You’ve saved 200K USD and now are trying to figure out where to invest the funds. Leaving the funds in a savings account may seem like the best thing to do, however banks today are paying little to zero interest on your savings. In fact, some banks have begun CHARGING THE CLIENT INTEREST to hold their money. You have worked hard to save your money, now it is time to let the money do the heavy lifting for you.

 
This article will help you understand how to put your money to work giving you the best return on your investment in the safest way possible.

200k USD may seem like a lot of money, however that money can be spent frivolously and quickly in no time. The goal is to get the funds invested and out of reach so they are not wasted. Panama has a growing real estate market where you can safely invest your money and receive healthy return on your investment.

Of all the sectors of the Panamanian economy, real estate is one of the most promising. With all of the people pouring into Panama whether on multi-year employment contracts, immigrating from their countries out of necessity, or just attracted to Panama’s high quality of life, real estate is booming.

 

Suggested Article: Tips When Purchasing your First Investment Property

 

Local and foreign investors understand the importance of investing in this sector of the economy because although the investment may be high, the equity will be much higher than the amount initially invested over time.

 
According to Investopedia, Real Estate ROI can vary depending on which method you use to calculate, also: “Calculating ROI on real estate can be simple or complex, depending on all the variables mentioned above. In a robust economy, real estate investments, both residential and commercial, have proven to be very profitable. Even in a recessionary economy, when prices fall, and cash is scarce, many bargains in real estate are available for investors with the money to invest. When the economy recovers, as it invariably does, many investors will reap a handsome profit.”

 

Reasons why to invest in real estate in Panama

According to the World Bank, during the last 10 years, Panama has been one of the fastest growing economies in the world. The annual growth was 7.2% between 2001 and 2013, more than twice the average for the region, growing by 6.1% in 2014 with a slight decrease of 5.8% and 4.8% in 2015 and 2016 respectively. For 2017 and 2018 it is forecast to remain at 5.4%, the highest in Latin America.

 
There are many good reasons to expect that Panama’s growth will remain among the highest in the world, such as:

  • Continued investment in infrastructure such as the second and third lines of the subway, new roads and water treatment facilities.
  • The real estate market in Panama is characterized by producing large capital flows in rent and increases in the price of real estate over time.
  • The official currency of Panama is the Balboa; However, the US dollar is the actual currency in circulation and is used by all people in the country.
  • Panama has been cataloged in 2016 as one of the best destinations to retire in the world.
  • High demand for rental properties. More than 10 multinational companies per year are moving their headquarters for Latin America to Panama bringing along with them highly skilled workers and executives from abroad. All of these employees need a place to rent while they are living in Panama.
  • Panama promotes foreign investment in the country. One example is the new free trade agreement with China bringing in thousands of people per year to live and work in Panama.

 

Investing your 200k in Panama should start making more sense now…

Starting at 200k, you are able to buy a beautiful new apartment in Panama City in some of the most sought-after neighborhoods including San Francisco, Bella Vista, Punta Paitilla, Balboa, Avenue, and Marbella. You are able to purchase an apartment for 200k without financing, or use the 200k as a down payment to purchase a larger apartment with local financing from one of the 100 banks based in Panama. Either way, there is an abundance of renters in Panama looking for furnished apartments to occupy regardless of the type of unit you have purchased. Once you have taken ownership of the property, hire a licensed property manager like House Hunters Panama to locate and place a qualified renter in the unit.

 

There is no doubt that this is the right time to invest in real estate, Why?

  • It is completely safe to buy real estate for foreigners in Panama as there are more than a dozen laws in Panama specifically established to protect the investments of foreigners, not to mention that private property in Panama is protected by the Constitution. Many thousands of foreigner’s own properties in Panama in fact a lot of the countries growth can be attributed to foreign investment. Source: https://goo.gl/f7r5uQ
  • Take advantage of the tax incentives. Many of the new construction buildings have a 20-year tax exemption in place on real estate taxes!

 
 

6 Simple Steps Outlining the Purchase Process of Real Estate in Panama

1. With the help of a licensed real estate brokerage like House Hunters Panama, locate a property you like and negotiate the price and terms of the sale with the seller.
2. You must find a qualified lawyer in Panama to handle due diligence of the property. Connect your lawyer with the seller’s lawyer for all pertinent details on the property.
3. The Sellers attorney normally prepares the purchase agreement that will outline the terms and conditions of the sale. Upon signature of this document the buyer will pay an initial deposit of 30% of the sales price.
4. The purchase contract will outline the amount of time there is to close ( normally 45-90 days). During this time, the final deed and all closing documents are prepared.
5. Upon signature of the final closing documents, the final payment will be made from buyer to sell completing 100% of the purchase price.
6. The Purchase – Sale Contract as well as final signed deed is presented to the Public Registry for registration, where the title of the previous owner’s property will be transferred to the new owner.

 
Below there is an example of a mortgage simulation if you were buying a property valued at $360,000 USD. Assuming you are giving an initial payment of 200K (56% of the total price) or even more, and you will need a loan from the bank to pay the rest within 20, 25, or 30 years.

There are more than 100 bank entities in the Panama with headquarters and branch offices in many countries.

 

MORTGAGE CREDIT SIMULATOR
Term 30 Years 25 Years 20 Years
Price $360,000 $360,000 $360,000
Initial Payment 56% 56% 56%
Type of Property New Apartment New Apartment New Apartment
Approx. Monthly Payment $941.39 $1,013.11 $1,128.26

 
 
The results of this projection are a simulation based on hypothetical referential amounts, therefore they do not represent a commitment to any bank entity. This calculation does not include life and fire insurance. The granting of credits by a banking entity is conditional on compliance with internal policies and the evaluation and approval of each bank’s credit application.