Possession Rights Property In Panama: Is It A True Investment Opportunity?

[Dimitri Svolos]

It is a well known and documented fact that Panama real estate prices in the country's interior have risen significantly (and in some cases prohibitively) in the last two years or so. This is more the case for beach front properties or properties that are now in the "second stage" of development; "first stage" being the initial investor rush that bought bare land and have since then subdivided or developed housing projects.

The days of buying beach front land in Panama for cents per meter are now long gone. In the case of the Azuero peninsula (which has been my home for the last 6 years), titled beach front properties less than three hectares in surface and less than fifteen dollars per square meter are almost as rare as fishing boats in Boquette.

So the questions a lot of potential buyers of real estate in Panama asking is: "Can I still get in the Panama real estate scene and benefit (or profit)? Is there a true investment opportunity in Panama real estate? Will buying land in Panama give me a solid return on investment?" There is a growing number of property investors and experts who claim that Rights of Possession (or Derecho Posesorio in Spanish) may be the only true promising frontier in Panama real estate.

There is some reluctance and reservation regarding Possession Rights in Panama stemming of numerous horror stories of foreigners buying Possession Rights land only to find out shortly after that they could not title it or that they did not really buy nothing more than a flimsy paper from a local municipality that bares not legal (or other type) validity. Further more, the Panamanian real estate law regarding Rights of Possession is foggy at best with a lot of room for interpretation and loopholes that add more confusion and misunderstandings. Not to mention the Panamanian natural tendency of "Juega Vivo" or I-am-smarter-than-you-and-will-try-and-trick-you-in-an-way-I-can.Further more, there is the latest political "gong-show" regarding enforcement of the law regarding titling of island and coastal area (passed by the last administration in its last days in power) that is caught in a legal a quagmire and still awaits resolving.

Despite all these somewhat caution flags, I believe that, if handled properly, Possession Rights land can yield great returns because, price wise, it is still at reasonable levels and it is today a "safer" bet than it was say five years ago.

The trade-off is that one must be extremely careful and exercise thorough due diligence when it comes to buying Possession Rights land in Panama. There are still "great deals" of beach front property in Panama: Azuero, Costa Abajo in Colon, Santa Catalina and Nombre de Dios to name a few. One can still "scoop" prime, beach front properties for less than 5 dollars per meter. The only (and most important ) requirement: One must do one's homework first!

Hire a qualified, knowledgeable professional (some time it's easier aid than done in Panama). Do not trust anyone and especially Panamanians coming to you with yellowed papers from local municipalities indicating an type of land "Possession". Ask the neighbors, call the local Catastro (or PRONAT)office. In most cases the will be happy to assist you (at no charge); Remember: the are the only official voice when it comes to derecho posesorio. Be read to wait; normally Possession Rights land takes years to be titled. However, I must say that even though Possession Rights do not have the "finality feel" of title, they are well respected by law and by Panamanians.

Bottom line: If you are adventurous in your investment style or if you can afford to buy and wait, Possession Rights property in Panama may be the only remaining true real estate frontier in Panama

To learn more about rights of possession in Panama, visit how2panama.com