So figure about $80 to $85 a month.
LADISLAS MAURICE: Cool. So, overall, one ends up with a net rental yield taking all of this into account of a bit below 4%. Is this typical of the market in Panama City or is this a bit better than average?
MATT: No, I would say that’s pretty average for Panama City on a whole.
LADISLAS MAURICE: So, this one is pretty average, but what is better than average is the fact that it’s an apartment with full frontal ocean view, which means that there is greater liquidity as well. So, even if you can get some 4% in some other neighborhood, I think this one would sell faster if you wanted to exit, right?
MATT: That’s accurate. This building specifically has a lot of demand. It’s one of the top buildings along Avenue de Balboa, and you can tell now that we’ve closed the windows, you don’t have as much of that street noise. Um, rental market and sales market, there’s a lot of demand here.
Panama City Real Estate Investor Guide
LADISLAS MAURICE: I wrote a whole report on the real estate market here in Panama City, the neighborhoods that are interesting, the neighborhoods that you should avoid, there’s a bunch of learnings, long article. Um so there’s a link below in description. I think that these two apartments show a a decent range of some of the investment opportunities there are when you really just want to hit that $300,000 and secure that permanent residency for for you and and your whole family. You know, one is short-term that you can use, etc. And this one is just pure long-term, you can either use it yourself. I mean, nothing wrong with living in this apartment, or you just put it on the long-term rental market, you keep it for a few years, the property will maintain its value, you get a bit of rental income, and then you know that in five years time it’s easy to sell. Which is a big selling point in Panama City because selling is not easy, but this one is easier.
MATT: That’s correct. It’s easy to buy, it’s could be a little bit harder to sell. So, you know, make a make the right decision the first step.
LADISLAS MAURICE: And you’ve been doing Panama real estate for how long?
MATT: I’ve been here for doing this real estate for six years.
LADISLAS MAURICE: Six years, and married to Panamanian, so you’re practically local.
MATT: At this point, I’d like to think so.
LADISLAS MAURICE: Cool. So, if you want to get in touch with Matt, Matt can help you with uh anything Panama City real estate related, even a bit along the coast, close to Panama City if people prefer a beach property.
MATT: Absolutely. Uh, our sales territory goes to about two hours outside of Panama City. We’ll even range into the mountains if you’re looking for a cooler climate.
LADISLAS MAURICE: So, there’s a link below in the description to get in touch with Matt. Matt, thank you very much.
MATT: Oh, thank you. Likewise.
LADISLAS MAURICE: Make sure to download my free ebook, 12 Mistakes to Avoid When Investing in International Real Estate, which you can find on my website, link below, and feel free to follow me on Instagram @thewanderinginvestor. I look forward to hearing from you.
