Five Reasons You Should Consider This Panama Investment Opportunity

Nov. 19, 2008
Panama City, Panama

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Experts Agree: Now Is the Time to Buy Into This Industry

Dear Panama Insider,

What's the best way to grow your money by investing in Panama? Right now you can buy into an industry that's booming and yet desperately needs new competitors to satisfy the demand.

I'm talking about the hotel industry—and no, you don’t need to have your own hotel to take advantage of Panama's need for short-term accommodation. You can invest much less and reap the rewards simply by buying a condo hotel unit.

What’s a condo hotel?

It's a building used as both a condominium and a hotel. Basically, you have the option to buy your own unit to use when you like—say, when you’re vacationing or doing business in Panama. When you're not in town, your unit goes into the rental pool so you can make some extra money.

Why is this a good idea right now? Here are five reasons:

1. It's a well-known fact that Panama has only recently begun to really grow its tourism industry and there's plenty of room for growth. Over the past years growth has averaged between 12% and 13%. The Panama Tourism Authority (IPAT) says it does expect growth to slow in light of the world financial crisis, but only to about 8% or 9%...still a healthy rate. In light of increasing traffic, the government is spending $5 million over the next six months on improving airport infrastructure.
2. There's a serious hotel room shortage in Panama today and occupancy is often over 90% in Panama City. According to government sources the nation needs some 20,000 new hotel rooms just to meet the demand…but so far, the projects that are planned for the next few years will only bring in some 8,000 new rooms. If you build it, they will come…
3. Panama's various mega-projects are expected to contribute to the hotel room shortage over the next few years. These projects include the Panama Canal expansion, the Panama Pacifico Special Economic Area in Howard, a massive port system expansion, and a possible $8 billion refinery project, proposed by Oxy and Qatar Petroleum.
4. Panama is well positioned to weather the world economic crises thanks to laws that require banks to be extremely conservative. Panama's banking sector, known as the Switzerland of the Americas, has long been sought out by those who wish to protect their money from taxes or unstable governments. Given the current global climate, Panama banks are expected to receive even more foreign clients.
5. It's no secret that short-term rentals are better money-makers than long-term ones. If you buy a condo unit, you have the advantage of both owning a piece of real estate that's likely to increase in value and earning high rental returns.

And remember, last week we told you that Panama is one of the top countries in the region when it comes to ease of doing business…that means that many of the business processes you'll have to go through are quick and inexpensive as compared with other countries. No wonder Panama is one of the region's leaders in foreign investment…

Thanks for reading,

Jessica Ramesch
Editor, Panama Insider