Panama, Here I Come

Sunday, May 25, 2008

Read more aboutPanama in International Living Postcards—your daily escape

I lived in Panama City for seven months in 2006. “Boomtown” doesn’t even begin to describe the atmosphere there. This is a place bursting at the seams with new construction, new business ideas, and new money flooding in from almost every corner of the globe.

I’m very excited to be going back there at the end of July for International Living’s Live and Invest in Panama Seminar.

Why am I looking forward to this?

Because Panama is one of the world’s most exciting places to be right now. And if you want to make money, Panama City is hard to beat. There is one play right now that is particularly attractive, for one simple reason.

Hotel room shortage.

Here’s how my friend, Ronan McMahon, of Pathfinder Real Estate, puts it:

"Panama’s visitor numbers are growing at a much faster rate than its supply of hotel beds. Visitors are coming from the Americas and Europe for vacation, to buy real estate, to do business, or to work. Multinationals are setting up regional headquarters in Panama and the big infrastructure projects are drawing in skilled labor and contractors.

"There are about 10,000 hotel beds in the pipeline. This will take a couple of years to be delivered, and all the time visitor numbers will continue to grow. Supply will be at least five years catching up with demand.

"Here’s an example. Up to the middle of last year I would call one of my favorite Panama City hotels a couple of days before traveling. I never had a problem getting a room and never paid more than $128 per night.

"Last December, I tried to book a hotel room for a visit in January. I was told that there was no availability until May at the first two hotels I contacted. Extensive searching for an apartment rental was unsuccessful. I was lucky to find a hotel room for $285 per night.

"Here’s the great part…even if you don’t have the capital, expertise, or time to be in the hotel business, you can profit from this situation.

"Under a typical condo-hotel program, a developer will construct a hotel and sign an agreement with a hotel group to run the premises. The developer then sells the units to individual investors. Revenue from the hotel operation is pooled and divided between the hotel operator and the owners of the individual units. Splits between owner and operator can be as high as 70/30 in favor of the owner. If you pick the right project, you can expect a net annual yield in excess of 8%.”

I’m looking forward to hearing Ronan talk about this hotel room play in detail at the Live and Invest in Panama event in July...which, by the way, will be held just outside the city at Playa Bonita, one of the most beautiful beach resorts in the country, so no worries about room shortages for our event attendees. (If you want to attend the event and stay in town, e-mail our Events team. I’ll definitely be staying on the beach, though.)

I’ll admit that I’m not a big city guy, but I do love Panama. It’s a surprisingly big and diverse country, with miles of beach and mountains that are as quiet and peaceful as Panama City is bustling and boisterous.

If you plan to live in Panama, it still offers one of the best retiree packages on the planet, no matter where you put down roots. That’s a feature that Jessica Ramesch, Panama native and editor of our Panama Insider, tries hard to make us all remember. Here is what she told me:

“The health care benefits alone are huge…15% off hospital bills, 10% off prescription medicines, 20% off medical consultations, and 15% off dental and eye exams (unless insurance applies)…and, by the way, the health care in Panama's metropolitan areas is some of the best in the world.

"That’s just the tip of the iceberg, though. As a qualified pensionado in Panama, you also get:

• 50% off entertainment—movies, theaters, sporting events, etc.—anywhere in the country
• 50% off closing costs for home loans
• 50% off hotel stays from Monday through Thursday
• 30% off hotel stays from Friday through Sunday
• 30% off bus, boat, and train fares
• 25% off airline tickets
• 20% off medical consultations
• 20% off professional and technical services
• 15% off at fast food restaurants
• 15% off hospital bills (if no insurance applies)
• 15% off dental and eye exams
• 10% off prescription medicines.

"In addition, you’re entitled to a one-time exemption from duties on the importation of household goods (up to $10,000)…although the shopping in Panama is so good you'll most likely want to buy here. You're also entitled to an exemption every two years from duties for the importation or, even better, local purchase of a car.”

Jessica is going to co-host the Live and Invest in Panama Seminar with me, and, take my word for it, she’ll make a believer out of you…she’s one excited gal when it comes to all the benefits her home country has to offer.

So yes, I’m chomping at the bit to get back to Panama. From just about every lifestyle and investment angle, so much is happening there that I owe it to myself.

Dan Prescher
Publisher, International Living

P.S. If you want to join me and the other Panama enthusiasts at the Live and Invest in Panama Seminar, sign up today and you will learn (as the name suggests) everything you need to know about living and investing in Panama…and you’ll get the early-bird discount of $100.