Property Investment Case Study: Panama (TPI-PM-001)
Introduction:
<h2>Why Panama? There are a lot of good reasons to buy real estate in Panama whether it be to vacation part of each year, retire or invest.</h2>
Panama is a still undiscovered, prices are low and sure to climb.
Panama beach property, priced out of most people's range, is dirt cheap compared to anything in the U.S., Europe, Canada or even Costa Rica.
Panama has great tropical weather.
Panama has low property taxes.
Panama land's low cost allows you to buy a must bigger piece of property and have the luxury of quiet and privacy that comes with neighbors that are fewer and farther between.
Panama has a low cost of living.
Panama has a stable economy with the U.S. dollar as the currency.
Panama has a stable government.
Panama has government incentives which are excellent for retirees and investors.
Panama offers a wonderful geographical diversity from cool mountains to tropical islands all within a short distance of one another.
<p>Since it took control of the Panama Canal in 1999, Panama has begun its aggressive campaign to carefully develop potential. More and more luxury hotels are being built; roads and other infrastructures are among the best you'll find in Central America. In many respects, we think Panama is more attractive than neighboring Costa Rica. And because it's still less popular than Costa Rica, travelers will find lower prices, fewer crowds and the feeling that they're discovering a well-kept secret.
"Modern Maturity", newsletter of American Association of Retired Persons (AARP), ranks one region in Panama among the top four 'best places to live abroad' in the world. International Living identifies Panama and Panama City as the best place in the world for living outside the United States.</p>
Panama is one of the safest countries in the world with the highest rating for tourist safety from the prestigious Pinkerton Intelligence Agency.
Panama is an extraordinarily beautiful country with a wide variety of residential venues including mountain, beach and city communities.
Panama City is a modern capital city with high-speed Internet, first-rate hotels and restaurants, casinos and shopping on a par with the US.
Panama has a reliable communications and road infrastructure due in part to the 90-year American presence in Panama while overseeing the Panama Canal.
Panama's cost of living is a fraction of the United States.
Panama's currency is the US dollar.
Panama has a near perfect climate.
Panama has the best retiree incentive program in the world.
Panama has medical facilities on a par with the United States.
Panama is close to the United States with direct flights to Panama from 7 major US cities.
Retirement visa requirements are minimal.
Foreigners can buy and own property in Panama enjoying the same rights and protections as Panamanians (This is very rare overseas).
<p>All you need to get a retirement visa to live in Panama is:</p>
A clean police report from where you currently reside.
A health certificate from a Panamanian doctor.
Proof you receive a minimum income of $500 a month and $100 each for any dependents.
<p>The visa process is also very simple. It's a one-time application. There are no renewals and no additional fees. Other residency programs require you to file a renewal each year. This involves time, hassle and mandatory additional fees. In Panama you can apply today for no more than a few thousand dollars and have residency for life. Your visa only takes about a month. It's fast. It's affordable. It's easy.
Panama is truly one of the best, if not the best residency deal in the world today. For the price the benefits are incomparable. Not to mention the extraordinary opportunity to be a pioneer in this decade's great retirement haven. We expect property prices to continue their rapid climb here as they did in Costa Rica when they introduced their famed Pensionado Program. It is a great chance to get in on the ground floor at an incredibly low price on what we believe to be the number one retirement haven of the decade.
That's why International Living took the plunge and set up an office here... And we employed Greg Geurin, a financial analyst from Chicago to run it. That was three years ago now. A lot has changed in that short time... which is why we've got Greg and a team of his contacts and friends in Panama to put together a brand new and completely revised Owner's Manual for Panama.</p>
Location:
<p>Middle America, bordering both the Caribbean Sea and the North Pacific Ocean, between Colombia and Costa Rica (slightly smaller than South Carolina )</p>
<p>Panama is just beginning to realize its potential for international tourism and repatriation: protected rain forests, exotic wildlife, mountains, historical sites, beaches, coral reefs, deep-sea fishing, Spanish-colonial architecture and thriving Amerindian cultures. In addition the Panama Canal, one of the greatest engineering feats of the 20th century, offers a major attraction for cruise-ship passengers and provides a significant income stream for this emerging economy. With a multitude of marinas, tours and attractions, Panama is still a somewhat hidden gem for the international tourist or investor.</p>
Economy:
<p>Panama's economy is based primarily on a well-developed services sector that accounts for nearly 80% of GDP. Services include the Panama Canal, banking, the Colon Free Zone, insurance, container ports, flagship registry, medical and health, and other business.</p>
<p>Panama offers great opportunities for Investment and a great potential for growth in the future, with mayor economic activities being Tourism, The Panama Canal, The Colon Free Zone, The Banking & Financial Sector, and Transportation there are lots of options to consider. The Panama Canal expansion which is expected to be approved in 2006 is estimated to be a Six Billion Dollar project which will bring lots of prosperity to the country.</p>
<p>A major challenge facing the government under former President Mireya Moscoso was turning to productive use the 70,000 acres of former U.S. military land and the more than 5,000 buildings that reverted to Panama at the end of 1999. The Government of Panama is also seriously considering undertaking a major $4-7 billion expansion of the Panama Canal, but a national referendum, required by Panama’s Constitution, has not yet been scheduled.</p>
<p>GDP growth for 2004 was approximately 6.2% compared to 4.3% in 2003. Though Panama has the highest GDP per capita in Central America, about 40% of its population lives in poverty.</p>
<p>Panama has bilateral free trade agreements with El Salvador and Taiwan. Panama is continuing free trade negotiations with the four remaining Central American countries and Mexico, although many of these are on hold. Panama is also negotiating bilateral free trade agreements with the United States and Singapore. From March 2001 to February 2003, Panama served as host for the Free Trade Area of the Americas negotiations.</p>
<p>A new Panama dawns. And it is positioned to become the number one retirement destination of the decade.</p>
<p>We expect a great new renaissance in Panama over the next few years... as new investments pour into the economy. Plus the Panamanian government has started a program to promote itself as a tourist destination... and the country, as mentioned earlier, is already getting attention in the popular press. Plus it's banking sector, technology parks, transport infrastructure, booming free zone, new ports and improved canal are all working together to make Panama a great destination for future investment.</p>
Property Market:
Panama is setting itself up as the New Costa Rica. It has put together the most appealing program of special benefits for foreign residents and retirees you'll find anywhere in the world today.
Now, you may be thinking: "Pensioner? Retiree? That leaves me out". Think again. Because the rules for becoming a "pensioner" and qualifying for this visa program in Panama are probably not what you expect.
In fact, anyone over the age of 18 may apply and can qualify as a "pensionado" in Panama. All you need is a guaranteed pension income of only $500 per month ($600 per month for a couple). It must be a pension from a government agency (e.g. social security, disability, armed forces etc.) or from a company. As a qualified pensionado/retiree, you will be entitled to significant discounts off the already mercifully low costs of living in Panama, including: 50% off entertainment anywhere in the country; 30% off bus, boat, and train fares; 25% off airline tickets; 50% off hotel stays (Monday through Thursday); 25% off restaurants; 10% off prescription medicines; 20% off doctor's consultations; 15% off dental and eye exams; 20% off professional and technical services; 50% off closing costs for home loans and more...
All this, and you can retire at age 18!
Examples:
Beach & Sea Front Property
From fronting on the beach or sea cliffs, to back up higher with magnificent views and cool breezes, from 10,000 square feet (1000 square meters) to 20 acres (8 hectares), from $22,000 to $90,000, there is something to fit all tastes and budgets. Some lots have road, water and power included. Many have cell phone coverage now. In addition, regular telephone or satellite internet is being planned. Those that do not have power and water are less expensive. You can drill your own well and install solar or wind power. Regardless, you will also have access to beach front facilities and to storage areas where you can leave beach gear as well as park your boat
Attractions:
No data available
Transport Infrastructure:
No data available
Local Mortgage:
No data available
Inflation:
No data available
Economic Growth:
No data available
Sunshine Days:
No data available
Annual Rainfall:
The country enjoys an agreeable tropical climate and an average daytime temperature of 80 degrees Fahrenheit, with cooling in the evenings. The average humidity is 70%. The rainy season goes from May to December. Throughout the dry season, trade winds keep the air continuously cool. In the mountains, the average temperature is between 50 and 60 degrees Fahrenheit.
Temperatures:
Winter: No data available
Summer: No data available
Property Price Inflation:
No data available
Local Currency:
Since 1904, the United States dollar has been the legal currency in Panama . The Balboa, the Panamanian monetary unit, is par valued with the dollar. Prices can be expressed in Balboas (B/.) or in Dollars ($). Traveler checks and credit cards are widely accepted. The International departure duty is US$20.00, payable in the airport. The hotel tax is 10%. The added tax value to products and services, with the exception of food and medicines is 5%.
Cost of Living Index:
<p>Panama offers a first world infrastructure but at third world cost, Panama Real Estate cost can be 1/10 of values in the United States and the cost of living is about ¼ to all mayor cities in the US . Below is a quick list of mayor living cost as reference, in many cases retirees can Sell their present Living properties, buy one better in Panama for ¼ of the cost and live a better Life Style for many years with the ¾ of their sale, with change.</p.
Cost of Living:
Boca Raton, Florida Vs Boquete, Panama
Boca Raton Boquete
Average price for 2500 sq foot home $350,000 $150,000
Approximate starting prices for raw land (per acre) $25,000 $1,000
Unskilled labor (per day) $48 $6.40
Full-time, live-in maid (per month) $1,000 $120
A beer at a bar $4 35 cents
A cup of coffee at a café $3 30 cents
A Man's Haircut $15 $1
Annual Water Bill $180 $18
Internet Access $15 $15
Cable TV $30 $30
Annual property taxes (on 2,500 sq ft home) $5,250 Nil
Income Tax:
No data available
Property Tax:
No data available
Capital Gains Tax:
No data available
Buying and Selling Costs:
No data available
Rental Yields:
No data available
Report Compiled By:
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Report ref: TPI-PM-001
Date created: 12-01-2006
