This question come up quite a bit. I’m am no expert on anything but I thought I’d share a few thoughts.
The advice that you will hear from everyone who isn’t trying to sell you something – live in your intended location for at least six months, preferably over a year before you even think of buying something. You need a test run of living here beyond the honeymoon phase. You need to be sure you like the country, the culture, the people, and the pace of life. You need to be sure you like the climate in both the rainy and dry season. Most important, you can make friends and connections. Through them you can learn more about the area, learn what is a fair price for a property, and probably find likely places to rent or buy. There is no MLS here. This country runs on relationships. Your local friends can help you a lot.
OK, you have been here a while and it’s time for some decisions. Renting vs buying is an individual decision based on many factors.
We are happy renters.
- At this stage of our lives we don’t want the responsibility of caring for and maintaining a house. We are happy to address little things but if the septic overflows or the fuse box blows up, the landlord is responsible.
- Our money is in the bank, not in a house. We don’t have a hefty bank account or income, so we feel better having quick access to our money if something unexpected would happen.
- If we change our minds or circumstances, it’s very easy to leave. We have no mortgage or equity to lose.
- If something happens to both of us, our kids would be responsible for wrapping up loose ends. In our case the neighbors could have the contents of the house and the keys would be returned to our rental agent. There would be nothing more significant than a used car left behind.
We also know some happy home owners
- A house can be a good investment and you can built up equity. You lock in your price and no one can raise the rent or ask you to leave.
- I have heard some people say they prefer investing in a Panama property rather than than leaving that money in the US.
- You can do whatever you wish to the house – remodel, build, make changes however you like and they are yours to enjoy, and they hopefully add to the value to the house.
- You have real roots in the community and the locals will see that you have made the commitment to live here.
But, there are some downsides to both options.
As a renter, the landlord can ask you to leave or raise the rent. You don’t know what you will be paying next year or in 10 years. I have heard about landlords who can be difficult to work with, who don’t want to fulfill their responsibilities, or who cause other problems. Even if allowed, you don’t want to make many improvements to someone else’s property.
As a home owner you will need to sell the house at some point (or your heirs will). Sometimes houses take a long time to sell. Certain styles, locations, ages, and price ranges can really limit your pool of potential buyers. If circumstances cause you to leave Panama, it is difficult to manage, sell, or rent a property from a distance. Renting doesn’t always work out either if you can’t get a tenant, or you get a bad tenant who damages your home or leaves unpaid bills.
I have been talking with quite a few people lately who are thinking about moving to Panama. Hopefully these thoughts will be helpful. A mistake can be financially and emotionally costly. I’d much rather see everyone happy with the decisions they have made, and happy with their new lives in Panama.