If you’re considering a real estate investment, looking outside your home country may seem like a crazy idea at first glance. When you mention the idea to your friends, they may suggest you’ve lost your mind. But if you dig a little deeper, you may find it makes perfect sense, and they are the ones who are crazy!
With the promise of higher taxes and the possibility of capital controls, this may be the ideal time to move some of your assets offshore. Once you start looking around, you’ll soon realize that Panama is a great choice for real estate investment today.
Why Panama? There are many factors, of course, so let’s narrow it down. Here’s a look at some of the reasons to buy real estate in Panama.
First, it’s a safe investment because, overall, this country is stable. While most of the world was reeling from the implosion of the housing bubble in the US and elsewhere, Panama barely felt it. The banking community here is far more restrained and simply does not engage in many of the questionable activities that resulted in disaster for other institutions. There was a slowdown in growth in 2009, but since then Panama has rebounded with a vengeance. In a word, the current real estate market is robust, and we feel Panama is well positioned for continued growth. As an option for asset diversification, Panama is an excellent choice.
Next, in a word, infrastructure. Say what you want about the U.S. military, but they know how to build roads, bridges, airstrips and canals! The presence of American forces in Panama for so many years laid a very solid foundation for infrastructure in the country. Since the U.S. pulled out and turned the canal over to the Panamanians, that foundation has served the country well, and it is generally maintained. Panamanians are proud of the success they have demonstrated in managing the canal and are making the necessary investments to move forward in the 21st century. Current and planned projects recognize the need for updating older systems and expanding to meet the demands of population growth.
Third, it’s economy is booming. Here are some numbers for you: Economic growth- 7.8% in 2010, 10.8 % in 2011, and 11.0% in 2012; Unemployment rate- 6.5% in 2010, 4.5% in 2011, and 4.6% in 2012. What developed nation wouldn’t drool over statistics like this? Projections for 2013 are just as good. As a result, investors from all over the world are bringing their money to Panama. In addition, unlike many other Latin American and developing countries, Panama has a well established, large middle class who run their own businesses, send their kids to private schools, and love to shop for the latest gadgets. In many ways, they are the backbone of the economy and add further stability.
Next, it is close to North America, in more ways than one. Many of our readers and clients are North Americans, so we realize this is an important consideration. Panama, often called the hub of the Americas, doesn’t cost too much and is easy to get to, by plane, boat or car. Sure, you could invest in Malaysia, but how often would you actually go there? Several airlines have regular flights to Panama City, and from there you can rent a car and see the entire country in a week or two. Not only is it close and small, Panama lies in the Eastern Time Zone just like New York and Miami, uses 110-volt electrical service, has excellent cell phone and internet services, and sells gasoline in gallons. And did we mention that Panama uses the US dollar as currency? That’s right – no currency exchange needed. Easy, right?
Last, but not least, it has great weather. Even if you don’t plan to live in Panama, climate is still a consideration. When you own real estate here, you never have to deal with frozen pipes, cracked fixtures, power lines or branches downed by ice, heavy snow piled on the roof, shoveling the driveway… or any other hazards related to cold weather. Never! Sitting below the hurricane zone, you never have to worry about damage from hurricane force winds or flooding. Just enjoy the sunshine and warmth of the tropical climate when you’re outside and the cool freshness of the air conditioning when you’re inside.
We have plenty more reasons to invest in Panama that we’d love to share with you. Just drop us a note or give us a call and we’ll fill you in.