Panama real estate investment

Summary

Real Estate Without Borders: Panama Real Estate Investment

Episode Title: Panama Real Estate Investment
Host: Real Estate Without Borders
Guest: Sabrina, Panama Real Estate Expert
Release Date: April 4, 2025

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1. Introduction and Guest Background

In this episode of Real Estate Without Borders, host Dave and co-host Fosh welcome Sabrina, an expert in Panamanian real estate, to discuss the burgeoning property market in Panama. Sabrina brings five years of real estate experience, initially in Ontario before relocating to Panama three years ago to assist international buyers with real estate transactions and offshore financial services.

[00:25] Sabrina: "I've been in real estate now for, like, five years. First I was in Ontario, and then I moved here about three years ago and started to just work with international buyers to help them explore Panama and move here."

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2. Panama Real Estate Market Overview

Price Points and Prime Locations

Sabrina provides an insightful breakdown of current real estate prices in Panama, emphasizing the diversity in the market. Properties range significantly based on location and quality.

[02:54] Sabrina: "You'll have homes ranging from around $2,000 to $3,500 per square meter in prime areas like Punta Pacifica and Costa del Este within Panama City."

She translates these figures for Canadian listeners, noting that higher-end properties start at approximately $200 to $350 per square foot. Mid-range properties, such as those in San Francisco, are available around $1,500 per square meter, while more affordable options can be found widely.

[04:49] Sabrina: "You can find a condo here for $100k and up to $4 million, depending on what you're looking for."

Impact of the Pandemic on the Market

Discussing the pandemic's effect, Sabrina notes that Panama's real estate market has remained relatively stable, with only minor fluctuations during the height of the COVID-19 crisis. Post-pandemic, there is a resurgence in demand, particularly from foreign buyers, gently driving prices upward while maintaining overall affordability.

[05:12] Sabrina: "There really hasn't been honestly much of a difference. The market in Panama has been pretty flat historically, it's been pretty steady."

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3. Buyer Profiles and Foreign Investments

Sabrina highlights the diverse pool of buyers investing in Panama, primarily from Canada and the United States, but also including Europeans and South Americans seeking stability and new opportunities.

[05:56] Sabrina: "There's a big mix. You have investors purchasing pre-construction for higher Airbnb returns, retirees seeking ready-to-move-in properties, and digital nomads wanting residency."

This diversity underscores Panama's appeal as a dynamic and inclusive real estate market catering to various investment strategies and personal lifestyles.

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4. Airbnb and Short-term Rentals in Panama

A significant topic is the regulation of short-term rentals. Sabrina explains that while Panama City generally restricts rentals shorter than 45 days, the historic district of Casco Viejo is an exception, allowing for Airbnb operations without stringent limitations.

[06:55] Sabrina: "Regulations for Airbnb are primarily in Panama City, except in Casco Viejo where short-term rentals are permitted without restrictions."

Newer developments often include provisions for Airbnb use, having secured the necessary licenses, making them attractive for investors aiming for higher returns through short-term rentals.

[08:10] Sabrina: "The newer developments are designed specifically for expats and tourists, often yielding 8 to 12% returns."

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5. Pre-sale vs. Resale Properties

Transaction Processes and Payment Structures

Sabrina differentiates between pre-sale and resale transactions, emphasizing that pre-sale offers more flexibility and attractive financing options for investors. Typically, foreigners are required to make a 30% down payment, which can be structured over time with developer cooperation.

[08:50] Sabrina: "The newer constructions bring in like 8 to 12% returns. The process is straightforward: reserve the unit with a $2,000 deposit, sign the contract within 30 days, and arrange the remaining payments."

In contrast, resale transactions are more complex due to the lack of a centralized MLS system in Panama, making it imperative to engage reliable lawyers and real estate agents to navigate legalities and ensure clear titles.

[13:06] Sabrina: "The process itself is a lot different. The lawyer handles everything, so you have to hire a good lawyer and a good real estate agent as your safeguards."

Contract Differences

Unlike the standardized purchase agreements in the US and Canada, Panamanian contracts are individually drafted by lawyers, resulting in variations across transactions. This necessitates careful review and professional assistance to ensure favorable terms.

[24:16] Sabrina: "In Panama, lawyers draft the contracts, meaning the terms can be different depending on who writes it. It's not very structured."

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6. Rental Market and Investment Returns

The rental market in Panama presents varying opportunities. Sabrina notes that long-term rentals offer modest returns, especially for mid-range properties, while higher-end condos can command significantly higher monthly rents.

[26:29] Sabrina: "A mid-range condo might rent for $1,000 to $1,300 a month, whereas higher-end condos can fetch $2,000 to $3,000 monthly."

However, she cautions that landlords need to invest in quality furnishings to maximize rental income, as subpar properties do not perform well in the competitive rental market.

[27:27] Sabrina: "Some landlords furnish with subpar furniture, not realizing that investing a little more upfront can increase rental income by $500 more per month."

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7. Real Estate Practices Differences

Comparing Panama to other markets like Canada and Mexico, Sabrina highlights significant differences in real estate practices, particularly in how transactions are handled and the role of legal professionals.

[23:30] Sabrina: "The actual documents and process aren't that much different, but the contracts are not standardized and depend on the lawyer drafting them."

This lack of standardization necessitates a strong reliance on professional legal assistance to ensure secure and transparent transactions.

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8. Economy and Market Stability

Panama's economy remains robust and relatively unaffected by global inflation trends. Sabrina attributes this stability to the Panama Canal's significant revenue, which has historically insulated the country from economic volatility.

[33:26] Sabrina: "The economy is pretty stable. Inflation isn't out of control compared to much of the Western world."

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9. Cost of Living in Panama

The cost of living in Panama is highly affordable, especially when local shopping practices are adopted. Sabrina advises shopping at local markets to maximize savings, highlighting that expenses like groceries can be remarkably low.

[33:59] Sabrina: "Groceries are very affordable. For example, 10 pieces of tuna steak caught that morning cost around $20, and you can buy three weeks' worth of fruit for about $14."

This affordability extends to everyday living, making Panama an attractive destination for both residents and investors seeking lower living costs.

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10. Community and Cultural Insights

Sabrina emphasizes the pride Panamanians take in their country and their resilience against external narratives that might affect economic policies or real estate perceptions. This strong national identity contributes to a welcoming environment for foreign investors.

[16:08] Sabrina: "Panamanians are very prideful and value their country, not being swayed by external statements like those from Donald Trump."

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11. Conclusion and Contact Information

As the episode wraps up, Sabrina shares her contact information and social media handles, encouraging listeners interested in Panama real estate to reach out for personalized assistance.

[35:39] Sabrina: "You can follow me on social media as the Panama Girl, and feel free to email me for any real estate inquiries in Panama."

Host Dave assures that Sabrina’s contact details will be available in the show notes for listeners seeking to explore Panama’s real estate opportunities further.

[36:13] Dave: "We'll put all your contact info and links to your socials in the show notes if anybody wants to reach you."

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Key Takeaways:

• Diverse Market: Panama offers a wide range of property options catering to luxury buyers, retirees, investors, and digital nomads.
• Stable Pricing: The real estate market remains steady with modest post-pandemic growth, making it an attractive option for long-term investment.
• Investment Opportunities: High returns through pre-sale properties and strategic locations like Casco Viejo for Airbnb rentals.
• Legal Considerations: Importance of hiring reputable lawyers and real estate agents due to the non-standardized contract processes.
• Affordable Living: Significant cost savings available through local shopping and moderate rental prices, enhancing the overall investment appeal.

For listeners interested in expanding their real estate portfolios internationally, this episode provides a comprehensive overview of Panama’s promising market landscape, backed by expert insights and practical advice.

Transcript

[Dave]

Welcome back to Real Estate Without Borders. Today we're traveling to Panama. That song. I wanted to sing it. You know what I'm thinking? That Panama song. Anyway, we're joined here by Sabrina, who is an expert in helping people with real estate transactions in that market. Can you give us a quick rundown on who you are and what you do?

[Sabrina]

Yeah. Thanks for having me, guys. I'm very excited. I love talking about Panama. I love sharing what I know. So thank you. Yeah. I've been in real estate now for, like, five years. First I was in Ontario, and then I moved here about three years ago and started to just work with international buyers to help them explore Panama and move here. Open bank accounts, basically anything, like, related to offshore. So not just real estate. But yeah. And I'm loving it, and I just want to help more people and keep doing it.

[Fosh]

I love it. I. Thanks for. Thanks for coming on the show. Also, Fosh, can you sing that song or no? Are you. Yes.

[Dave]

You know what I'm saying?

[Fosh]

I do. Is that Van Halen?

[Dave]

Is it Van Halen? I don't know.

[Fosh]

I don't know.

[Sabrina]

Is that seriously what he said?

[Dave]

Dan Halen? Isn't it Panama? Yeah. Also Panama by Van Halen.

[Fosh]

Yeah, that's right.

[Sabrina]

I didn't realize he's actually saying Panama until right now, when you just sang it.

[Fosh]

Yeah, yeah. That should be in your Instagram bio, like, when people click in. You know where. MySpace, when you click on people's pages and it, like, had a song. Yours should be.

[Sabrina]

That would be perfect.

[Fosh]

I'll. I'll send a message to my Instagram people. But yeah, thanks. Thanks for coming. It's cool to have you on here because obviously you have ties to Canada. I think what you're doing, a lot of people are envious of, and it looks really cool, and I love that you're documenting your journey. And again, just, like, trying to. It's challenging, for sure, but it's true. Like, I get probably a similar feedback as to you as a lot of people are very curious as to what I'm doing. And same with you, you know? So, honestly, it means a lot that you made the time for. For us today.

[Sabrina]

Yeah. Thank you, guys. I'm very excited to dive in.

[Fosh]

I'm curious. Like, I think let's start it off with what's kind of happening in Panama, because I think this is something that's not covered a lot in, like, the general public, especially in our circles. Everybody's very curious about it, but no one really fully understands that's why we created this podcast, really honestly provide insights on what's happening other markets. Because at the end of the day, if you can understand other markets, you can also bring that. Bring that home as well. So.

[Sabrina]

Totally.

[Fosh]

I want to ask you a few questions. Like, obviously, what, what would walk me through what some average price points are in Panama. Okay. Like, and when I say Panama, that's, that's a country.

[Sabrina]

Yes.

[Fosh]

Let's get specific here because I'm not.

[Sabrina]

A big geography guy.

[Fosh]

Where are you located?

[Sabrina]

Yes.

[Dave]

This is part real estate podcast, part Dave Learns geography podcast.

[Fosh]

I have Google Maps open, so fire at me.

[Sabrina]

Oh, perfect. Perfect. Okay. Panama, you have like, obviously you have the city which is the hottest market. I would say right now you have homes that are ranging from, I would say around like. So there's definitely a big range. You have the luxury, the middle and of course like the lower, more affordable range. But it's anywhere from. For the higher ends, I would say it starts at like 2,000 to $3,500 per square meter.

[Fosh]

Per square meter.

[Sabrina]

So for our Canadian listeners, this is like $200 to $350 per square foot.

[Fosh]

Okay.

[Sabrina]

And those are, you know, in areas. So like more prime areas like Punta Pacifica, Costa del Este, those are known as more of like the higher end luxury areas.

[Fosh]

Within Panama City.

[Sabrina]

Yeah. So within Panama City. Yes. So think like closer to the water just to kind of paint a picture for you.

[Fosh]

Right?

[Sabrina]

Think like the Trump Tower. There was a Trump Towers there which is now called JW Marriott because they completely like just X nade Trump.

[Dave]

Yeah, Same thing happened in Toronto, right?

[Sabrina]

Huh, huh. So that's like more the higher end luxury areas, like closer to the. Closer to the. The water. So you have, you know, the beautiful view of the Pacific. So anywhere from like 2000 to $3500 per square meter. And then, then yeah, you do have the mid range. So like areas like San Francisco where you can find things for fifteen hundred dollars per square meter, there's a big, big range. Like you can find a condo here for 100 grand and you can find a condo here for 4 million. It really, really depends on what you're looking for.

[Fosh]

Is it? Sorry, go ahead.

[Sabrina]

No, no, Go, go, go.

[Fosh]

One thing I'm curious about, like, personally is, is how obviously I'm not going to get like the specific numbers, but I think a lot of these cities like Panama, in my opinion, where people maybe flock to during the pandemic. Have you seen, have you noticed a change, like a drastic change in price points or Even like, what's happening in the market from, let's say, the pandemic to today?

[Sabrina]

Yeah, there really hasn't been honestly much of a difference. Like, the market in Panama has been pretty flat historically, it's been pretty steady. There hasn't been a crazy amount of dips. Definitely. Now, like, the pandemic, of course, impacted everywhere and especially the lack of travel that was permitted. But now you can see that demand is definitely rising from foreign buyers. Price prices are slowly driving back up, but it's still pretty steady and it's still very affordable.

[Fosh]

Cool. Who, just off the top of my head, who's like our. What's your buyer profile? Like, is it. What country are they from? Like, what are they looking to do? Are they investors? Are they kind of like end users or maybe doing what you're doing? Both.

[Sabrina]

Yeah, there's a big mix. Like you have, you definitely have a lot of investors coming in who are purchasing more pre construction. And I mean, I'm sure we'll talk about the, like the short term market and everything, but they're purchasing pre construction because there's a lot more leniency with putting it on Airbnb and the returns are just much higher. And then you do have, you know, the, the retirees, there's tons of retirees who are looking, they want, they want something already done. And they're not really looking in the city, they're looking in areas like Boquete and areas like the beach areas, the mountain areas. But yeah, there's a big mix. Really? You have expats from all over the world, like, not just expats from North America, there's people from other areas of South America. There's people from. There's a big mix.

[Fosh]

Cool. You mentioned Airbnb. I'm sure it's in my question somewhere here, but I want to jump into it because I'm super curious. You mentioned that if they buy, if they buy pre sale, that there are no restrictions. Does that mean that there are restrictions on the resale side?

[Sabrina]

Yes, there are. Yeah. So there are. So there's regulations for Airbnb only in Panama City. The only, the only exception to this is. And I guess, Sorry, I shouldn't just say Airbnb. It's just short term rentals, so anything less than 45 days. The only exception to this is an area called Casco Viejo, which is the historic area. So this, there's no restrictions here. You can Airbnb, you know, your house, your condo, whatever. However, where it gets a bit more strict is with older buildings. So basically the building has to be zoned for tourism. So a lot of these older buildings, they're not zoned for tourism. So they're legally. They're not allowed to be on Airbnb. Yes, of course, like, you're going to see there's loopholes. Some operate under the radar, but they're not legally supposed to.

[Fosh]

Right.

[Sabrina]

However, the newer developments, like take that one, for example, the second one that is there. That is a newer building that. Yeah, that. So that's not in the historic district, but it's a newer building that has. The developer went through the proper process to get basically the license for the building to be permitted to be used for Airbnb.

[Dave]

Cool. Okay.

[Sabrina]

Yeah, yeah.

[Dave]

It feels like a purpose built Airbnb. Like, even just like with the way the pool's designed with the view and even the room size and stuff like that. Like, exactly.

[Sabrina]

That's exactly what the developments are doing. Like, they're smaller. They're much smaller. And they are really designed just for expats and for tourists.

[Dave]

Is that a viable investment? Is that something that you see a lot of capital coming from the US And Canada, buying and success? Like, what would my return be if I bought that? You know, and, and, you know, so I'm going to buy it. Am I going to buy it cash? Or do I put a, do I put a. Do I get a mortgage? Like, walk me through that process.

[Sabrina]

Yeah, the. Seriously, the, the newer constructions, they're bringing in like 8 to 12% returns. Like, they're. The numbers are pretty, actually pretty shocking. Like, some of the ones that are already complete, they are. So Panama City, it doesn't really get impacted by the seasons. There's always people coming here. There's always tourists coming here. There's always like multinational companies kind of setting up shop here. So they're sending their employees and those employees need somewhere to live. It doesn't really matter the time of year. Like, I saw a Airbnb report from last year during the rainy season. So like July, June, July, August, September, and this one unit was grossing like $2,500 US a month, 90% occupancy. Like during the thick of the rainy season, which is, you know, known as the lower season. Yeah. And the process is, it's pretty straightforward. Like, you see something that you like, you basically reserve the units. You pay like 2000 usually to just reserve the unit and then you have. Yes, yes. So all the. Yeah, all numbers I'm going to talk about are all in USD, but, yeah, you pay 2,000 to reserve the unit, then you have 30 days to actually sign the contract. Once you sign the contract is when you have to pay 10% of the purchase price, like less the amount you already paid to reserve it. And then for foreigners, like the total down payment is 30% and then you can finance the remaining 70% or you can, you know, pay in cash or, or whatever.

[Fosh]

What's the. So for the 30 days, I'm guessing that's like their due diligence period, right?

[Sabrina]

Pretty much, yeah. And it's kind of like it's up to. It's also your sort of like decision making process, I guess. It's like if you're 100 sure that you want to. Because as soon as you sign the contract, obviously you're. You sign the contract and you're, you.

[Fosh]

Know, like legally bound.

[Sabrina]

Legally bound to start paying the actual cost of the unit. But you can find like these. Sorry, go on. No, it's going to say that.

[Fosh]

No, now you go. That's the Mexican Internet.

[Sabrina]

Okay, okay, okay. The. These, like newer developments, like you can find something small, like let's say even like a studio, which is tiny but might be good for just an investor for like $120,000.

[Fosh]

Cool. Yeah, it's a similar process. You review contracts and then once you review the contract, you sign the contract, then you have to put your down payment. What is on the topic of pre sale, since we're on it? What's. Yeah, what's like the payment structure for. For a pre sale versus buying something in like exactly. What did the Australian guy call it? Fosh Not Resale. He had the most hilarious name anyways. Secondhand. Secondhand Homes. That's what he said. He's. I do a lot of secondhand homes. All right. He's the best. He's the funniest dude, honestly. I'll send you stuff after. He's hilarious.

[Dave]

It was funny.

[Fosh]

So.

[Dave]

So for secondhand.

[Fosh]

Is there a difference between second hand, secondhand process of presale versus something that's already existing?

[Sabrina]

That's hilar. What's that? That's hilarious. Yeah, sort of. So with the presale, obviously you have more time to pay the down payment. So if basically after you pay the. After you sign the contract and you pay the 10, the first 10%, from the moment you sign the contract up until you get delivered the keys, you can kind of like structure a payment plan with a developer to pay the remainder of the down payment so you have more time. And like, if something's Going to be done in 2028. You have three years to actually finish paying that 30% down payment. And most developers like will work with you to figure out out some sort of payment plan that works like whether it's every month, every two months or whatever that you have to pay that remaining 70% either financing or in cash and then for resale. For resale, it's obviously it's a bit different. It's resell is kind of like a bit of a shit show in Panama.

[Dave]

Sounds like Mexico too. Like Dave's described Mexico like kind of that way. Is there like no like MLS and stuff like that? Like I, I'm sure you saw I pulled up like realtor.com had some listings. But like.

[Sabrina]

Yeah, no, yeah, that's, that's. Yes, that is a challenge. There's not like you'll Google it and there is technically a centralized MLS system, but nobody uses it. It's not where you're going to find anything. So nobody actually regulates it. It's like why do you even have this? Yeah, but yeah, resale, it's like most sellers like they want, obviously they want you to pay in cash and it's, it's a much longer process like the, from the moment you find something. And it's also the process itself is a lot different than what we're used to in US and in Canada. Like there's. The lawyer basically handles everything. You know, there's no like third party title company who's going to protect you to make sure the property has titles and no liens or anything like that. So it's the lawyer. So you have to make sure you hire a good lawyer, hire a good real estate agent because those they're your only safeguards.

[Fosh]

And it's a bit different because we, it's kind of similar but we have notaries, we use notaries to close and the notaries do have title insurance and everything like that. So.

[Sabrina]

Yeah, so same, same idea. Yeah, the lawyer, like the, the lawyer has to, has to be a notary as well. I forget the right term. It's like not all, not all lawyers are notaries, but all notaries are lawyers or something like that. I don't know, I might be saying it wrong.

[Dave]

No, no, I think all lawyers would be a notary. I think all lawyers can notarize stuff, but you can also get a separate notary license where you can just notarize but you can't do like lawyer work.

[Sabrina]

Right, right.

[Dave]

Yeah, yeah. It's interesting. Like another, another kind of like headwind that I've just observed in trying to click around and learn as much as I can about Panama on this call. And, like, some of the stuff that I've been screen sharing is there's like, no data, like, I air DNA to air DNA, like, doesn't even cover Panama City. That's like what I used to analyze, like, Airbnb investments and then. And yeah, so, I mean, like, that. That alone is. Is just a fascinating. Like, you're. You're almost like flying blind. I guess that's where you really need like, the help of a, like a professional like yourself who actually, like, gets the market and knows these, like, data points. Right.

[Sabrina]

Yeah. And I will say, like, the reason why this is, is strongly because, like, Panama has never. They've never really relied on anything from foreigners to sustain their economy. Like, they've never relied on tourism, they've never relied on foreign investment because of all the money they make from the canal. So they're just very behind on all of this. Yeah. So there's not a lot of data out there. It's true.

[Dave]

Interesting. I'm maybe because you mentioned the Panama Canal and like, I mean, I think Donald Trump seems to think that they do rely on. On them for protection and stuff. What seems to be the sentimen around that in. In Panama right now, like, with some of the changes that are being proposed. I mean, I guess he's proposing changes for everywhere, everyone in the world right now, but it sounds a bit. But like, what's going on with that? Can you give me 30,000ft? What's like.

[Sabrina]

Like there hasn't really been. So Panamanians are very prideful people who. They very much value their country and they have a lot of pride for their country, and they don't really seem to be caring, to be honest with you. About what? About what Trump says. There's not been any, like, protests, like, there, there's. There would be protests if there was seriously a chance that something like this could happen. But yeah, like, it doesn't really seem to be affecting anybody here. People are actually kind of laughing about the whole thing.

[Dave]

Right. Yeah, I mean, I guess that they're like, you know, the idea would be it really is just like, who ends up having sort of like, corporate or like, economic control over the Panama Canal, which, like, I don't even know if it. If it is so much in the hands of China, as is being implied there. But so I guess it, like you said, like, it probably wouldn't really change the outcome. Like, they're still going to be. It still exists within their country, and they, you know, it's not like it's going to really have a major impact on. On them other than like, maybe just more and more people hearing the name. Like, it's kind of. Kind of like us with Canada, too. Right? It's like. Oh, people.

[Sabrina]

Exactly.

[Dave]

A lot of. Yeah, yeah.

[Sabrina]

The one thing is that's true. It's like Panama hasn't got this much attention since, like, they built the can. Like, they're very under the radar. But now when the boat was stuck.

[Dave]

I feel like there was some. There was some attention, too. Remember when the boat was stuck?

[Sabrina]

Yeah.

[Dave]

Was that last year?

[Sabrina]

Because. I think it was because of the. Well, last year's rainy season was, like, very, very dry, and there was actually a. Like, a drought in the canal, and they could only allow, like, one boat at a time. And it definitely affected the amount of how busy the canal was last year. So that's probably.

[Dave]

Oh, yeah, it says 2023. A major traffic jam occurred at the Panama Canal due to a severe drought, resulting in over 200 ships being St. And facing delays with some vessels. Yeah, so I was thinking of the other one where the boat got stuck sideways in. But that was actually the Suez Canal, which is a different canal. So it shows how little I know about this.

[Sabrina]

Yeah, but this was, like, big news because, like, you look outside to the Pacific, like, where the entrance of the canal is, because you can see it from a lot of areas in the city, and there was just like, hundreds of massive ships just waiting for their turn to go through the canal.

[Dave]

Like a. Like a yacht week in Mykonos. But for. But for. Okay, cool.

[Sabrina]

Yeah. Like, I wonder what.

[Dave]

They're gonna send some sugar babies out on those. On those ships.

[Sabrina]

That's right.

[Fosh]

Book a flight.

[Dave]

Okay. Fascinating. Okay, cool. So what do. What do people need to know? Like, actually before. Before I, like, jump in, maybe more specific on the transaction, but, like. Like, who's buying the most of this stuff? Is it. Is it Americans? Is it Canadians? Is it, like. Is it European capital? Like, where. Where's the most, like, the biggest source of foreign investment that you're seeing going into Panama right now?

[Fosh]

And I want to add to that. Sorry. Is there. Are there restrictions on the foreign buyers? Like, any sort of restrictions? So who's buying? And are there restrictions?

[Sabrina]

Yeah, like, everybody is buying. There's. There's people From Canada, the U.S. i would say that's the highest amount of people buying right now is people from Canada and the States. There are people from Europe who are coming. And there are people from like, Colombia and other areas of South America who want to get out of a more unstable country and come to Panama. And it's like I said earlier, it's a big mix. Like, you have investors, but you also have families who kind of want to relocate here. And then you have retirees or you have digital nomads, entrepreneurs who want to incorporate here and use that towards getting their residency and come here. So there's a big. Yeah, big mix.

[Dave]

Is there tax incentives? Like when you said there are tax incentives for somebody to move? Because, I mean, you always hear about, like, the Panama Papers, right? Like, all those politicians, like, using Panama to like, you know, launder money and stuff. So, like, I'm assuming there has to be some sort of, like, tax incentive. I think a lot of people go there for tax residency as well, right?

[Sabrina]

They do, yeah. So it's territorial. So any money that you make outside of Panama that comes into Panama, you don't pay any taxes. It's only when you start making money, like, you know, if you're making money in Panama that you're taxed and it's pretty low. I think it's like 18 is the max. But yeah, that it's a huge incentive because, like, if somebody has an online business, for example, it doesn't really matter where they're, like, headquartered. It's so easy to just incorporate here and open a bank account here and just, you know, move your money legally to so another country.

[Fosh]

So they. Okay, so it's like a free zones, right? So if they. I guess if, if, yeah, money's coming in from outside of Panama, then there's no tax on that, Correct?

[Sabrina]

Yeah.

[Fosh]

Crazy. That actually makes. All right, I guess I'm off to Panama next. Then it's just. Just Googling how to get.

[Dave]

Running around until eventually somebody makes him pay tax.

[Fosh]

The CRA is watching this episode for me.

[Dave]

So. Okay, so this is, this is cool. Is there. Did the. The local residents seem to be receptive to, like, foreign capital coming into buying? I mean, I know like, in Canada when we had like record population growth, people weren't stoked about it. I mean, I think 2016, 2017, there was like a little bit of reluctance. Then we. Then we did the foreign buyer bans and taxes and stuff. Like, and, you know, some countries, Portugal, Spain as an example, housing affordability got really bad. Like, is there any inkling that, that something like that could take place?

[Sabrina]

I don't think so. Like, of course, who knows? And yeah, that's Kind of what happens, like, more people who are investing, more foreigners who are investing. It's likely to drive up the prices. But based on, like, what we're seeing, like, historically, that hasn't really been the case. And I just think now, Panama has always had people come to it from all over the world. It's just now it's getting on people's radar. It's now we're hearing about it, but it's always been happening the last, like, 10 years. And still, it's been pretty, like, relatively affordable still. And. And the market's been pretty steady, so we'll see.

[Dave]

I feel like it's. I feel like it's unique in, like, south and Central or so Central America or Latin America, where it's got, like, a really big metropolitan, like, almost Americanized city a little bit, where it feels like, you know, like. Like a Miami maybe. That's wrong. I've never been to.

[Sabrina]

No, that's, like, how I describe it. Yeah, yeah.

[Dave]

Hopefully, like, less like. Like, douche culture and, like, share Lambo sharing stuff like that.

[Sabrina]

But, yeah, no, that's lots of rent.

[Dave]

No Miami was without douchebags. Sounds, like, amazing. Like, that's, like, so, so awesome.

[Fosh]

Great weather. Yeah. No tax.

[Dave]

That's a big sales pitch right there.

[Fosh]

No.

[Dave]

Crypto grows.

[Sabrina]

Yeah, yeah, yeah. This crypto is starting to come up here.

[Fosh]

I'm curious. I kind of want to, like, dive into just, like, how, like, the. The real estate practices are different, you know, like, how you actually transact in Panama versus Canada and the US Because I feel like maybe it's a bit different. So, like, are there any, like, what are the key differences in how properties are structured? You know, like, are there anything that. Because since you've transacted in both countries, is there anything that stands out to you that's kind of interesting? Yeah.

[Sabrina]

Yeah. Like, it's definitely different, but I would say, like, overall, like, the actual documents and the process isn't that much different. I would say, like, the big. The big difference is. So, you know, in the US And Canada, you have. Obviously, you have the buyer sign, like, a standardized, like, agreement of purchase and sale that is issued by the real estate association. But, like, that's not really how it is done in Panama. Like, in Panama, it's basically the lawyers. Like, lawyers draft the contracts, meaning that the terms can be different. Like, they're not. There's not one document that is always the same, and you're just filling the blanks. The terms are always going to be different because it's you might have a different lawyer writing it up. So it's a bit of a, it's not very structured I guess you would say.

[Fosh]

It's the same here actually.

[Sabrina]

Like. Yeah, no, go on, go on. Sorry.

[Fosh]

No, no, it's same, same thing here in Mexico. It kind of depends on like which developer you're buying from and then like you said, which, which notary is. It's like I could sell three units in the same building and depending on who their individual lawyer is, the contract would be like a little bit different. It's crazy.

[Sabrina]

Exactly, exactly. Yeah.

[Fosh]

Are there. But I guess are most of like okay, so are most of the sales for like what you're seeing, are most of the transactions pre sale or like resale like existing structures? What, what's more common? What are more of these foreign buyers looking at right now?

[Sabrina]

Now the foreign buyers are more looking at pre sale because there's a lot more, it's, it's much more attractive for an investor especially because like you buy something and you don't even have to really worry about it. Like they have property managers, they have people taking care of the property and it's attractive for people who aren't planning on coming here at all. However, like yeah, these newer developments, they are a lot smaller, especially in Panama City. So somebody who wants to live here, they're going to probably look more towards resale and maybe tap into like the long term rentals instead of short term.

[Dave]

Is there a price bed spread between your pre con and resale like compared to like similar, you know in Toronto like Precon's like what, 20 plus on, on resale? What, what is the spread there like for a pre construction?

[Sabrina]

Yeah, I would say, I would say it's higher. It's definitely higher. It's still, it still ends up being pretty affordable but for like a small, let's say like 45 square meter pre sale condo, you can buy that for like a hundred and sixty thousand dollars. Whereas if you were buying a resale you could buy like a much bigger condo in a, probably around the same.

[Fosh]

Area for like a similar price point.

[Sabrina]

Yeah, like something more, with more space. Might even have you know, two bedrooms and anywhere from like, like more like 90 square meters. Whereas a pre sale is a lot smaller.

[Fosh]

What's like the, what are the rent? What's the rental market like? Like I know you mentioned Airbnb has a bit of restrictions on, on, on certain investments. What do are, are any of your clients, are you seeing anything where it's like the, the investors are Looking to, to buy and then get, get their property into like the long term rental game. Is that something that's kind of out the door?

[Sabrina]

Yeah, yeah. So this really depends. Like if you're buying like a mid range condo, say for like $180,000, you might only be able to rent that out for like a thousand to thirteen hundred dollars a month.

[Fosh]

Okay.

[Sabrina]

So it's not amazing. Like the long term rentals is actually, it's very affordable for somebody like me say coming from Canada where the rental market is crazy. But for an, for a landlord it might not be that attractive. But then you do have like the higher end condos where are a higher price point to buy like two, let's say 250 to 300.

[Fosh]

Got it.

[Sabrina]

Those you can rent out for like 2,000 to $3,000 a month. So there's a big mix. Like some condos are furnished, some are unfurnished. Some landlords like furnish it with the most disgusting furniture that like, of course nobody's going to want to pay a lot for this. They don't have that like realization that if you just invested a little bit more up front to make the place look nicer, if you're furnishing it, you're gonna be able to get like 500 more per month.

[Fosh]

Yeah, that's. Honestly, I say this a lot. I've actually, I'm actually pretty vocal about it like on my social media. Because it's funny when, when you're investing in, in you know, like the US or Canada, it seems like people are more analytical with their investments. And then when they come to like Panama, Mexico, it seems that a lot of people buy based off of price alone, which is crazy. And then. Yeah, I just did a video of this. It's like you buy the, the lowest price point property because that's all you're looking at is price. And then you put zero effort into it. You put zero staging, zero photos. And it's like, yeah, you can't, you can't put subpar photos, subpar furniture and subpar everything and then expect excellent results. You know, it's exactly, it's similar to investing anywhere in the world. And when you're getting into Airbnb, like you're getting into hospitality, you know, and.

[Sabrina]

Yeah, exactly.

[Fosh]

You can't expect some subpar condo to, with subpar furniture to, you know, perform with excellent results.

[Sabrina]

Yeah, so exactly.

[Fosh]

I'm sure, I'm sure you see the same thing.

[Sabrina]

It's so true.

[Fosh]

I have a question about like the, the. Because like In Mexico, for example, we don't really dig. We don't build down. There's no like underground parking. It's, it's, it's actually crazy. In Mexico there's a lot of stone, so the soil is very thin and then it's like stone.

[Sabrina]

Okay.

[Fosh]

So they don't really build down. Yeah, it's crazy. So our build time here is very quick. Like a, a 40, a 40 unit condo complex would take realistically like the longest two years, maybe a year and a half. What's build time for? Because I think. And also our height restriction in Tulum specifically is five stories. So for Panama.

[Sabrina]

Oh really?

[Fosh]

Yeah. I see. It's a bigger city. So like.

[Sabrina]

Yeah.

[Fosh]

What's, what's build time for you and like what's that kind of look?

[Sabrina]

Yeah, yeah. Build time is fast too. So like, like what you said, we don't have underground parking. Like so all units that you see, the parking is always, always going to be like from floor zero to six or seven.

[Fosh]

Oh, cool.

[Sabrina]

So it's quick. It's quick too. It's like I've seen buildings go up in like a year. Like massive, massive, like 30 tower, 30 story buildings. So it's like one to two years, I would say.

[Fosh]

Okay. And that's kind of the same thing with that pre construction. So pre construction you put down, I think you said 10 was the minimum down.

[Sabrina]

Yes, 10%. When you sign the contract, the total for a foreigner is 30 down payment. But you have kind of, you can structure that from the, when you sign the contract to when you get to deliver the keys.

[Fosh]

Okay, so what's like, what's the most common, what's the most common payment structure for a priest? Like give me like I want to buy a condo that's 150,000. What would like my payment structure that would be favorable to me or an investor look like.

[Sabrina]

Yeah. Okay, so you do, you don't need.

[Fosh]

To give me real number. I caught you off guard.

[Sabrina]

Do I have to give you.

[Fosh]

No, no, no, no, no, no.

[Sabrina]

Okay. Okay. It would be like, it would be every like quarter I would say they would want you to, to make a payment.

[Fosh]

Okay.

[Sabrina]

Towards that down payment.

[Fosh]

Got it.

[Sabrina]

So like I said, like they'll work with you. Like you can, you can structure really like whatever type of plan you want. They will, they'll, most developers will work with you to make sure it's something that works for you and for them.

[Fosh]

Cool. Interesting.

[Sabrina]

But it's usually like by this date. Typically like every quarter by this quarter. We want this. This much by this quarter. And it's usually depending on the value of the property, obviously less than the 10 you already paid. It's whatever.

[Fosh]

Do you. When you guys, like, is it common there to have listing agents? Like, do you guys have. Is it common to have two agents in a transaction if the client were to purchase an existing property? Is it like Canada?

[Sabrina]

Yes, but there are no. Like, there's. You sign a. You sign a contract with that agent and like, they are selling your home. It's like, that's not how it works here. Like, they might have. A seller might have like five people listing their house, and it's like you're fighting like dogs and. Yeah, it's. It's not that structured.

[Fosh]

It's the same in Mexico. Like, it's actually. Because there is no MLS here, when people contact me to. To do resale, it is challenging. And the best route for them to go is to contact multiple agents, which is like, so counterintuitive, you know, because usually it's. Yeah, no, I'm not doing this. Let you sign. But it's the same in Mexico.

[Sabrina]

Yeah, yeah. It's one of those things. It's like, you know, if you, like, you. If you send, like you send an email out to your database and somebody wants it and then they take it. And it's not like it doesn't take you a lot of effort, you know, like, you're the difference between the amount of effort when you're trying to sell a listing that's yours. Like in Toronto, it's your listing, it's your responsibility to sell it versus kind of, you know, elsewhere. It's like, if it sells, it sells.

[Fosh]

Understood.

[Dave]

Before we finish up, have. Has there been like, much growth in like, price in Panama? Like, how, like, what's happened. I know. You know, like, Dave kind of started by asking about people moving there during COVID and stuff like that. Was there much impact that happened on price or rents as a result of that?

[Sabrina]

Not price. Not really. Like, there was a bit of a dip during like 2021, 2022, during, like right in the middle of the pandemic. But it's been pretty. It's been pretty steady. Like, it hasn't resale. Price hasn't really changed the rent, though. The rent has. I experienced this like, firsthand. The difference between when I came to Panama in 2023 and rented a place, like, versus now, that same place probably has gone up like 10, 15%. Just the rental price. So. Yeah. Yeah.

[Dave]

Interesting.

[Sabrina]

Yeah.

[Dave]

Sales look like their 242024 was like a record year since 2008 as well. Like you were saying, like, there's tons of people buying there. 10,000.

[Sabrina]

There's tons of people coming in. Yeah, it's. It's really wild. It's really wild to see, honestly.

[Dave]

Yeah. Interesting. Very interesting. It seems like the economy is pretty stable too. Like, inflation's not necessarily out of control compared to, you know, like, a lot of the Western world. World. Cool. Any other questions or.

[Fosh]

Yeah, what's. What's the cost of living there? You know, like, let's. I mean, I know it's obviously cheaper than Canada. Well, like, yeah, but give me, like, some examples of, like, what a groceries cost. All that kind. What is, what is the cost of living?

[Sabrina]

Yeah, it's pretty. Pretty affordable. It's. It's actually, it's very easy to spend a lot of money in Panama City. Like, you have to be mindful of where you shop. Like, I talked about this on my, like, tick tock. I think, because some people will say to me, Panama is really expensive. It's like, well, where are you shopping? Like, like, go to the local market. You're gonna get. You know, I also said this because I can't believe it. Like, I got 10 pieces of tuna steak. The tuna was caught that morning for, like $20. So if you shop where the local shop, you're gonna save a lot of money. You're gonna see your money stretch, like, much further. But yeah, groceries, like, you could get. Grow. You could get fruit for like three weeks for, like 14 U.S. wow.

[Fosh]

It's the same in Mexico, I think people make that mistake. They go to, like, the most commercialized place and then they say, super expensive.

[Sabrina]

It's like, nah, exactly. It's like, well, like, no, you have to go where the locals shop. Like, you don't. Like, they're. The locals aren't going to these big box stores. Like, they're going to the local markets. They're going, you know, to Jose's, like, fruit stand. Like, they're not going to the big stores.

[Fosh]

Yeah, I get it. Awesome. Yeah, yeah, we appreciate you, honestly. Thanks so much for coming on. More questions.

[Dave]

No, yeah, if.

[Fosh]

Just.

[Dave]

If anybody wants to. To reach you. Where would you recommend that they do that? Here's this. And wants to buy a property in Panama and Airbnb it. Like, yeah, give you a shout.

[Sabrina]

Yeah, you can. I mean, my email is just my first name. Make sure you put two N's. I get that mistake a lot. Like, I emailed you, but you spelled my name wrong.

[Dave]

Just gotta get the other one as a forwarding address and then forward it to your email.

[Sabrina]

Yeah, you know what? Why haven't I thought of that?

[Dave]

It's a good idea.

[Sabrina]

That's a really good idea. I'm gonna do that.

[Dave]

Done. I won't charge you.

[Sabrina]

Yeah, that's my email. And then I'm on. I'm on social media too, as at the Panama girl, so you can follow me there. I'm trying to be as active as I can. Getting some inspiration from you, Dave, out in Mexico.

[Fosh]

Thank you.

[Dave]

The Mexico boy.

[Fosh]

Yeah, I'm going to change mine to a Mexico guy. Amazing.

[Dave]

Unreal. Cool. Yeah. Well, really appreciate your time.

[Sabrina]

Thank you so much.

[Dave]

We'll put all your contact info and links to your socials in the. In the show notes if anybody wants to reach you. Really appreciate your time and can't wait to chat again on what's going on in Panama and how many deals you've done with people from the show in.

[Sabrina]

A couple of months. Yes, we'll have to talk about this for sure.

[Dave]

For sure. Thanks.

[Sabrina]

Thank you.