I went to Central America partially just as a tourist, but also partially to see what it would be like to live and invest there. A retirement with a lower cost that Australia may well allow me to retire earlier or more comfortably.
I'll talk about Panama in this post.
I'll start by saying that I'm not fond of tropical humidity. So that makes many parts of the country of little interest to me, where that may be of interest to somebody else.
I visited four locations in Panama:
.David, a city towards the Pacific coast not far from the border with Costa Rica.
.Boquete, a town in the highlands to the north of David, about halfway to the Atlantic
.Bocas de Toro, a beach town to the north of Boquete
.Panama City
A couple of general things about Panama. The cost of living is not too bad. Unlike Costa Rica, which has a 40% tax on all imported goods, there's no tax on imports. They actively encourage retirees- it's easy to get a residency if you can prove an income, and there's all sorts of generous discounts available to residents over 60. Cars are apparently a bit more than the U.S., although the way people drive, some residents only want an older car. Petrol is about 88c per litre (US $ - I'm quoting everything in USD as it is used interchangeably with the local currency).
I only spent one night in David. There are nice areas, but as a coastal town with little of touristic value, I didn't see those. David is a shopping town for many surrounding districts - it has some big malls and good shopping. Being at low level, it does have the tropical humidity. I didn't investigate the real estate there.
Bocas del Toro (literally, Mouths of the Bull) is a small beach town with a Caribbean flavour. It's a nice little town, a bit of a party hangout for tourists. It's a good place to learn scuba diving and to go snorkelling, but the day I went out it was pouring down rain, making the water quite unsuitable for snorkelling. There were Dolphins in one area, that was really cool. But as a place to live, it is expensive. And of course the climate is humid and rainy for the wet.
Panama City is a big modern city. But there appears to be little economic value living there. Real estate can be expensive. It depends where you live of course. There's a huge amount of high rise residential in the centre, and large gated communities out of the centre a little. The climate I found oppressive. Although there's obviously air conditioning, this would add a lot to the cost of living; and apparently a shortage of power, due to low rainfall, meant that for a period last year, air conditioning was not allowed to be turned on anywhere between 11am and 3pm. Of course, as a tourist, the Panama Canal is of interest, as is Casco Viejo, an old and very interesting area which is becoming quite gentrified.
Which leaves Boquete, which does have more to offer. Being a higher altitude, the climate is quite pleasant. It does have the wet, but the temperatures are almost always in the pleasant range. In the dry, it does get very windy for three months- locals prefer the wet; many start their day early, get everything done by 3pm, and spend the hour or two of the wet back at home.
Boquete is a pleasant little town, and quite spread out, as many people with money choose places with views and a little isolation. There's a big US expat community there, retiring to take advantage of the weather.
I stayed in a house about 6km out of town, courtesy of Airbnb. It was a beautiful place. It had magnificent views- to the right was a volcano, straight ahead a tropical rainforest canyon, and to the left a view down to the plains, and sometimes, the Pacific. This place is for sale, with an initial asking price of $US250,000. The microclimate is excellent (and with the mountains around, there are a lot of microclimates. One part can have clear skies while another part may be continually overcast). The house is somewhat sheltered from the prevailing winds. There's about 200m2 of indoor living area, 3 BR, 2.5 bathrooms. There's further outdoor areas under roof, which often gets counted as the house area, but is not in this case. See http://www.viviun.com/AD-212379/
There are areas in Boquete with water supply issues.
Many people can have quite nice gardens by hiring a gardener for two days a week at $15 per day.
Quite often, when a house is sold, consideration may be given to including all furniture for an extra payment- this might even include a car.
The warning given by the owner is to rent in any place you would be considering before you buy. She and her husband decided to retire to Boquete, but her husband missed his family and friends back home. He's going back home, she's staying.
Rental yields can be reasonable. The above house could probably be rented for $1500 per month giving a gross yield of 7.2%. There's better yields available, especially with multiples - some listings had a unit or two on the same block with the main house, and the potential to build more.
See http://www.casasolution.com/listing/check-lot-size-deluxe-3bd-house-plus-2-apartments-in-volcancito/ for an example. Possibly $1500pm for the house, $500 pm for each of the units, asking $345,000, about 8.5% gross yield. That's without looking too hard.
It's hard for people to find rentals, so the vacancy rate is low.
A real estate agent will charge a fee of one month's rent for finding a tenant and preparing a lease. Property management is done by a separate company and costs extra, possibly $90pm.
People recommend buying a house through a corporation rather than as an individual. This might cost $750-$1500 to set up and the same annually.
I'll talk about Panama in this post.
I'll start by saying that I'm not fond of tropical humidity. So that makes many parts of the country of little interest to me, where that may be of interest to somebody else.
I visited four locations in Panama:
.David, a city towards the Pacific coast not far from the border with Costa Rica.
.Boquete, a town in the highlands to the north of David, about halfway to the Atlantic
.Bocas de Toro, a beach town to the north of Boquete
.Panama City
A couple of general things about Panama. The cost of living is not too bad. Unlike Costa Rica, which has a 40% tax on all imported goods, there's no tax on imports. They actively encourage retirees- it's easy to get a residency if you can prove an income, and there's all sorts of generous discounts available to residents over 60. Cars are apparently a bit more than the U.S., although the way people drive, some residents only want an older car. Petrol is about 88c per litre (US $ - I'm quoting everything in USD as it is used interchangeably with the local currency).
I only spent one night in David. There are nice areas, but as a coastal town with little of touristic value, I didn't see those. David is a shopping town for many surrounding districts - it has some big malls and good shopping. Being at low level, it does have the tropical humidity. I didn't investigate the real estate there.
Bocas del Toro (literally, Mouths of the Bull) is a small beach town with a Caribbean flavour. It's a nice little town, a bit of a party hangout for tourists. It's a good place to learn scuba diving and to go snorkelling, but the day I went out it was pouring down rain, making the water quite unsuitable for snorkelling. There were Dolphins in one area, that was really cool. But as a place to live, it is expensive. And of course the climate is humid and rainy for the wet.
Panama City is a big modern city. But there appears to be little economic value living there. Real estate can be expensive. It depends where you live of course. There's a huge amount of high rise residential in the centre, and large gated communities out of the centre a little. The climate I found oppressive. Although there's obviously air conditioning, this would add a lot to the cost of living; and apparently a shortage of power, due to low rainfall, meant that for a period last year, air conditioning was not allowed to be turned on anywhere between 11am and 3pm. Of course, as a tourist, the Panama Canal is of interest, as is Casco Viejo, an old and very interesting area which is becoming quite gentrified.
Which leaves Boquete, which does have more to offer. Being a higher altitude, the climate is quite pleasant. It does have the wet, but the temperatures are almost always in the pleasant range. In the dry, it does get very windy for three months- locals prefer the wet; many start their day early, get everything done by 3pm, and spend the hour or two of the wet back at home.
Boquete is a pleasant little town, and quite spread out, as many people with money choose places with views and a little isolation. There's a big US expat community there, retiring to take advantage of the weather.
I stayed in a house about 6km out of town, courtesy of Airbnb. It was a beautiful place. It had magnificent views- to the right was a volcano, straight ahead a tropical rainforest canyon, and to the left a view down to the plains, and sometimes, the Pacific. This place is for sale, with an initial asking price of $US250,000. The microclimate is excellent (and with the mountains around, there are a lot of microclimates. One part can have clear skies while another part may be continually overcast). The house is somewhat sheltered from the prevailing winds. There's about 200m2 of indoor living area, 3 BR, 2.5 bathrooms. There's further outdoor areas under roof, which often gets counted as the house area, but is not in this case. See http://www.viviun.com/AD-212379/
There are areas in Boquete with water supply issues.
Many people can have quite nice gardens by hiring a gardener for two days a week at $15 per day.
Quite often, when a house is sold, consideration may be given to including all furniture for an extra payment- this might even include a car.
The warning given by the owner is to rent in any place you would be considering before you buy. She and her husband decided to retire to Boquete, but her husband missed his family and friends back home. He's going back home, she's staying.
Rental yields can be reasonable. The above house could probably be rented for $1500 per month giving a gross yield of 7.2%. There's better yields available, especially with multiples - some listings had a unit or two on the same block with the main house, and the potential to build more.
See http://www.casasolution.com/listing/check-lot-size-deluxe-3bd-house-plus-2-apartments-in-volcancito/ for an example. Possibly $1500pm for the house, $500 pm for each of the units, asking $345,000, about 8.5% gross yield. That's without looking too hard.
It's hard for people to find rentals, so the vacancy rate is low.
A real estate agent will charge a fee of one month's rent for finding a tenant and preparing a lease. Property management is done by a separate company and costs extra, possibly $90pm.
People recommend buying a house through a corporation rather than as an individual. This might cost $750-$1500 to set up and the same annually.