Property Investment In Panama

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“Kathleen, I am interested in investing in rental property overseas, and I have researched Montevideo and Panama City as the most likely choices. Are there compelling reasons why one of these cities would be a better investment option than the other?”

— Marvin R., United States

In many regards, Montevideo could be considered a better lifestyle choice than Panama City. It’s quieter, cleaner, calmer, more tranquil… But these things that may make it more appealing to some from a lifestyle point of view make it less interesting from an investment perspective. Panama’s capital is a vibrant and growing city being fed by many industries and receiving increasing attention from many different foreign investment groups.

I read this morning, for example, that job fairs have been planned this month and next to help source the 7,000 workers being sought to help build the new set of locks for the Panama Canal. And this is but one of many infrastructure and investment projects currently under way in Panama City requiring labor and creating activity.

Montevideo, on the other hand, while a charming place, is sleepier, with less compelling prospects for long-term growth.

The challenge in Panama City is finding a rental unit for a price that will allow for a reasonable rental income yield. It’s possible, though, as the market has settled over the past 18 months.

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“My wife and I have lived for five years in Mexico, the first four on Lake Chapala. Last year we bought a home in La Manzanilla on the Costa Alegre after getting to know the place over three years. We kept our house in San Antonio Tlayacapan on Lake Chapala as a snow-bird rental and a place to escape from the hot/humid September/October months in La Manzanilla (the rest of the year is fine with us). Our Chapala rental pays for the house for 10 months a year, and we have it available as a mountain/lake retreat for six months a year. What could be better?

“Why don’t you recommend beautiful Mexico to people? The culture could not be better, the prices are still low (we spent US$3.80 for dinner for two, including a shared beer and 15% tip last night). Ninety-nine percent of Mexico is as safe or more safe than North of the Border, especially if you live next to local neighbors.

“Again, I’ve enjoyed our on-line relationship for over six years now, but why so anti-Mexico?”

— Jon P., Mexico

I wouldn’t say I’m anti-Mexico. Ajijic is too organized for my taste (that’s a personal position, I understand…for many, the big attraction of this area is the well-established expat community…for me, that’s a negative)…plus Lake Chapala, the last time I saw it, was more like a mud flat. I understand, though, that this has changed and the lake has largely returned.

I am anti-Merida. This is a big, flat, really, really hot city in my view…not at all charming and, bottom line, just way too hot for comfort.

On the other hand, I appreciate the charms and appeals of colonial San Miguel de Allende, for example, and of this country’s Pacific coast. In fact, I’m planning a trip (for May) to Mexico’s south Pacific coast…so I’ll be reporting from that part of the country in weeks to come.

One important downside to Mexico is the tax situation. The country taxes residents on worldwide income, my least favorite form of taxation.

Continue Reading: Beachfront In Belize

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Live And Invest Overseas

Live and Invest Overseas is the world's savviest source for top opportunities to live better, retire in style, invest for profit, do business, and own real estate overseas. Established in 2008, the Live and Invest Overseas' editors and correspondents have more experience researching and reporting on top opportunities for living well, investing for profit, doing business, and owning real estate around the world than anyone else you'll find.