Investing in Real Estate in Panama 2020: What You Need to Know Before

Homeownership is one of the great milestones of adulthood. Additionally, investing in real estate in Panama can be a smart way to generate income and grow your wealth. If done well. While there is plenty of joy and lots of profits to be had in the real estate world, the converse is also true. This is as true in Panama as anywhere else.
So if you’re interested in investing in real estate in Panama, there are a few things you should know. Take these five tips into account to ensure you make a sound and hassle-free investment. All without getting swindled or blindsided by surprise circumstances. This is one read that is well worth your time.

1. Beware of Listing Prices Online

Most buyers like to assume what you see is what you get. Unfortunately, that isn’t always true when you look at property listings online. When you see a property listing online that isn’t on a trusted agent’s website, a red flag should immediately go up. There is a good chance that the price on the property listing is likely deflated. There are almost always costs that the seller may not include, most commonly taxes.
Many sellers still operate with an old-school mentality. The mindset that they can sell a property by selling the shares of the corporation to avoid paying taxes. This loophole is no longer viable. In fact, when sellers attempt to avoid taxes in this way, the buyer is the one who is at risk.
Let’s say you see a property that listed for $400,000. Before you strike up a deal to take advantage of what seems like a great price, get some more information. It is very possible that the property does not include the taxes in the sales price. This could end up costing you tens of thousands of dollars more than you expected.
When it comes to dealing with online listings, you need to ask and confirm that the taxes are in the price. The worst thing that can happen is that you make an offer and put down a deposit without knowing the actual price of the property.
Insist that your offer price does not entail that you pay the taxes on the deal on behalf of the seller. While these listing prices don’t come along with every property, they are common enough to be wary of them. There is no way to spot an uninformed or tricky broker right off the bat. The only way to safeguard yourself is to be upfront and direct. Always ask for all the information you need to make an informed decision.
It is also important to be aware of extra inclusions such as appliances or furniture. These are sometimes pictured but not always included. Meaning you will have to add the cost of buying the appliances or furniture that you want or need in the property.
In new developments, developers will often deliver units with all floors and plumbing fixtures installed. However, in most cases appliances, air conditioning systems, lighting or curtains are not included in the price. Not being aware of this could result in costs of $5,000 or more!

2. Developer Price Lists

When you look at a prospective investment in a new development, it’s important to navigate the developer price lists. Developer price lists do not always include all inventory in the project.
For example, when a developer presents a price list that shows only 20 apartments, that does not mean that only 20 apartments are available. That means the developer only has 20 units they are looking to sell at this particular moment in time. Oftentimes they hold back the choice inventory for when the project nears completion.
If you want to make the best possible investment in a new development, it’s useful to know the risks and benefits. This involves asking the right questions to the right people.
Talk with the developer and find out the status of financing on the development from the bank. Financing often relates to the project construction timeline as most developers will use bank financing to build.
Try to get a sense from the developer about how long it took them to get to this point. Ask if they are on schedule with construction and sales and when they will finish the development. As much as possible, get these answers in writing.
The best way to guarantee that you don’t get scammed is to find an experienced agent. One that has the knowledge, experience and knows which firms and developers are reliable or not. An agent will also know how to vet developers and ask the right questions for you so you don’t have to worry.

3. Additional Costs of Investing on the Buy Side

Like most big purchases in life, investing in real estate in Panama tends to come with some unexpected costs. It’s important to at least be aware of these when you proceed through negotiations.
Here are some of the extra costs you’re likely to encounter on the buy-side:
  1. You will have to register the deed to the property
  2. In pre-construction, you might have to contribute to a homeowner’s fund initially. 2.5 would be from the comment above.
  3. All smart buyers use a lawyer, and lawyers come with fees. Find out ahead of time how your lawyer bills clients and what to expect.
  4. There are many banking and legal fees that will come up. If you take these into consideration during negotiations, you can often get the seller to pay for the appraisal or cover some other fee.

4. Get a Great Lawyer

As suggested above, having a lawyer to help you buy property in Panama is a must. Even if you buy directly from the seller and don’t use an agent, consider a lawyer to be a necessity. All buyers want to mitigate their risks, and this is one way to do so.
While getting a lawyer is easy enough, getting a good lawyer is another question. Not all lawyers are equal. You want to make sure to find a reliable and experienced lawyer who has your best interests in mind. Not his or her own paycheck.
When you search for a solid lawyer, there are a few ways to get a feel for the competition. Communication is essential. Reach out to prospective lawyers via email and see how quickly they respond. If your email includes many questions, pay attention to whether the lawyer addresses all of them. Quick and effective email communication is a huge plus and you should avoid the opposite at all costs.
It’s also best to find lawyers from referrals. Ask around with friends and colleagues and see who they recommend. Even when you work with a referral, though, do your own screening. Oftentimes, you connect with a law firm via a referral but then get delegated to a junior partner.
Make sure your lawyer has experience with real estate transactions. Versus an immigration attorney or some other inapplicable field.

5. Get a Real Estate Agent 

Buying property in Panama can be a complicated (and sometimes convoluted) practice. Your best bet to ensure things go smoothly is to find a good real estate agent. An experienced agent will be able to keep the ball moving through the process. They will dot all the I’s and crossing all the T’s along the way.
A strong agent will know which questions to ask and to whom. He or she will be your point of communication between the lawyer, the developer, the seller, and all of the other parties involved in a property transaction. An honest agent has it in their best interest to keep things moving. At the end of the day, the agent only gets paid once the deal closes.
Don’t settle for an agent who’s competent. You want a realtor who is going to add value and help you to close the deal quickly. You want them to help you understand what the market is like and what is an appropriate but savvy offer.
Oftentimes in Panama, the buyer’s agent also represents the seller. While this isn’t always a terrible situation, it is one that you definitely want to know about. You need to ask for transparency upfront. Find out if your agent will be paid by the seller on the transaction. Regardless of the details of payment and representation, you want to make sure your agent is favoring you and no one else.


So there you have it. These five simple tips for investing in real estate in Panama can keep you out of a world of trouble and even help you enjoy the investment process.
Asking questions, assembling a trustworthy team, and keeping your wits about you will all make the process of purchasing property a smooth one.  


  1. Frank C Leotti

    on said  

    Hello Kent,
    You were referred to me by Jackie Lange of Panama Relocation Tours. I would like to find out about acquiring apartment complexes (30-150 units) in Panama. I am a real estate investor from the US and may be interest in possibly moving there in about a year or two. In the meantime, I would like to know if there are properties in the 30-150 unit range that would meet my criteria. Would you mind answering the following questions if you can:
    1. Are such properties available in larger populated cities such as Panama City, Colon, David, San Miguelito, Tocumen and any other you suggest?
    2.What type of financing is available such interest rate & terms and max loan amount?
    3. What is a typically occupancy rate or vacancy rate in Panama City or David?
    4. What is a normal expense for such properties?
    5. Are there good management companies?
    6. Would I need to get a pensionado visa to buy such a property or get a loan?
    7. Are tenant/landlord laws strict and do they favor more toward tenant or landlord?
    8. What would a rental range be for a 1 bed unit, 2 bed unit & 3 bed unit?
    Sorry for the numerous questions but this would help in my decision to acquire such properties.

    • Kent Davis

      on said  

      Frank, thanks for your questions. We’ve already spoke on the phone but I’d like to acknowledge that these were great questions and that Im always happy to answer any potential investor’s questions!

      • Robert Di Grappa

        on said  

        I am currentlt living in Missoula, Montana, where own a 2 bd. 2 bath house in a newer development, (13 yr.) and I’m am tired of winter. I am also a 100% disabled veteran. This is my fifth property which I have purchased with the VA. How does that work in Panama and are there perks for vets like myself? I’m abulatory which means I can get around fine. Also, I am almost 70 in July.


Leave a Reply

Your email address will not be published. Required fields are marked *