Turn-Key And Upscale On Panama’s Gold Coast For Less Than US$200,000
Pedasi is growing up. I first visited this part of Panama back in 2006, after speculators had already run up prices for oceanfront land. Since then developers have moved in. Houses are getting built. But what’s perhaps more interesting is that, on this part of this coast of the Azuero Peninsula, it’s not just housing developments being built. The area is developing, too. Not only the infrastructure, which is impressive already but being improved all the time, but the town itself, as well. Pedasi was little more than a village the last time I saw it. Today, if I were my wife, I might describe it as bijou. Anyway, it’s cute. Charming.
Part of what makes it so is the colonial architecture. There’s perhaps more of it here than in any other of Panama‘s Pacific coastal towns and very few modern-day buildings. This is one important difference between Pedasi and its big sisters to the north, Las Tablas and Chitre. Those towns are more nondescript, mostly because that’s the best word to describe their architecture.
It’s Pedasi’s charming appearance that attracted the first wave of expats a half-dozen years ago. Back then it was the speculators and the surfers, typically the pioneers for discovering new coastal destinations.
Since my last visit to Pedasi two or three years ago, the second and third waves have moved in—the entrepreneurs and the developers—and these two groups have been busy. Three years ago, Pedasi had a few hostels, a small bakery, a restaurant, and an art/gift shop on the main square, but not much else. Today, Pedasi is home to dozens of small businesses, including several bakeries, boutique hotels, shops, restaurants, and a new bank building.
And several residential developments have been launched on the nearby coastlines. Houses are being built…people are moving in.
Kathie and I toured the area last week and saw a number of things of interest, which we’ll tell you about in time. Today I want to direct your attention to what I’d say is the most appealing turn-key opportunity to own on this coast at Pedasi right now.
In one of the gated communities here, an American couple, Dennis and Christie, is building a 23-unit condo building with ocean views. The couple came down to Panama, scouted dozens of locations across the country, from Bocas del Toro to Boquete, but fell in love with Pedasi. They were drawn by the charming look of the town, as I’ve described, and also by the community they observed developing here. They liked both the place and the people it’s attracting. And they decided to put their building and development skills and experience to work here.
Panama developers tend to try to squeeze out as many dollars from a project as they can. American developers tend to fit in as many amenities and quality items as possible. It’s usually two very different perspectives.
Dennis and Christie are American developers whose experience has been building luxury custom homes in the States. The bottom fell out of the market where they’d been active for decades, so now they’re transporting their experience to Panama. They turned their attention to Panama in the context of early retirement. However, as for many people, early retirement for Dennis and Christie wasn’t about transitioning to doing nothing. It was about transitioning to doing something they love in better weather…and a better market. What Dennis and Christie love is building quality turn-key residences. That’s what they’re doing now in Pedasi. They’ve designed a four-story 23-unit building with three main floors and a penthouse level with three units.
The most interesting of the units are the two-level lofts with three bedrooms and three baths. You enter these units on the second floor, and an internal stairway takes you up to what is the third floor of the building (second floor of the unit), from which you’ll have broad ocean views.
The building has been designed to allow for flexibility. Not more than 23 units will be built, but, if the loft version proves especially popular, they’ll be able to convert other units to create four more lofts. I’m predicting that will happen. The lofts really are cool.
Ground floor units start at US$198,706. Again, there is flexibility. You can choose to have a spacious one-bedroom/two-bathroom unit with a den or a comfortable two-bedroom unit. Both are in the same 129-square-meter (1,389 square feet) footprint. Choose a 300-square-meter loft, and you’re buying the best unit with the best views for US$600,000.
As the building is part of a gated community, owners will have access to all amenities within the community, which will include a spa, a beach club with swimming pool, a fitness center, a beach bar, tennis and basketball courts, and, of course, the long sand beach.
Pedasi town, with its restaurants and shops, is less than 10 minutes away. Las Tablas, with its supermarkets and other shopping, is less than a half-hour away. One of the best surfing beaches in the world is less than 30 minutes away in the other direction.
A new local airport is being built near Pedasi that will bring in new local airline service.
As I mentioned, Pedasi is growing up. Which means it’s attracting growing numbers of tourists. And they all need places to stay. Even with more hotels opening up in the last three years, it’s very hard today to find a room in high season, and rentals for people looking to stay for a few months or longer are thin on the ground, as they say. The condos at BellaMar will provide much needed additional rental inventory, making them ideal if you’re looking for a place to spend only part of the year. You could rent your unit out when you’re not using it yourself.
Assuming you rent your condo 25% of the year during low season at a short-term rental rate that is less than the going hotel rates (that is, working from very conservative assumptions), you could cover your carrying costs for the condo and make a net return of 2%. Not bad for a place that could double as your second home.
Spend only a few weeks a year here and make the condo available for rental during high season, and you could see net returns pushing double digits with just 50% occupancy.
Again, the developers have experience. Christie built custom homes for 11 years in Missouri. Dennis developed multi-unit apartment buildings. They know their stuff, which means you could buy a condo for a reasonable price and expect excellent quality. And a reasonable or better rental return.
The project is in pre-construction now. Construction will begin at the start of the next dry season (January 2013) and is expected to take about a year, with delivery scheduled for Jan. 14, 2014. Terms are reasonable. A US$5,000 refundable deposit will hold a unit for 30 days to give you time to come down to Panama, meet Dennis and Christie, and review the plans and the site. When you sign a contract, you put 10% down, with another 10% due after 30 days and a final 10% due 60 days from signing the contract. The balance is due at closing, and that balance could be financed through a local bank in Panama. Dennis and Christie are working with several banks right now to negotiate the best terms for their buyers.
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