Posted by Maria Arias on April 20, 2017 | Real Estate Advices | 0

Tips to Buying Rental Property in Panama

Buying rental property in Panama cannot be viewed as a passive investment. Residential rental property ownership can provide short term and long term income.

First of all you must educate yourself on the Panama real estate and rental market. It is important to buy a property which is affordable to you, making sure that the monthly rental income will not only cover your mortgage payment but also the regular and unforeseen repair and maintenance expenses.

There are some important factors you must know before buying a rental property in Panama such as: a good neighborhood, near schools, accessible transportation route and more. 

It is best to consult with a broker who is knowledgeable of Panama real estate prices.

These tips will help you find a property that will maximize profits in your investment.

1. Buy below market value

When buying rental property in Panama you need to ensure that you purchase the property at a low enough price to make a profit, especially if you are taking out a mortgage. The income earned from tenants needs to be more than your expenses such as: mortgage payments, repairs, maintenance, etc.

If property values drop, you will still be able to charge tenants enough to cover your mortgage, and in the long-term sell the property for a profit. 

2. The right neighborhood

After you have a solid understanding of property values, it is time to choose the area for your rental property in Panama. You will need to decide where you want your property to be located. Panama has a large rental market for middle to high end apartamen in the city, but it doesn’t stop there. There are also rental properties on beaches, islands and in the mountains. 

High-end apartments for rent in Panama City are targeted towards foreigner vacationers, expats, and traveling business executives. Popular neighborhoods for these types of tenants include Punta Patilla, Punta Pacifica, Casco Viejo, and Avenida Balboa. Middle class neighborhoods like San Francisco, El Cangrejo, El Dorado, Bella Vista and others are good places to live. 

3. Amenities

If you are interested in renting to quality tenants, you will want to ensure they will have access to public and private amenities. For example, parking is a big issue in certain neighborhoods of Panama City. Many buildings in Panama City offer a pool, gym, private parking, social area, and a 24 hour security guard. Make sure you have all this type of amenities. 

4. Quality of construction

The more work the property needs the more money you will have to put into it in order to receive quality tenants.  If you do need to put some work into the property, try to do it before the tenant moves in, as doing it afterwards can prove to be difficult. 

A property which has solid construction that utilizes standard materials is typically the cheapest and easiest to maintain. If you buy a home, review its landscaping. Complicated landscaping can be expensive to maintain. 

It is recommended that you seek the services of a licensed home inspector to help you identify any potential maintenance issues, as well as provide estimates for any repairs. 

5. Rental property management

If you do not live, or are not planning to live full-time in Panama, then you need to consider how the rental property in Panama will be managed. Through long experience, a property manager will know exactly where to market your property and find the right tenants.

This is a very important aspect of buying a rental property in Panama and making profit. TDI Real Estate can provide you with a complete service

 Best neighborhoods in Panama City