Panama Real Estate Companies

The performance of these funds will come from the operation of real estate and the earnings and losses that the investor obtains will depend on the income generated from rent or from sales of properties.
With the growth in the construction sector, which in June of 2008 was 54.5%, it is today attractive to invest in a residence or apartment.
But there also exists in the market another alternative, which is real estate investment funds, and participating in these is a very profitable business.
The performance of these funds will come from the operation of real estate and the earnings and losses that the investor obtains depends on the income generated from rent or from sales of properties.  Besides this, the investment will be adjusted annually by the change in value of the properties that the fund possesses.
One will ask, why invest in these products?  As in any investment, you should analyze all of the implications that are invested in this figure.

What is a real estate investment fund?
It’s a portfiolio of resources (assets) formed by the savings of many investors that is purposed toward the acquisition of real estate, generally for rent or for sale.  The investor buys a part that is proportional in all of the real estate that is acquired, which is known as a “share” and permits obtaining part of the results that the portfolio generates.
These funds are “closed”, which implies that the number of shares is limited, which are negotiated via a stork market and their terms are definite.
There exist other investment funds whose portfolios include other goods, for example, value in debts or shares.
For whom are these funds?
The standing norm establishes minimum investment amounts of 5,000 dollars and up.  As the real estate business is a long term one and with variables that demand some knowledge of real estate, these funds are for the investor who:

• Knows about investment funds and the functioning and risk of real estate investments
• Can commit money for the long term
• Has at his disposal the minimum established amount
• Has other investments (diversification)

Every investment carries a risk.
BEFORE DECIDING ON WHICH FUND TO INVEST IN, KNOW THE ALTERNATIVES AND RISKS ASSOCIATED WITH EACH ONE.

Some risks common to these funds are:
• Risk of concentration of the real estate.  This occurs if the invstors concentrate in only one type of real estate or in only one property or project and when for reasons of unoccupancy, vacancies, or  disasters, the income of the fund is diminished.
• Risk of concentration of renters.  This happens when the income comes from the rent of only a few renters or from only one activity and when, due to market conditions, or incompliance with a contract, eviction or disoccupation the income of the fund is reduced.
• Risk of unoccupancy of the real estate.  The fund could acquire properties that remain unoccupied for a long time.
• RISK OF INADEQUATE VALUATION OF PROPERTIES.  THIS HAPPENS WHEN PROPERTIES ARE PURCHASED AT AN EXCESSIVE PRICE OR ARE SOLD AT A VERY LOW PRICE.
• Risk of liquity of participation.  In these funds, in order to recuperate an investment shares of stock must be sold in the stock market.  You could not successfully sell the shares at the desired speed or receive less money than hoped for depending on the offer and demand.
• RISKS OF OPERATION.  EACH FUND HAS ITS OWN DEFINED WORKING RULES THAT THE ADMINISTERING COMPANY MUST FOLLOW AND ARE AVAILABLE IN THE PROSPECTUS.  NEVERTHELESS, YOU AS AN INVESTOR COULD BE PREJUDICED BY GUILT, WILLFUL MALICE, OR NEGLIGENCE OF THE ADMINISTERING COMPANY OR BY AN EMPLOYEE.

In summary, risking yourself or not entering in this type of business is the decision of each person.  What is certain is that before doing so, you must obtain information about the characteristics of the investment, the investment policies, the real estate investment fund’s risks, and the administering company.

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There are so many reasons why Panama is so popular when it comes to buying real estate. From the affordable lots and spectacular beachfronts, one is bound to be certain about purchasing property in the country. However, it is not as easy as it may sound. As with buying any real estate, one should be cautious and wary of possible issues and costly mistakes that might be made in the process of buying a lot. Here are some of the things you should know about to avoid the usual pitfalls when planning to buy property in Panama:
1.    You Should Never Deal with an Unqualified Broker. Always make sure your real estate agent has a license. Foreign agents will have a hard time getting one so at least be certain that their agency has a license. However, a license doesn’t guarantee the credibility of the agent. The important thing is that you find a legitimate and expert broker. This means someone you can trust and who won’t put you in risky situations just so they can make more money out of a sale.

2.    You Should Evaluate Potential Properties. It is basic that you should compare the various prices, location and characteristics of your potential purchases to make a sound decision. Make sure you compare and consider all your options for investments. Avoid being easily convinced by hungry realtors. The features of the properties should be according to your needs and wants. Contrast areas against each other and figure out which would make the best investment. Have at least four options to choose from.

3.    Assess Pre-Construction Condominiums: Scams and shady deals can be predicted when there is a huge hype on anything including real estate. There are a lot of publicized deals and offers so be wary of these suspicious deals. Check the possible advantages you might get in pre-constructed buildings compared to pre-built houses or apartments. Whatever decision you make in the end, caution and attention to details will always save you from being cheated into a bad purchase.

4.    Visit the Property: This doesn’t mean you drop by once before closing the deal. Visit on different times of the year to see how it is during the various seasons and times of day as well. There are plenty of considerations to make when you decide to buy a property, among them are the weather, flow of traffic, proximity to service centers and others. Make sure you frequently visit the area before jumping into major decisions.

5.    Obtain Title Insurance: There are already reputable insurance companies in Panama. They have slightly higher rates compared to the ones in the United States because the industry is quite young in Panama. However, if you plan to invest a good deal of money, it is recommended that you spend just a little more for title insurance.

6.    Exercise Caution with ROP Properties: Panama citizens may have less trouble with Right of Possession (ROP) properties but unless you are an expert in Panama real estate issues, it is best that you either avoid or be careful about these properties. ROP lands take a long time to be titled with a lot of connections needed. This will not be the best idea when it is your first time to invest in Panama real estate. It is better that you opt for less complicated properties especially when you want to be sure about the lot or condominium you are buying.

7.    Research Your Potential Location: Decide early on which region you want to buy from. It helps to visit or take a drive to check out the best places. Don’t be swayed into buying what others, including your agent, want you to buy. Some areas may be more expensive than others but you may find ones that are not yet developed, such as those that the real estate industry hasn’t reached.

8.    Do Not Be Fooled By False Advertising: Don’t be convinced by property characteristics as placed on paper. You must consider the locations accessibility, history and other features. Also check out places that are not as well promoted as others. You might just find a region with a lot of investment potential if you follow your instincts rather than relying on others and statistics.

9.    Be Wary of Flashy Bank Offers: You might get excited with the many bank offers and mortgage loans but these may not be all that they claim to be. For one, you may not even be qualified for the opportunities they advertise about. Be sure you will be able to finance the mortgage and don’t relax when you think you’ve found a bank offering up to the tremendous amount of 70% for your estate.

10.    Build a Network: Connections are very important in Panama as with anywhere else. Find people who are experienced in the country’s goings on in real estate. Connections as these will save you a lot of trouble when it comes to filing for business permits and licenses. When purchasing lots and apartments as well as building them, you might get into a few hurdles that can only be solved by good contacts and even some cash. It would be helpful if you know the right people.

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