The second in a series of articles published in response to reader inquiries, for those who are contemplating,  exploring,  or making “the big move” to Panama. The earlier article can be found at: http://newsroompanama.com/news/panama/getting-permane,nt-residency-in-panama

When you make a big move, it can be stressful, especially when relocating to another country like Panama. There are so many variables at play: Where will you live? What will your quality of life be like? How much is the cost of living? One of the biggest decisions, if not the most important, is finding a home. 

In Panama, much like anywhere else, there are a variety of choices. Everything from luxury condos downtown, to beach houses, to a simple mountain cottage are available in this small but diverse country. But before you take the plunge with real estate, you need to make some key decisions; one of the biggest ones is, should I buy, or should I rent?

RENTING
For many people, renting is either a short-term option, or a financial one, depending on what your living situation requires. When moving to Panama, especially if you have no previous experience with the country, renting may be your best option. Here’s why. Living in Panama may not be for everyone, and more so, it may take you some time to figure out where your right fit is, as far as location, housing type, and price. 

Many expats find that short-term leases give them the opportunity to feel out the country a little bit. Rents in Panama run the scale from high to low, however they’re generally much lower when compared to equitably-sized places in the US and Canada. In Panama City there are month-to-month leases available for corporate stays and extended vacations, however they tend to charge a premium. If you want to rent short-term your best bet is to sign a one-year lease. This typically involves nothing more than a financial reference, and security deposit of one month. So, even if you don’t stay a full year, your financial loss won’t be that big, should you need to break the lease terms.

BUYING
Buying a house/apt., in ANY country, is a big commitment. And as we mentioned before, there are plenty of options for different budgets, and tastes. For starters, you need to know what you’re going to use the property for. The real estate market in Panama is hot right now; so buying a house/apt purely for investment purposes is a popular choice. In most cases, you can rent your property for roughly 7-8% of what you bought it for, which is a good margin if you’ve got the time and money.

If you’re looking to buy for yourself, and to settle in, there are some important things to remember. Property values in Panama are rising, and because of this, many will try to take advantage of the market. In order to make sure you get a fair deal, you need a skilled local attorney and real estate agent, as well as doing some due diligence on the type of property you’re going to buy, and the area that it’s in. It’s also wise to pick a realtor with experience in international relocation services, as well as local know-how, and a good grasp of the language (Spanish) and local markets.

Breaking Down the Numbers
When planning a long-term strategy, buying is more than likely the better financial option. However, in certain cases, you may actually get a better deal by renting. The equation isn’t simple, but luckily the New York Times has created an interactive scale by which to judge how much (or little) you should be paying for rent, in order to make it worth your while not to buy. For argument’s sake, let’s say a 2-3 bedroom apartment in downtown Panama costs you $250,000 to buy. In order to get the same long-term value as a renter, for an average stay of around 10 years, your rent should be around $1,000 US per month. Is it possible in Panama? Yes. But it’s not likely. Check out the Times’ interactive app to find out more. 

For more info on buying Panama real estate or renting a home in Panama, check out Panama Offhsore Legal Services’s website: http://www.panama-offshore-services.com. There is a specia arrangement for members of the CanadaPLUS CLub (clubcanadaplus@gmail.com)