Panama Investment Properties Averaging 4.5% Net Return in 2017
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Panama Equity currently manages and leases a portfolio of 63 apartments in the downtown core of Panama City, Panama. This article was written for guidance regarding panama investment properties
The average cash on cash return for a property located in Panama City is 4.5% on purchases made within the last 5 years. This is not taking into account bank financing which is currently 6 – 7% for properties designated as “rental use.”
Holding costs include the following:
Homeowners Association Fees
Anywhere from $1.25 – $2.25 per square meter, or between $0.12 – $.0.22 per square foot. This covers building gas, security, and common area maintenance.
Property Management:
Most property management companies will charge 10% of the gross monthly rent to manage the unit, collect the rent, handle repairs, and deliver statements.
Realtor’s Commission:
Most real estate agents in Panama will charge you the first month’s rent of a 12-month lease as commission.
Taxes:
All new buildings have some level of tax exoneration. This is based on the registered value and when the building was completed. When there is no exoneration, property taxes are based on a table and will be 2.1% or less per year of the registered property value. Income taxes on the rent depend on the ownership structure.
Water/Trash:
Most leases have the owner paying for water and trash pickup. This is generally under $40/month for an apartment or home.
General Maintenance:
Less on newer buildings, we generally budget in 5% of the gross monthly rent.
Special Assessments:
Vary by building, but for large projects like painting the facade, plan on roughly ½% of the property value every 5 years.
The tenant:
In Panama is responsible for paying for electricity and internet.
- Depending on the property, you can plan on anywhere from 15-45 days vacancy per year.
Panama Equity Real Estate
Panama Equity Real Estate was founded on a commitment to deliver a professional real estate experience to all of our clients. Our real estate agents understand the concept of working hard, working smart, and always doing what’s right. We appreciate the trust that our clients put in us, and are always looking to improve the way we deliver the Panama Equity experience. Contact us today to start looking for your panama investment properties!
Kent Davis, founder of Panama Equity Real Estate, is a leading expert in Panama’s competitive real estate market. Originally from Honolulu, Hawaii, he holds a Marketing Information Systems degree from James Madison University. After a successful corporate career managing multimillion-dollar inventories at Hajoca Corporation, Kent pursued his dream of living abroad, moving to Panama in 2007.
Driven by an entrepreneurial spirit, he established Panama Equity to connect buyers, sellers, and investors with Panama’s top properties. Known for his transparency, expertise, and market insights, Kent has helped hundreds navigate Panama’s real estate landscape. Fluent in Spanish, he frequently publishes market reports to empower clients with informed decisions.
Beyond real estate, Kent is passionate about Panama’s culture, landscapes, and surf-friendly beaches. He lives in Panama with his wife and three sons, embracing the vibrant lifestyle the country offers.
