Some of you will say – well if so many countries are going downhill economically what about the Republic of Panama? Well this is a good point. Panama is actually not dependent on any one country to any appreciable extent. In Panama 15%-20% of the economy is dependent on banking. Panama has about 150 banks that are from many different countries around the world which due to Panama’s Neutral Status and Bank Privacy Laws has turned Panama into the Switzerland of Latin America. Panama is not in any tax treaties is one reason this goes on. Income tax evasion is still a civil offense in Panama. Panama is the Switzerland of Latin America but in reality the protections and privacy laws in banking and in general are better here than in Switzerland, check it out for yourself. What this means is that it is unlikely for Panamas banking system which is a vital part of their economy to ever get hurt since it is spread out into so much of the world.

In Panama there are still Bearer Share corporations which are owned by no one on record anywhere but by the person who has the papers for the corporation. Thus corporations can be transferred in a few seconds with no recording of anything. It is very common to have a bearer share corporation own real estate in Panama thus making the real estate ownership untraceable and most inconvenient for an entity that goes around confiscating assets which governments and lawyers are so fond of doing. This has given Panama a healthy business regarding corporation registration and formation which again is another aspect of the economy of Panama likely to not be threatened. Similar to this is the maritime ships registration business which also brings in a lot of money to Panama and again is most unlikely to be at risk.

Any sort of property can be owned by a bearer share corporation in Panama – a store, real estate, artwork, collectibles, jewelry. It is a way of owning and controlling things that are impossible to trace back to you thus protecting the asset from litigation etc.

To further assist people with privacy and protection Panama has foundations which no one really ever owns and one can have the bearer share corporation owned by a foundation. If you could ever penetrate the corporation far enough to see who owned it the circumstances would be most confusing so it is a commonly employed asset protection tactic used by people worldwide. Any sort of property can be owned by a bearer share corporation in Panama – a store, real estate, artwork, collectibles, jewelry. It is a way of owning and controlling things that are impossible to trace back to you thus protecting the asset from litigation etc. A bearer share corporation can not have a bank account without providing the bank with what is called the beneficiary owner of the account which sort of reduces the privacy value of this vehicle when it comes to banking. Could one have a bearer share company own the house they live in and pay rent to the corporation in cash getting receipts from the corporation, sure why not.

Panama does not import or export that much to the USA. Panama trades a lot with many other countries. I can not ever once remember seeing an advertisement of any sort in the USA for tourism to Panama. Panama has a nice and flourishing tourism industry but it is not all that America dependent. Lots of tourists come from Central and South America. Mostly American go to the Caribbean. Prices are good enough and the travel times are somewhat less. Panama tourism involves tourists from many different countries not being dependent on any one of them. Let’s not forget the Panama Canal which generates one billion dollars a year in revenue which is a lot for a country of only 3 million people. They are considering expanding the capacity of the canal to handle super ships but in any event this revenue is most unlikely to go away, thus it is another ingredient adding to the stability of Panama. Panama is just beginning to exploit ecotourism another fantastic source of revenue. After this medical tourism will be pursued as another source of bringing revenue into the country. Panama grows things and manufactures very inexpensively – two vital ingredients for stability and economic growth. If this is not enough Panama uses the dollar as currency so you can have all the stability of the dollar and since oil is priced in dollars demand for dollars will be high especially with rising oil prices so you avoid any currency conversion costs and have stability. My bottom line is that Panama may very well be more stable and economically secure than your home country plus offer you a better lifestyle! Think about it!

Now there is a migration of people who want to live here which is just starting a real estate boom which you can still get in on at close to the ground floor. Remember such booms in the USA and how easy it was to make money. Remember buying a house and selling it at a profit before the construction was finished. Here is your second chance because this is happening in Panama right now. What is my point- sell your house while you can still realize some gains and come enjoy the good life in Panama while real estate is still a steal and what the heck buy a couple of spec houses or lots if you have the money – opportunities like this don’t come around that often.

Housing in Panama

Housing costs are not what they used to be. Housing prices are shooting up in recent years as more and more Expats discover the advantages of life in Panama. The peak in housing prices will be at the very end of 2007 or in 2008 (my guesstimate) then prices will stagnate for a while and probably fix there. A price decline would require a shortage of incoming Expats which is something I do not see happening any time in the near future. Most Expats are probably buying homes/apts for an average price of $160,000 taking into account many live in many different rural areas of Panama (see our real estate advertising section for details). As long as the Expat can sell their current home for more than the cost of their Panama home they will keep coming. Many Expats are getting $300,000+ for theircurrent homes trying to cash out before the bottom falls out due to rising unemployment, rising interest rates, rising bankruptcies, energy costs affecting commuters and home heating oil costs soaring too. Many Europeans are coming here to take advantage of the high Euro. Since Panama real estate is priced in dollars it is like getting a 20% discount for the Euro buyer. Now when the Euro falls they sell their real estate which in Panama is priced in US dollars thus when they convert back to Euros post sale, they will buy more Euros with their dollars which would rise in value if the Euro fell. Sort of a fail safe for the European speculators which there are plentiful of these days.

I would speculate that Panama City houses run about $1000 a square meter (a sq. meter is slightly over 10 square feet). So a 200 square meter apartment (approx 2100 sq. ft.) would be $200,000. Now this would be the starting price and you could surely negotiate this down somewhat. Prices in other outlying areas will vary so do check our real estate section for current prices and offering with pictures so you can see what you’d be getting.
Rentals in Panama city come in two flavors – furnished and unfurnished. Furnished units are hard to come by. Most furnished units will not have really nice furniture, got it? The furnished apartments will usually have furniture that shows wear and may not be so clean, even if you spend $1900 a month. So what we learned was this. Furniture in Panama is very nice and cheap, real cheap. Like a king size bed, no headboard with frame for $210. The mattresses are great, not cheap foam but hand built and firm. We bought a nice sofa, love seat, plush chair with an Italian fabric we picked out, custom built for us in five days, delivered $595. The furniture here is not upholstery over fiber fill but solid foam, it is hand built and really solid. You can easily nicely furnish a 2 bedroom apt for $2000-$3000 assuming there are appliances which it probably will have. A nice brand new with warranty washer, dryer, stove, refrigerator will run about $1600 – $1700 delivered and set up. To really put the dog on and go first class for a 2 bedroom figure $5000 for furniture (not including appliances) and we are talking really nice stuff – rosewood, plush sofas with big pillows, solid wood all the way. If you spent $8000 on a four bedroom house it would look like $35,000 of furniture stateside but would wear better and be more comfortable. Dishes, lamps and stuff like that are really cheap. Consider not bringing your furniture down. Sell it and buy new stuff here with the proceeds, you can really do it. Anyway if you rent unfurnished there will be many more places to look at in the city or in the outlaying areas. Unfurnished rents are cheaper and you can take the savings and invest in your own furniture.

If you spent $8000 on furnishing a four bedroom house it would look like $35,000 of furniture stateside but would wear better and be more comfortable.

Okay in Panama City you can get a nice two bedroom apt in a decent neighborhood where you will be happy for about $900. If you want to live in a high end neighborhood by the water it can get up to $1800 which would be top drawer. Three bedrooms would start at about $1000 for a nice apt unfurnished up to $2500 for top drawer in modern buildings on the water on a high floor with an unobstructed view. We saw nice furnished apartments with views, three bedrooms for $1100 a month. Most all of these building will have some view – city or water. There will usually be a balcony. There will usually be a swimming pool and a gym but do not expect much with the gym typically too under equipped to be of any value. There will be enclosed parking (2 spots usually) and very adequate security. Nice comfortable apartments that do have closets. In the outlaying areas rents are less and the amount of available rentals is also less with furnished rentals being especially hard to find. If the project of building the extra canal goes through it is expected to result in an apartment shortage due to extra workers being sent here by their companies which of course means you could buy an investment unit furnish it and rent it out for big bucks for many years while the new canal is being built, not kidding about this. As a Pensionado, if you buy or build a new house, you won’t pay property taxes for 20 years, nor will you pay taxes on foreign-earned income. Make sure you check out our real estate section to get up to date prices on rentals and purchases.

Most apartments and houses have maids quarters. They are usually the size of a large walk-in closet with a full toilet attached and not air conditioned. This is the way things are down here. A maid will run about $200-$250 a month, her benefits will be about $27 a month. The maid is on 6 days a week, off Sunday (is this why so many people eat out on Sundays). The maid will cook, clean, do laundry and even shop for groceries. She may or may not iron – this is a sore spot with maids????? Maids will also serve as babysitters but many have an additional nanny. You can also hire a driver for about same money if you let him live in. Some may elect to have a live in driver and have a day maid. Most dwellings only have accommodations for one servant to live in. A driver drives you to restaurants and then when ready to leave you call him on cell phone and he comes to pick you up in front, same for going to mall, movies, bank etc. He will also help with errands and around the house.

For more information, please visit:

http://www.panamaexpertos.com

http://www.panamaexpertos.com/info.php?page=content/real_estate_overview&pagenumber=2

http://www.panamaexpertos.com/info.php?page=content/real_estate_overview

For Buy to Let market, the last few months have been difficult for the landlords with the credit crunch came increase on arrears, lack of buy to let mortgages and tougher lender’s criteria. But it is not all bad news, the houses are cheaper to buy, the rents still increasing and rental demand at all time high.

Credit Crunch

Last year, we started to see the effects of too much borrowing and declining in house prices in USA. One year later, economies throughout the world started to collapse, financial institutions going into administration, Governments in the verge of bankruptcy, mortgage lending at very low levels, UK house prices coming down and a global recession.

It’s all bad news, no! The buy to let market is stronger than ever with the demand for rental properties being higher than ever, due to first time buyers not moving into the ladder and immigration from east European countries.

Within a dreadful situation, we can always find good opportunities.

2009 New Year, New Hopes!

It will be into 2009 that we shall see some improvement on the lending, specially buy to let mortgages.

It’s been predicted the houses prices will still coming down but at much lower pace and probably in 2010 they may start coming up.

For the landlords it’s a time to consolidate and review their portfolio with great opportunities to invest if you are in strong position.

Buy to let Market

Between 2004 and 2006 the buy to let boomed, due to easily accessible buy to let mortgages and property prices growth. Now the buy to let mortgage diminish, tougher lenders’ criteria, specially rental cover, and house prices are coming down. 

Buy-to-let is no longer sizzling and many investors that started being a landlord in recent years are struggling as mortgage rates rise. Many could not change mortgages due to low or negative equity, so when the initial rate deal came to an end and they started to pay the Standard Variable rate of the Lender,  the rent was not enough to cover the mortgage payments.

Within the most affected are those investors who bought properties at a suppose discount to sale straight away, looking for short term investment but when properties prices started to come down and the houses taking longer to sale, they run to serious problems.

The golden rule of buy to let investment is to look as a long-term investment, taking seriously. If the landlords invest wisely, look at long term, do the homework and stick to the tried and tested method of investing for rental returns rather than capital growth, they will be successful. Otherwise, the investor will probably run into serious problems.

Buy to let investment does not guaranteed success as any other investment but doing it well and it can be an excellent piggy bank for retirement.

I am leaving now some tips for all professional or first time landlords:

Do your homework

If you are a first time landlord look at pitfalls before you look at the benefits, buy to let investments are time consuming, therefore think if it is the right time to invest in buy to let or leave the money on a good savings account.

If you are already a seasoned landlord, do not stretch yourself, look first to consolidate and add strength to your portfolio, as if you are in stronger position your next investment  will run smoothly.

Location, Location, Location

It pays to choose carefully where your next buy to let property will be. This does not mean to buy on a cheaper or expensive location but rather the rental demand in the area. Look for clues like if is near a University or Hospital, very trendy area for professionals, excellent amenities and links, etc.  Avoid all cost areas with oversupply of properties to let, look at properties and letting agents’ websites and if a certain area has numerous properties to let, think if you want that kind of competition as you may have to negotiate the rent down to let the property.

Look at the figures

Before you buy, take a look at several properties, writing down the ones are of your interest. Look at the rental yields on them, see if the rental income covers at least 125% of the mortgage payments and if worth to spend around 25% on a deposit, this will help you to secure finance and a good rental yield.  Many lenders restricted the Loan to values to 75% or less and rental cover to 120%-125%, you can still arrange products with less rental cover but think if you want to restrict your rental yield.

Your target tenant

Think who will be your tenant and imagine in his shoes? If you are student you like a place to be comfortable and clean, links to university, nothing luxurious. If you are a professional you will be looking at a modern and stylish interior but nothing too pretentious, and excellent links. If it is for a family rental, do not put any furniture in, leave as a blank canvas, normally over the years the family has a few belongings they want to take to the next property.

Look into your portfolio

Review your portfolio, see if the initial rate deals in any of the mortgaged properties ended and compare the rate you are or will be paying with the rates currently in the market. If you are better off with the lender’s Standard Variable rate, does not mean you stop looking for a better deal. Try to look once a month for new rates or ask to your adviser to keep an eye on the products.

See if there is any opportunity within your portfolio to get a higher rental income. Why not transform a house with 3 bedrooms, 1 dining and 1 living room into a 4 bedroom house with living/dining room; make a loft conversion/extension to get 1 or 2 more bedrooms; renting by the room, as by the room the rental income is normally higher (but must be on right area). The possibilities are immense to add value to your portfolio and increase your rental income without spending as much money as buying another property. 

Look at other areas

Most Landlords invest where they live but most of the good opportunities are normally in other areas.  Do not be afraid, as if you follow the golden rule, can be very time consuming investing areas away but can be worthwhile.

Ask for a discount

When you buy an investment property, you must not forget you enjoy the same benefits of a First time buyer – No chains, so you can move quickly.  If you do not ask for a discount you will not have it.

Avoid Tenancy pitfalls

Put aside at least 2 months of rent, in case when your tenant move out or when you just bought a property  will help towards the mortgage payments until you find a tenant.

Worth paying for a complete tenant check report, where the provider will get you a credit file of the prospective tenants, check their ID, get the references and they are not expensive.  It is not guaranteed you will be good tenants but helps a lot.  Also, you should consider a rent guaranteed insurance, where can cover for rent arrears, pay towards the legal costs to evict the tenants and damage made on the property. With this type of insurance you may request a lower deposit from the tenants to match the excess of the insurance, that may help to secure a tenancy quicker.  

Shop around

Shop around for letting agents, ask a discount to traders: plumbers, furniture. The more you save the higher will be the return from the investment.

G M

Buy to let mortgages

Buy to let rates

When considering hotel furniture the U.K. hotel owner, whether a large hotel chain or a single owner must think about finding a balance between choosing hotel chairs and tables that are of a quality that attracts customers and encourages them to come again and recommend the hotel to their friends and being affordable enough that the cost of them does not wipe out any benefit that replacing the old hotel furniture may bring. In these toughest of economic times when banks are at their most cautious with new lending this consideration is especially important and many private owners may consider deferring renewals until the economy improves. Many may not be able to – if their hotel furniture is to the point that it is worn out then the owner has little room for manoeuvre – to wait could mean disaster because they will lose their clientele and so their revenue stream. Of course another consideration is that the disastrous U.K. economy has led to a rapid and extreme fall in the value of the GB Pound again every major world currency, especially the U.S. Dollar and the Euro.

While this has had a real negative effect in terms of the cost of hotel furniture from the USA, Europe and the Far East, the positive effect is that U.K residents considering a holiday for their family this year are sure to be aware of how much extra a holiday to any European country will cost them and must have heard horror stories from their friends about how much more a pint or a meal costs now, let along accommodation if they are arranging this themselves. So there will be many potential holidaymakers in the UK planning a British holiday this year rather than a US or European one. So for the coastal trade and established areas of tourism this must be good news this year with rising demand giving the hotel owner the opportunity to enjoy high occupancy and even – heaven forbid – increase their room rates a little.

Right now there is a bewildering range of hotel furniture available. A simple internet search of hotel furniture will bring up many Companies offering anything from the most modern to the most traditional ranges of hotel chairs and tables in wood or steel, fully upholstered or with solid seat. When choosing a style that is right for their hotel the owner can consider the kind of client that they are attracting already and think if they need to keep the style the same or make changes to reinforce the style they have created or make changes in order to attract a different kind of customer. Of course the interior of the rooms must play a part in their choice too, as a hotel with oak timbered rooms is likely to look more than a little strange with modern chrome plated stacking chairs and steel framed tables!

A traditional hotel looks very attractive with wooden chairs for the bar area, with wooden framed bar chairs with some upholstery at least, traditional designs like the ‘Mates’ or ‘Captains’ chairs being favoured. With these, wooden framed tables with turned wooden legs can be bought in a variety of sizes, round, rectangular or square. Because these are made of natural timber they can be finished in any colour from the natural shade of the timber used through to an attractive rich brown walnut, deep red mahogany or dark Jacobean oak colour. So whatever interior style the dining room has, the hotel tables and chairs can be made to complement it.

For the breakfast and dining areas steel framed chairs and tables are often chosen because they offer good strength at a low price and the chairs can be bought as stacking chairs to give the added advantage of being stackable to save space when the room is required for another function. Right now there is fierce competition between Companies selling this kind of chair, so prices are at their lowest for many years. The frames are available made of steel or aluminium which is lighter but carries a premium in terms of price. These chairs are available with a wide choice of colours, the most popular being gold, silver or black. Recently special printed coatings are also available, so a wooden effect can be achieved. With these chairs it is important to remember that when they are stacked they are heavy, so it is necessary to buy a transport trolley so that staff members can move them without risk of injury. These are not expensive and are often given free of charge with a large order of chairs if the customer requests it.

When choosing the hotel furniture for the bedrooms, the most welcoming look is created with real wooden framed beds and drawer units. Once again, since the recession hit, many Companies are competing hard to retain sales so the hotel owner should be looking for good discounts.

The cheapest timbers for bedroom hotel furniture are rubberwood, from Malaysia and China and Sheesham or Thakat wood from India. These are acceptable timbers for furniture use and again can be stained to colours from natural light colour through to dark Jacobean oak. Good medium priced timbers available are Ashwood, Oakwood and Birchwood, all of which can be bought from factories using ecologically sourced timber farms.

For the more exotic timbers like Mahogany, Kingwood, Rosewood and Cedar, deals are available, but the purchaser should consider the effect buying new furniture of this kind has on the remaining rainforests, as these slow growing timbers are very rarely available ecologically sourced and any claims to that effect should be treated with the greatest suspicion.

Totally Wired

A man walks down the street, waving his arms and talking to himself. No problem, he’s dictating an email. A woman sits on a park bench, stabbing at a pocket computer with a plastic stylus. Is she selling shares or checking the contents of her fridge?

A boy slumps on the bus, eyes concealed by dark glasses. He looks half asleep, but his busy studying for his college finals. Hands free computing, online fridges, glasses that double as video screens… the future is wired, but not in the way you’ve become accustomed to. Before long, you’ll be online in a dozen different ways, as and when you need to be.

You’ll connect to the appliances in your kitchen as easily as you do to computers on the other side of the world, and you’ll control them as if you were on the spot.

Wired Homes

The traditional double storey house, with two power sockets in every room and a single phone point, is due for an update. What’s interesting about the internet home is not so much the technology involved, but the fact that it isn’t a one off showcase. By the time you read this, wired homes will be the norm all over the UK and the USA.

From the outside, the internet home is just another five bedroom house. It doesn’t look that different from the inside either, unless you’re the sort of geek who goes around counting power sockets, data points, routers, PCs’, webcams, ADSL lines, and ordinary phone lines. Altogether it contains $1 000 of network gear, most of which is standard off the shelf equipment.

Future homes will have the ports, cables and switches built in. The extra wiring will add value. It’ll be a selling point when you move. If you want to make the most of your wired home, you’ll have to add the computers and other goodies. Probably you won’t do this yourself, because setting up a router isn’t as simple as plugging in a toaster. You’ll call an expert.

There will be companies that specialize. It is pretty straight forward to set it all up, and a lot of the boxes will arrive pre-configured, ready to be personalized for an individual family. Another key feature is the Hometronic Home Controller, a wireless system that controls the central heating and switches appliances on or off. It can be hooked up to the net for remote access, enabling you to log on to your house as you leave the office and turn up the heat. It isn’t on the market yet, but should be available sometime soon.

Being able to control your house from anywhere has its attractions, but you wouldn’t want some ne’er-do-well hacker switching on the lights at 3:00am, or turning on the aircon in the heart of winter. How secure is the internet home?

New for Old

You might not want to move house just to Netrify your life. However, the network infrastructure could be retrofitted to existing homes, just as people add central heating. High speed wireless networks will save you from ripping up the floor.

Why would you network your home? The benefits aren’t that great. You can play quake with your kids. Several people can share a printer and the internet connection. You can check on your new baby using a webcam. Wired homes will become the norm when companies start selling Internet-enabled appliances. Electrolux is working on a screenfridge that brings the Net into your kitchen. A web browser gives you access to online recipes, a video camera lets you record messages and a scanner keeps track of your food. When you run out of beer, it prompts you to visit an online superstore.

All these appliances could be built today, using current technology. They’d be expensive, but that’s not the sticking point. The reason they aren’t in your local furniture and hi-fi store is because there isn’t the infrastructure to support them. For the screenfridge to work, barcodes need to be replaced by radio tags that can be read from any angle. You aren’t going to pass your tub of butter over a scanner each time you put it away, so the fridge needs to be able to track it automatically. That means Electrolux has to work with supermarkets and food companies to change the way products are labeled.

Even then, how does the fridge know whether you’re putting back a nearly full tub or an empty one that need to be replaced? And supposing it decides to order a new tub, who’s going to take delivery of it and put it into the fridge? You are. Real life is full of real things that can’t be converted into ones and zeros.

Clothes, furniture… computers. If you’re going to be the brawn that moves everything around, you might as well supply some of the brains. And speaking of brainpower, wired life will involve more planning ahead. There’s no point in turning on the coffee machine from your bedroom if it doesn’t already contain water and coffee. Turning on the oven from the pub might save you a few minutes, but you won’t be able to check if it’s empty. Sure, your smart oven will sound the alarm when its contents catch fire, but you’ll end up making tea for the fire brigade instead of cooking pizza for yourself.

Wherever you Go

Once your house is totally wired, you could just stay in it and have all those real things delivered. You could even change your name to DotComGuy. More probably, you’re going to want to go out and take the internet with you.

If you’re the least bit interested in cell phones, you’ll have noticed a lot of fuss about WAP, the Wireless Access Protocol, which enables you to access the internet. It isn’t the internet as you know it. Instead, you get selected bits of selected sites, trimmed to suit tiny screens and the 9.6Kbps data transfer rate of GSM networks. (GSM, or Global System for Mobile, is the technology used by digital mobile phone networks in the UK and South Africa). More interesting services are being developed all the time and WAP will soon become full multimedia rich.

Bandwidth is now less of an issue since the inception of GPRS (General Packet Radio Service), a much faster data transfer service.

Everything, Everywhere

Ultimately, you’ll need to know whatever you need to know, no matter where you are. Remembering things will be less of an issue, because your technology will tell you where you’ve been, who you’ve seen and what you’re supposed to be doing next. Being in the right place at the right time won’t matter as much either, although there’ll still be times when your physical presence is required.

Don’t imagine that you’ll be able to give up thinking, because you’ll still have to make the hard decisions. Do you want to be a firefighter or a brain surgeon? Should you wait for him/her to call? Should we invade Iraq and Iran and get blown to pieces by suicide bombers? Will your kids end up in therapy if you make them eat all their vegetables, including the Brussels sprouts? Technology will bring you information, but it doesn’t have all the answers.