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Panama is home to many tax benefits and future growth prospects, which have in turn attracted a large amount of international corporate business to establish a base in the central trading hub of the Americas. Projects such as the Panama Canal Expansion project, the Punta Pacifica project, as well as the numerous other incentives and developments that are taking place ensure that the need for corporate housing as well as rental housing will remain strong and continually in demand.

A number of companies transfer their executives to Panama, where a business is expanding at and extremely rapid rate, which in turn calls for short, medium and longer term rental options for the executives as well as the business travelers. The executive placement contracts can last anything from one year onwards, which has an effect on the rental occupancy, currently reported at over 90%.

The rental market is geared for growth, in accordance with the Panama economy and business infrastructure, and a real estate portfolio within Panama is an ideal hedged investment, as traditional rental rates rise in accordance with inflation. The rental market is still very competitive in Panama, and allows one to enter the market at a well valued level, to secure a portfolio that can grow in accordance with the displayed development of Panama City and the various growth opportunities that are earmarked for development.

The full service rental market is fairly new in Panama, and therefore displays value added opportunities for executives and traveling business people. The reasonable rents that are at current market level, between $2,500 and $3,500 per month for an average 2 bedroom unit, also include amenities such as broadband internet, local telephone calls, and access to channel television. A one bedroom apartment in Panama is usually available at about $2,000 to $3,000 per month. The full service and fully furnished rental options available in Panama are a major benefit to both the investor as well as the rental tenant. The tenant does not need to seek out a neighborhood or unit to purchase, as well as worry about all the furniture being transferred and so forth. Hence the individual or family can move into the rental unit and go about their business without worrying about all the other relocation issues.

The availability of apartments in Panama are still at great value levels, compared to other areas of the world, and in terms of the business infrastructure and developments occurring in Panama. One must be aware of location, management and amenities on offer in the desired investment complex. This is where a valuable real estate advisor and partner can assist with making correct and timely decisions in line with your real estate portfolio objectives.

As with any real estate purchase and investment it is all about location. The current demand and availability of rental apartments is within the down town area of Panama City, which is in the heart of the business district, as well as along the waterfront. These areas offer quick an easy access to people working within these districts, alternatively the close by areas of Punta Patilla, San Fransisco and El Cangrejo are only 15 to 20 minutes from the centre and have also proved very popular in terms of the rental demands. One of the latest development areas in and around Panama City is that of Coste del Este which have been earmarked for commercial office space as well as high rise apartments. All these mentioned areas have access to shopping facilities, nightlife and great dining experiences.

If one is contemplating the investment into the real estate market in Panama in terms of rental apartments, and you are looking at targeting the corporate client then it goes without saying that the unit(s) should be fully furnished with up market and classical furniture, without the overkill and rather in line with a suitable contemporary look and feel of the apartment. Instead of hiring a top class interior designer, one should rather consider the market that the unit will be serving, in other words the functionality that will be required by your future tenants whilst bearing in mind that a more neutral approach be implemented in order to successfully add a marketability to the unit, and not scare the potential tenant off due to clashing color and furniture choices. Dependent on the lengths that one would like to go in terms of furnishing the apartment will obviously determine the budget and expenditure that will be incurred in kitting the apartment out. Knightsbridge Property Management Services has a number of contacts, as well as the expertise to assist in this regard, as well as advise on possible alternatives in terms of the ambience and desired décor of the rental unit.

Whether you intend to be an absentee or local investor a suitable and well qualified property management service is a must. Not only will they be in a position to save you time and money in the long run, but will partner you along the route whilst adding value to your portfolio and ensuring that the rental unit is well maintained and looked after as if it were their own.

A good property management service company will essentially cover the following duties and functions:

Screening and selection of suitable candidates for tenants;
Advertising, marketing and showing the property available for rent;
Utility bill payments, in respect of cleaning fees, building fees, rates, and so forth;
Inventory of the apartment, and inspection on a pre and post occupancy basis;
Assistance with the design and décor of the unit;
Provision of cleaning and other related services;
Reconciliation of income and expenditure and reporting thereof as and when required;
Taxation registration and submission on behalf of the owner;
Overall management of the property with respect to any potential issues that require resolution.

The property management function is not limited to the list described above, and this only serves to highlight a few of the benefits of a property management company. Additional services that may be rendered, dependant upon the nature of the selected Property Management Services program will determine additional tasks and functions in terms of the rental property.

Additional services that may be provided by the appointed property management service can take the form of a more personal approach towards the tenants via an establishment of an infrastructure for the tenant upon arrival in Panama. This would depend upon the type of service program elected for with the management company.

The property services management fee will depend on the level of services, as well as the type of rental being a short or long term rental, and can vary from 20 to 25% of gross rent collected for the short term programs, as well as additional monthly fees, dependant on the service program, and may incur a setup fee when starting with the company, which is to cover administrative and registration items. For the longer term rental programs the industry norm is usually the first months rent and a nominal rate of 7 to 10% monthly fee thereafter.

Panama has many exciting and varied projects which ensure that growth and expansion will be continued. Projects such as the Punta Pacifica, the canal expansion, the oil refineries, mining prospects as well as the fact that many US retirees are settling in Panama have formed this broad base for even further development in Panama. The country has received numerous positive ratings from credit companies and continues to outperform many of the neighboring Central American countries. The stability of the country is reflected in the policy framework and initiatives that the government provides for tax relief and incentives to encourage international business to establish in Panama.

The opportunity of investment into Panama is suitable for those seeking a solid investment base, with the projected need for up market short term and long term rental housing set to increase with the planned projects which are to be phased in over the next few years. The encouragement by the government and the market in general pts you in a favorable position to realize long term growth with such an investment, and whilst Knightsbridge Property Management Services is in the unique position to be able to partner with you in your investment strategies, we look forward to providing a value added service to you and our many other clients in this exciting and growing market.