Why investing in Panama is a great way to diversify now
With current U.S. real estate prices surging out-of-control, let’s look at five reasons why global real estate investing in Panama can be a great way to diversify your portfolio.
Many U.S. properties are being sold for 10-22 percent over the asking price. On top of this surge, many buyers are paying the sellers closing fees, waiving inspections, and competing against many others for the same property – which reduces cashflow opportunities and equity for the buyer/investor. The average home price in the U.S. is now $350k nationwide and $779k in Los Angeles, making investing out-of-reach for many stateside.
So why should real estate investors consider Panama, and why now?
1. Panama City is a booming international business hub.
We shifted our global real estate investing from Costa Rica to Panama in 2012 primarily because it is a much stronger business hub versus a tourist destination. The country is also investing in their infrastructure by expanding the Panama Canal, along with building bridges, roads, and a new metro. Panama City is also investing in a new Johns Hopkins-affiliated hospital, medical housing, corporate housing and convention center, which will accommodate up to 25,000 people at once, which all strengthens this international business hub. And this is just the beginning for Panama City. There is a new HOME Port Cruise Ship Terminal, the fourth Panama Canal Bridge is under construction, and new airport, which is larger than the existing Tocumen Airport. Also, Panama is predicting over nine percent GDP in 2022.
2. Make money when you purchase a property in Panama.
When purchasing property, it is important to make money in the buy on each DEAL where there is cashflow, existing equity and/or a forced appreciation opportunity. The majority of investors make the mistake of purchasing real estate at full fair market price, and then expecting appreciation and making a profit on the sale. This walking into income-producing properties approach is the difference between a novice and a professional real estate investor. Our education programs help investors make money from the get-go. We vet the developers, the project, and the location prior to your arrival, and we will ONLY show you projects that we are personally invested in or invested with that same developer. We negotiate the “investor pricing” for you and you know you are buying at the best prices available in the marketplace.
3. There are still great off-market deals.
Based on our long-term relationships with preferred developers and their exclusive opportunities, we can still find opportunities that are not available on the market. To find them for you, My Panama Vacation Realty takes investors on VIP tours for a maximum of 14 people at a time. It’s a true real estate investment education VIP Tour, and it’s always best to get your “boots on the ground” when buying real estate investments.
4. Affordable “Plan B” homes.
Many investors are also looking for “Plan B” opportunities. This demand has become even more prevalent during the pandemic with more people purchasing second homes in global destinations. Plan B investing is where people from any country are looking for at least residency in another country or potentially citizenship (where they can have dual citizenship) and a second passport. Panama makes it easy to get a temporary tourist visa. You can also get a second residency quickly within 60 days if you invest in at least $300k in real estate and begin the process of qualifying for a passport after a five-year resident status. Most other residency programs require a two-year timeline to achieve the resident status.
5. Affordable living based on U.S. dollars with great tax breaks.
The average cost of living in Panama is very affordable compared to most U.S. cities. The range is $1,120–$4,000 per month, making it an excellent option for expats, retirees, and an increasing number of digital nomads. It’s also a U.S. dollar-based economy, and you do not need to speak Spanish. For real estate investors, there is a high demand from renters who are visiting or relocating. Panama’s legal and tax structures also make it a great tax haven. Panama does not impose income, corporate, capital gains, or estate taxes on offshore entities that only engage in business outside of the jurisdiction. We recommend talking to a tax advisor as laws change to find out what applies to your personal situation. In addition, since we are not licensed agents, we do not provide legal, tax or financial advice.
Overall, real estate buyers can still find highly desirable investment property in Panama for about 30-50 percent less than a comparable property in many areas of the U.S. Consider these reasons for why Panama makes sense now for global real estate investment diversification.
Evie Brooks (Atlanta, GA and Veracruz, Panama) is a former “Rich Dad Poor Dad” Advanced Trainer, Real Estate Educator/Investor, and My Panama Vacation Realty Founder, who has guided thousands of investors for 24+ years through the process of locating, evaluating and analyzing transactions for cash flow and ROI (Return on Investment). Evie has been a keynote speaker and trainer in 13+ countries and 30+ states in the United States. As a disclaimer, Brooks and her employees and affiliates are not investment or tax advisors, and do not offer investment advice. To learn more, visit https://eviebrookspanama.com/