Questions to Ask When Buying a Condo in Panama
Liz Larroquette’s no-BS approach to advising clients on real estate has earned her the respect of thousands of expats who have relocated to Panama, and many more who are considering relocating in the future. See what there is to discover at LizLarroquette.com. Buying a condo in a foreign country is an exciting, once-in-a-lifetime experience. Still, it can be daunting- especially when you feel like you don’t know what you don’t know! I’m somewhat of a “property matchmaker,” helping to pair expats up with their dream homes in Panama. After almost 10 years of specializing in Panama’s Gold Coast, I’ve found that the best indicator of my clients’ person-to-property match often lies within these questions.
Does this qualify for the Property Tax Exoneration?
The compelling notion of a 20-year exemption on property taxes has driven many foreigners to Panama. Alas, there’s always the fine print, and this one is often overlooked or miscommunicated.
Etch this into your memory, property seekers: Only buildings completed after July 1st 2009 qualify for the exoneration, and the tax-free window is opened on the building’s original commencement- not the date you personally purchase.
This means that, depending what year the building was officially completed, most condos offer closer to a 10-15 year window of being void of property tax.
Some newer buildings, such as the Coronado Golf, have as many as 18 years left- so you always want to ask.
What’s the rental rate in this building?
Not planning on renting out your condo? Ask anyway. Inquiring into the average rental rate will tell you two things: 1. The desirability of the building and 2. Your property will be able to sustain itself should the tides of change ever come your way.
Your goal should be to acquire a property that can be cashflow positive. . Should you ever decide to travel or return home for an extended period, it’s comforting to know your property can carry its own weight.
What’s the reputation of the developer?
I always tell my clients: Never buy blindly.
Some developers in Panama are infamous for “cutting corners” to save time and costs- something you don’t want to worry about on the 30th floor! Others have a history of treating residents poorly, or misusing HOA fees. Others, such as Empresas Bern, have won awards for civil conduct and honesty, and were voted amongst the most reliable developers for “completing best product in Panama.”
Explore the developer’s history. How have their other projects held up? Do they have a history of taking care of their residents? Do they have enough money to solve issues without fining property owners? Do they give back to the community?
Is this a saturated market, or an up-and-coming area?
The real estate boom of the 2000’s spurred an arm’s race of condo construction. The result is too many buildings with vacancies, and property owners willing to go neck and neck with prices.
Ideally, you don’t want to own a condo in a saturated area. Your property value will inevitably suffer, and you’ll be forced to price competitively should you decide to sell or rent. Invest in an area that shows obvious signs of growth ahead, such as in Coronado or Gorgona area. With relatively few buildings and an accelerating level of international interest, these places offer the best possible scenario.
How far is this from …?
Panama is a developing country with large swathes of undeveloped land. If your condo is 30 minutes from the nearest supermarket or restaurant, or over an hour away from Panama City, it’s going to dampen your experience along with the property value.
Everything seems hunky-dory in the daylight, so it’s up to you to imagine what the drive would be like in less convenient times. I tell my clients to picture driving back home after a late dinner, or during a sopping rainstorm. Would it be a burden then?
What are the weekends and nighttime like?
Most property viewings take place during the weekday. Particularly if you’re in the Coronado and Gorgona area, weekdays represent the ultimate solitude. Weekends, however, are often a different story as city slickers swap their urban surroundings to relax (or party) by the sea.
Some buildings feature a relatively calm weekend atmosphere- others, not so much. It’s advisable to check out (or at least inquire) what the weekends are like in your would-be getaway. You don’t want to find that your supreme oasis turns into a madhouse every Saturday.
Asking these questions can help you avoid the most common mistakes made by first-time buyers in Panama. Keep them in your toobox; I promise you’ll be grateful you did!
All the best,
Liz Larroquette
LizLarroquette@Gmail.com
(+507) 6981-1717
P.S. Each month, I send out a VIP newsletter about what is going on in and around
Panama. To join my VIP list, visit www.LizLarroquette.com/VIP.
