What To Consider When Considering A Property Purchase

Buying property is rarely as simple as just running the numbers, waiting for the best opportunity and closing the deal when everything is just right. Problem is, you, and everyone else, are rarely aware of all the factors that can play into a final cost. The best thing, is to simply watch as many moving parts as possible and put together, with your real estate professional, as much of the information as possible, based on hard research.

If you are purchasing units as an investment, or to create a rental income stream, it’s often easier, but never clean cut. If you are buying a property for your personal use then it becomes a much more fluid transaction. Or, shall we just say, emotional.

More Than One Set Of Eyes IS Good

 If I see a client making what I consider a serious miscalculation, I will try to point out that maybe the property is over priced; the location of the parking space will ultimately become difficult or that there are other units, with perhaps a slightly different view, but for much less. Ultimately, it is the decision of the buyer, so after delivering the facts, I step back and let them decide. It is impossible for me to look into a crystal ball and think of everything unique to each buyer. That is always, ultimately, the buyer’s responsibility.

When purchasing property in another country, there are even more things to consider, but if I had to provide a list of things to consider for any type of property purchase, it would include the following:


  1. Why am I considering a property purchase? Know if it is going to be used mainly for personal use, as an income stream, portfolio diversity strategy, family or individual use? Is it just something exciting to do, or is this a long-term decision?
  2. Why am I considering purchasing where I am looking? Why Panama or any other country or location? Do you want the beach, rural or an urban setting? Is it possible, or important, to combine more than one type of area? Urban beach maybe.

    Having a top notch public transportation system at your disposal is often times very important when considering purchasing a property. Panama boasts a new international airport terminal, is the hub for Copa Airlines and is in the process of adding a third line to their subway system.
  3. Embrace the reality of money. I’ve had lots of clients that like the idea of buying a second or investment property, but they really have not considered the long-term budget needed to make that happen. Can you afford it as a stand alone? I tell people to slow down when they think rental income comes without risk. How many people will you be competing with for that rental dollar? Who is going to manage the rents and what will they charge? Figure how everything will ultimately play out and what is a reasonable expectation for income.
  4. Who do you want to live around? All expats, or do you want to be more “of the people”. Do you need an active lifestyle with active friends, or is the lounge chair at the pool more your style?
  5. What amenities do you absolutely need? Pools, restaurants within walking distance, good schools, a parking space, culture, social area or a gym?
  6. What about your pet? Will you need to have a pet friendly location or do you want to avoid that if possible?
  7. What kind of weather do you really like? Four seasons won’t be happening in a lot of beach locations! This investment shouldn’t be based on a couple of vacations!
  8. Will you want to travel, using this property as a home base? Consider the type of transportation in the location, including public transport and an international airport.
  9. How much monthly money can I comfortably spend beyond the mortgage? Do the math before hand and know all your expenses, plus some unexpected ones. Taxes, HOAs, general upkeep and luxuries such as a cleaning person or a gardener. What about electricity, phone and the internet?
  10. Are there things to consider that make this property more or less attractive? Are there just a few units remaining and the builder wants to close things out by offering a reduced price? Will the builder finance the balance of the property? At what rate? Is it better or worse than paying cash or getting financing elsewhere?
  11. Do your research. I will provide you with as much information as possible about properties, but I absolutely will not be able to think of everything that is important to you. I once had a client who seemed organized and well researched. She purchased what appeared to be an ideal property, but within 10 months she wanted to list her property. Ultimately, I found out she couldn’t settle on a hairdresser who could provide an adequate razor cut, so she wanted to move back to Atlanta. I absolutely did not see that one coming!

    As your advisor, I will work hard to provide you with research and numbers, but ultimately it is up to the buyer to know what is really important when deciding to purchase property.
  12. Select your partner carefully. Do the research on the builder of the property you are considering. Have they been in business a long time? Are their properties well respected? Are they part of the community and do they have an honest reputation? These are all questions to consider. This purchase will probably be long-term, so you want someone who will be there with you! Additionally, if you are buying the property with family or friends, make sure you will be comfortable with them as investment partners.
  13. If something happens, what are you plans for the property? I have had clients who have died right after purchasing a property and while that may seem morbid, it is worth considering! Your health, income you could tap if you had to, the security of your other investments are all things to consider. You are the only person who can really answer these questions!

 Of course, as your real estate advisor, I can help you with the research, provide you with a lot of numbers and uncover great deals emerging on properties, but it is always a joint effort. To make a property purchase ultimately successful, it’s going to be a joint effort.

When you are ready, I’d love it if you give me a call.

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