Whether you’ve recently moved to Panama or have been here for a while, if you plan on staying more than a few years you probably want to consider investing in real estate. In Panama, and particularly in the nation’s capital, renting is often more expensive than buying. One of the biggest questions you’ll have to decide is—Should you buy an older home or a new development? New apartment complexes can be a great opportunity to get something shiny and ready to live in, with all the amenities included. But new constructions also come with their risks. Keep reading to find out everything you need to know about buying old vs. buying new in Panama. Pros of Buying Older Property Construction Quality It is generally accepted that construction quality is better on older buildings. The construction boom in Panama City started in 2005 and good workmen became scarce due to the high demand for their services. As a result, quality on many newer developments suffered as good workers became hard to find and keep. Pre 2005, that wasn’t an issue, meaning older buildings may not be as pretty on the outside, but nine times out of ten they’re more structurally sound on the inside. More Bang for your Buck As a rule of thumb, you’ll find better value in terms of price per square meter with older properties. While today no developer would dream of building a new apartment building without a pool or gym, that wasn’t the case two or three decades ago. If you are someone who doesn’t care too much about all the bells and whistles that come with newer apartment buildings, you can buy an older property for a lower price and save yourself the monthly fees that are required to maintain such amenities. This is an especially good option if you know you’re someone who would never make use of a rooftop pool or in-building workout facility. Accountability Before Panama’s construction scene exploded, a lot of the builders used to live in the buildings they constructed. That says something about accountability versus many of today’s developers who are just building, building, building and then onto the next project. There was a built in system for accountability in many older buildings. Even today, you can pop up to the builder’s unit and ask about why you’re having water issues and he will you know what to tell you! This obviously isn’t the case in all buildings, but it’s a pretty unique perk when it does work out. And regardless of whether or not your building is inhabited by one of the original contractors, the mere fact that this used to be common practice tends to mean higher quality construction. Fewer Neighbours A final perk of older properties is that you aren’t likely to have as many neighbors. Don’t get us wrong, neighbors can be great, but there’s something to be said for having a bit more privacy, less noise, and more room to one’s self. Since older properties are often less dense than newer ones, you’ll likely have fewer neighbors to worry about. Cons of Buying Older Property Maintenance Obviously maintenance issues tend to increase as a property gets older. And for older properties, this maintenance work can amount to more than just needing a fresh coat of paint. You might have bigger ticket fixes like replacing an elevator that’s 40 years old, replacing a roof, or bringing a building’s gas or power lines up to code. These projects can be costly, time consuming, and a bit of a nuisance, especially when they pertain to common building features and require consensus amongst multiple owners. Fewer Neighbors, Higher Costs There are two sides to every coin, and this is no exception. While having fewer neighbors can be a pro in terms of noise and privacy, it can also be a con when it comes to expenses. When there are fewer owners, there are fewer people to divide property costs between. This applies to month-to-month costs for general upkeep of the building, but also to those large-scale maintenance projects mentioned above. Resale In general, the real estate trends in Panama City have people gravitating towards newer properties. As a result, older properties are not as attractive on the resale market. Whether this is a byproduct of culture, human nature, or merely aesthetics and style, interest in real estate in Panama skews towards what’s new and shiny. If you’re thinking about purchasing an older home, it’s important to have an honest conversation with yourself about what your plans are regarding resale. Another factor to consider is that in 2019, property taxes will be cut by more than 50 percent. This means that on properties that are 20 years old and not exonerated versus properties that are say only three or four years old and exonerated from property taxes there will be less of a gap. Pros of Buying New Property Guarantees Any new construction generally comes with guarantees in the form or warranties. While warranties vary from project to project, they can always give you the peace of mind that once a building gets stabilized, you won’t be liable for any large maintenance expenses for the first few years. In an ideal situation nothing would go wrong, but it’s nice to know that if it does, you’ll be covered. Fewer Upfront Costs If you’re purchasing a home in a new development, you might be expected to put in say fifteen hundred to two thousand dollars when you first buy to fund the building administration balance. This is common practice with newer developments that can work in your favor. By making these smaller upfront costs spread out over a year or two, you can space out your purchase expenses and take advantage of the appreciation of the property value. This is especially appealing to foreigners who know they’re going to be moving to Panama, but not immediately. If you don’t need somewhere to live right away, buying a…
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