Buying Panama Property | 5 Important suggestions to consider
Buying Panama Property
Panama has recently established itself as an ideal nation to do any kind of business, however one of the most common and successful has been residential real estate. Investing in that country generates important opportunities to generate large dividends as a result of its strategic geographic location, huge productive potential and natural resources with a fairly solid economy. However, the people who are interested in buying Panama property should be aware of the general terms of this country, what is the climate for the investment and everything related to social, political, labor and economic matters.
The multiple tax advantages offered by the Panamanian government in terms of real estate investments, combined with the favorable balance of the economy in this Central American country in recent years have generated an increase in the interest of many entrepreneurs, especially Europeans, to invest in Panama in real estate.
1- Locate the areas that suit what you are looking for
As a result of the high growth that has been generated in Panama City, today there is an important real estate offer both houses and apartments.
Among the main residential areas you could consider if buying Panama property in the City are the following neighborhoods: Marbella, Punta Paitilla, Punta Pacifica, Altos del Golf, Bella Vista, Obarrio, San Francisco, Coco del Mar or Costa del Este. In the outskirts of Panama there are also comfortable residential areas such as Albrook, Las Cumbres, Clayton.
At this point always consider carefully selecting the location in which you will invest in real estate, as this will ensure proper valuation and ease of sale in the short or long term. Actually there are many elements that should be considered in terms of the choice of the area, since an apartment in a commercial area is not the same as a luxurious penthouse overlooking the sea. Likewise, a penthouse in a middle area is not the same as that penthouse in a medium or high area.
Similarly when buying Panama property should take into account if you also want to establish some type of business which is the most stable area for such trade, and is that for example if you are interested in installing a store swimsuits, ideally in a beach area and not in Panamanian cities that do not have access to the sea or are not even close, because although there will be people interested in acquiring this type of clothing, there will be no the same number of interested parties as in an area that has nearby beaches.
2- Buying Panama Property | Contact a professional in the real estate field
It is always important and necessary to contact a professional in the field, as it will be of great help in what concerns the meeting of projects or properties for sale. In the case of Panama, it is always advisable to buy through companies or companies, as it ensures that it is a trustworthy investment.
It is also recommended that you check our real estate portal before starting this procedure, as you will surely find excellent ads for buying and selling properties in Panama and anywhere in the world.
The real estate agents will not advise you only with respect to the properties that are currently on sale, but also give you advice on the property you need taking into account the number of people who will live there and of course the budget that you have available for it.
Generally said real estate agents charge 5% of the total cost of the property, amount that must be paid at the time of signing the contract of sale of the property, that is, when it has finished negotiating the property, whether new or used.
At this point it is important to highlight that for this contract to be legally binding in Panama it must be in its entirety in Spanish, so it is important to emphasize that what you will find almost always is a contract in Spanish, with an exact translation into English Incorporated. If your contract is only in Spanish, it is important that you ask your real estate agent for an English translation, because regardless of whether or not you speak that language, it must be there, but if your agent gives you a contract that is reviewed only in English, we recommend that you move away from there, because surely something strange is happening, or you are negotiating with novices, which obviously is not favorable for you.
Buying Panama property may look as a very complicated field but in reality if done correctly you can enjoy it and make money along the way
3- Establish contact with a bank if you need a mortgage
Each banking establishment usually has its rules or requirements when offering and approving mortgage loans, however in terms of the main features we can highlight the following benefits:
Financing up to 80% of the value of the property for Panamanians.
Financing up to 70% of the value of the property in the case of foreigners.
30 years to pay.
Competitive interest rates.
Form of payment: direct discount or debit account.
Since most of the investors who acquire real estate in Panama are foreigners, Panamanian banks have decided to reduce the restrictions on loans to people who do not have Panamanian citizenship. As a result of the broad growth of non-resident investors, they can obtain financing benefits of up to 70% of the purchase price for a period of no more than 25 or 30 years, depending on the bank with which the loan is being planned.
However, at this point there is an age restriction for investors who are over 75 years of age, which means that to qualify for a full year’s term of 25, the applicant must be 50 years old or younger. If for example the person who wishes to be benefited with the loan is 60 years old, the maximum term that he could receive is 15 years.
In this same point we consider important to note that loans obtained from a Panamanian bank are not reported to your credit report from your country of origin. In other words, this debt is independent of what it may have in other countries. However, the additional debt in your credit report will lower your credit score and it will be more difficult for you to obtain another credit in your country when your monthly debts are counted. This mortgage will be shown only in your Panama loan and will be helpful in establishing a credit base and banking experience for any other assistance you request in the future in Panama.
Types of loans for purchases and refinances available in Panama
According to Scotia Bank, among the requirements you need to obtain a loan as a foreigner, there is a copy of the contract, a work letter, personal income tax returns, a copy of the passport, among others.
4- If you do not have a hurry, choose the properties that are still under project
If when Buying Panama Property you decide to buy an apartment or a house in Panama and have no hurry regarding the delivery date, we recommend that you prefer those that are in draft since the cost is lower and when you receive it, at the end of the established time, your price will be higher and you will have won in your purchase.
Also at the time of choosing a property that is still in plans, it has a greater possibility of making changes on it, that is, according to each real estate company it is possible that it can make decisions about the infrastructure, the materials that will be used to decorate said property and even the location, and is that in the case of developments you can choose according to availability which is the one that will buy, in the case of buildings, you can also choose according to the available properties the floor where you want to live
Even this type of actions can be done from home through the web and without the need to travel to Panama, however we recommend that in this case opt for companies with proven experience and responsibility, that is, do not trust any portal you find On the web, it is important that you go further and investigate the reliability of this company, after having verified that it is a serious agency, you can start the procedures, request the plans and choose the property that best suits your tastes, cancel the initial fee and travel when the property is ready to be ready, if you wish.
In this case, most projects require a total of 30% before the property is delivered. A typical initial payment scheme is the following:
10% upon signing (less money put in deposit)
10% when starting construction
10% three to six months after construction started
5- Remember that the delivery dates of the properties are not always exact
Now, at the moment of signing a contract when buying Panama property, a delivery date for that property must be established, either on a project that is being built or a property that is already ready, regardless of whether it is first class. or second hand.
Usually or almost always that date of delivery of property is not fulfilled, so if you and your family are planning to move immediately, that is, just on the date that appears in the contract we recommend that you take precautions, ie If you as a foreign investor are staying in a hotel or paying a rent, you will most likely have to extend your stay there, since the delivery could take a couple of days more.
Similarly at this point we suggest that once you have signed the contract of sale of a property is necessary to request either the real estate agent, the construction company, the lawyer or the seller a copy or receipt confirming this transaction, since it will be the only way to demonstrate that you have done such a business, and in case of any irregularity or mishap you can use it for your defense, especially in the case of scams.
Finally there is another suggestion that we consider equally important, and that is that this contract (the purchase and sale of a property) must be translated into your language of origin, that is, although you understand Spanish you must request a copy of it in your language of birth, since there may be some technical words that you do not understand, so it is important advice that you also read the conditions in your language.
Although most of the property sales in Panama are carried out without any difficulty, in some cases fraud or fraud may occur. That is why we recommend you to inquire before any transaction about the property regime of the country, the real ownership of the property and its urban nature. For this it is important that you hire the services of a lawyer or Real Estate to advise you before negotiating the purchase of real estate.
Keep in mind this 5 simple suggestion if you seriouly considereing buying Panama property and for sure the purchase will be easy with no regrets down the road.
Find in our data base which foreclosed properties are available to buy all over Panama, visit our home page Click Here