Real Estate Short Term Investment Strategy
Strategically situated in the heart of the Americas, Panama is of major worldwide importance. In the light of recent performance and strong economic indications for the future, worldwide investors are continuing to put billions of dollars into this country. Its outstanding economic growth is often likened to the outlandish success of Dubai.
For a decade, Panama has been offering investors many of the same features it does today: a low cost of living and high quality of life, together with a solid and growing economy to make it a high-demand real estate location. This success can partly be attributed to the huge volumes of trade passing through the Panama Canal. With the Canal now being widened, future prospects remain ever bright for Panama’s economy.
An expected growth of aviation sector in Panama is on the move, and more contributions to the economy by companies linked to this sector are expected too. Only in 2025 is anticipated to transit a total of 14 million passengers through the Tocumen International Airport, this would be an increase of 180% if one takes into account the end of 2010 it was 5.1 million.
With the Panamanian government ranking tourism as a priority sector, the tourism industry is projected to continue climbing for the foreseeable future. Airport expansion at Tocumen is set to bring millions of dollars’ worth of improvements to the airport, increasing passenger and aircraft handling facilities to cope with ongoing growth. Short term investors regard such tourist industry factors as strong incentives to investment in Panama’s buy-to-let market.
Many exciting off-plan projects are now underway and investors are keen to snap up units while prices are a good deal lower than on completed projects. This allows power for “flip” investments in which short term capital investors sell on their units prior to project completion. In this way they take advantage of capital appreciation over the construction period, which is expected to be quite considerable (approx. 20% per annum), particularly in current hotspot locations.
Investors are normally free to re-assign contracts, but prior notification may need to be made to the developer (often around 30 days in advance). It is important to check out the procedure for re-assignment of contract with the developer prior to making a reservation. Sometimes a percentage-related fee is charged in order to do so.