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

Homeownership is one of the great milestones of adulthood. Additionally, investing in real estate 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. For every dream home at a great price or money-generating rental property, there is an unforeseen disaster or trustworthy seller. This is as true in Panama as anywhere else.

So if you’re looking to invest in real estate in Panama, there are a few things you should know. Taking these five tips into account will ensure you make a sound and (hopefully) hassle-free investment 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 where 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 is 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, which could cost you tens of thousands of dollars more than you expected.

When it comes to dealing with online listings, it is a matter of asking and confirming that whoever is listing the property has had a very frank and transparent conversation with the seller such that the taxes are included 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 deceitful 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 and always ask for all of the information you need to make an informed decision.

It is also important to be aware of additional inclusions such as appliances or furniture that may be 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.

Furthermore when looking at new developments the developer in Panama will often deliver their units with all the floors and plumbing fixtures installed. However, in most cases appliances, air conditioning systems, lighting or curtains will not be 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 the entire available 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 just means the developer only has 20 units they are looking to sell at this particular moment in time, oftentimes holding back the choice inventory for when the project nears completion..

If you really want to make the best possible investment in a new development, it’s useful to know what all of the risks and benefits are. This involves asking the right questions to the right people.

Talk directly with the developer and find out the status of financing on the development from the bank as financing often relates to the project construction timeline, since most developers will be using bank financing to build.

Try to get a sense from the developer about how long it took them to get to this point, whether they’re on schedule with construction and sales and when they anticipate the development to be finished. As much as possible, get these answers in writing.

There are a lot of other questions you might ask when you look at pre-construction and the best way to guarantee that you don’t get scammed is to find an experienced agent that has knowledge and most importantly experience about which firms and developers are reliable and which ones are 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 set a budget, select a property, and proceed through negotiations.

Here are some of the additional costs you’re likely to encounter on the buy side.

  1. You will have to register the deed to the property.
  2. If you purchase 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 also a number of 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 created equal and you want to make sure to find a reliable and experienced lawyer who has your best interests (not his or her own paycheck) in mind.

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 multiple questions, pay attention to whether or not the lawyer’s response addresses all of them. Quick and effective email communication is a huge plus, while the opposite is to be avoided 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 when you connect with a law firm via a referral, you get in touch with a partner 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, dotting 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 that are involved in a property transaction. An honest agent has it in his or her best interest to keep things moving because, at the end of the day, the agent only gets paid once the deal closes.

Don’t just settle for an agent who’s competent. You want a realtor who is going to add value. Ideally you want them to help the deal close quickly, help you understand what the market is like and help you understand what constitutes 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 up front and find out if your agent is going to get 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 go a long way to 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!


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