A friend of mine rents a house in Las Tablas, Panama for $100 per month. The house is about 10 minutes to the nearest beach and 5 minutes to the town center.
Home sweet home in Las Tablas, Panama for $100 per month
Las Tablas, a mid-sized town near the coast of Panama’s Azuero Peninsula, has apparently been named a “top place to retire” by one promoter or another… or so I was told by a gringo real estate agent pushing pricey properties for sale in the area.
I don’t reject the idea that Las Tablas offers a decent standard of living, depending on how you define the terms “living” and “decent”. Certainly I’ve seen worse communities to call home, and Las Tablas, in terms of affordability, is hard to beat. The tap water won’t poison you and you can eat lunch for about $2.00. The nearby beaches aren’t the nicest I’ve seen, but you can generally get what you need to live a decent life without too many hassles. A small but growing expat community has started to take form, a trend I expect will continue in coming years.
It’s not a big house, granted. It’s not in a fancy neighborhood either, but it seems safe enough and the neighbors appear friendly. The house has three decent sized bedrooms, a bathroom, living room, a rather small kitchen that’s been expanded into the rear patio for extra counter space. The spacious front patio offers enough room for a dining table, chairs, and hammocks. The back yard includes fruit trees and plenty of open space. The lot size is maybe 3000 sq. ft. It’s not a McMansion, but what more do you really need? Parking is kinda tight, you have to parallel park between two palm trees.
Add high speed internet for $50/month, Cable TV for $50/month, water for $10/month and electric at maybe $50/month (if you use A/C at night). So all in, we’re up to $260/month, or about $9/day. It costs more than that to park a car in a major city in North America. I’ll foolishly blow more than $260 on a dinner for two and a bottle of wine at my favorite restaurant, and I swear I lose more than $260/month between my sofa cushions and car seats.
So when the owner told me the house was for sale, I became curious. She explained how her son will be attending university in Panama City later this year and she needs the money to fund her child’s education. She throws out the introductory price of $48,000. She figures my blond hair and blue eyes command a 50% price premium. I know this price is high, and after I physically shudder at her offer, she even admits it to be a “starting point for negotiation”. I ponder the situation as she reconfirms her rather urgent desire to sell.
Based on my limited knowledge of lower end Las Tablas residential housing, I take a guess that the house is really worth more like $35,000, and maybe only $30,000. Were I to get serious about buying this house, I’d offer her $30,000 cash, and see where it goes. If I woke up on the shrewd side of the bed, I might only offer $25,000 and see where it goes.
But the whole idea of buying this house makes me think… is this a good investment? Obviously, at $100 per month, I am better off renting than buying, and I mentioned this very thing to the owner. She explained the rent was extra low as a favor to my friend and due to his reliability as a tenant who pays on time. I agree, a rental rate of $100/month to a good tenant is better than a rental rate of $250/month for a tenant who doesn’t pay. In Panama, collecting rent from lower end tenants can be difficult, and evicting them can be a lengthy and potentially expensive legal process easily exceeding the money they owe and they know this.
I figure with some fresh paint, newer furniture, and modern era appliances, I can rent this house to a gringo for $500/month. Perhaps more if I offer short term month-to-month or even weekly rental terms. This opportunitiy exists because hotels in the area charge $30+ per night for a small room, and because houses for $100/month, if you can find one, come unfurnished with no appliances, and require a one year lease. There is in fact high demand among foreigners looking for reasonably priced rentals in Las Tablas and for most people $500 per month is reasonable, especially if it saves them shelling out a few thousand dollars for furniture and appliances.
Yet, I still ask the question, what is this house worth, and at what price would the deal become compelling to me as an investor? I know I can buy a house in Nevada or Arizona right now for $40,000 and rent it out for $600 per month, and this is in a major U.S. city where laborers’ wages range from $10 – $20 per hour. In Las Tablas, laborers’ wages range from $1.00 to $2.00 per hour. But does that matter? In Las Tablas, nicely appointed furnished rentals targeted at foreigners are in low supply; demand is high. In Nevada, 3 out of 10 houses are vacant. Which is the better buy?
Property taxes are a consideration… those might run $1000 per year for a U.S. house whereas in Las Tablas, this house probably doesn’t pay any property taxes, or if it does, they will be minimal. On a price per square foot basis, you get about twice the house in Las Vegas, NV than you do in Las Tablas, Panama. And unless you rent to a niche market – like a gringo looking for a furnished rental (a market the locals have not capitalized on or don’t know how to access) – the rent in Las Tablas is about one third what you would get per square foot in the U.S.
My conclusion? If you are a real estate investor, you have to favor U.S. properties… they offer higher yeild and more potential for appreciation. If you want to live in Las Tablas and you have a long term outlook, buying a house for $30,000 or $35,000 to call it your own isn’t a bad deal. At least you’ve locked in your housing expense (hedging against inflation or a U.S. Dollar crisis). With the prices of construction materials still on the rise in Panama, it’s unlikely little houses like the one in Las Tablas will go down, assuming you pay the right price from the beginning (ie. $48,000 is not the right price). And you can’t put a price on fresh mangos growing out your front porch, whereas in Las Vegas, you are more likely to find crack for sale on the corner next to your $40,000 house.
What are your thoughts? Submit your comments below…
P.S. As a bonus, we’ve included the contact information of the seller of the Las Tablas house to members of Retire Worldwide.
Is this house still available? I would be interested for a 2 – 3 months rental, perhaps longer.
Well said about LT. I live here. The prices you wrote about are right on…but retirees need to think twice about buying. Rent is cheap here (I pay $300 monthly for a 3 bedroom, two bath house, fully furnished). At my retirement age, if I bought it, am I just buying something the kids are going to sell a few years down the road? I elected to rent and enjoy what money I have, and the amenities from that money. Whats left after I’m gone, they can have.
Can you email me the current rental listing in Las Tablas…… gnkobe@sbcglobal.net
love to see some current rentals as I know this one has been on site for many months and obviously not available
Will Be in Las Tablas area on the 19 of July. Would really like to see some long term rentals. One request it needs to have A/C. at least 2 bedrooms.
I will be in Las Tablas in August of this year. I am interested in renting to own a home in a decent area. If you have properties to rent to own please advise and I will schedule an appt to see you when I arrive and would be interested in seeing or reading about anything you have at this time. Thank you,
Ken Odom
I would live to get a two bedroom near the beach and if its decent would be willing to pay upwaqrds of 800 a month..hopefully very close to the beach.
Let me know whats available.
I Might consider renting to owe.
I would be in favor of renting such a home. I could afford $250.00 per month. I am an American citizen, currently in the Philippines. There is no availabilty of U.S. grocery products here. No Stouffers, Marie Callendar, rye bread, Ball Park franks, Green Giant,Oyster Crackers, B & M Beans etc. Canned soups, Campbells, Progresso are rarely found and if found, expect to pay triple of the U.S. cost. The local beef tastes tainted.
Additionally, having something shipped here from the U.S. is very costly and unreliable. I have strongly considered a return to the U.S. After all, my Medicare is accepted there.
Iwill be in panama island in mwy ..i am looking for a house for long term rental ,about 6 months….if anybody know anywhere can send me an email please…i can pay 250 the maxium…thank you,.
[...] contrasting extremes also goes for housing and rentals… as an example we recently contrasted one rental in Panama for $100 per month and another for $10,000 per month, with almost the same square [...]
Would like to rent a furnished house on beach in Las Tablas. Saw one a couple of months ago for 275. I am looking for 3 months in the fall with possibility of extending lease. Thanks
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I am looking to retire and need a inexpensive furnished property to rent.
I am always looking for an inexpensive place to stay anywhere near a beach in panama. If anyone reading this has a home for rent (must be quiet and have high speed internet!) has any suggestions or knows of such a place (I have rented near the beach – nice house for less thatn $600 a month ALL BILLS PAID) please drop me a line at my e-mail address: yhvhisiam@yahoo.com
thanks
J
We are looking for a long-term rental beginning September 2011. We already live in Panama and want to move near the beach. Please contact us right away with more information. Thank you.
My husband and I intend to be in Las Tablas mid May 2012 until Mid Nov. 2012, If you have any current information on rentals could you please forward them to us . House does not have to be $100 a month but it needs to be clean and reasonable preferably with ac if needed. We would appreciate any information you might have we could employ you if you are available.
D. Hodge
Great article! Based on what you wrote, you are weighing the financial risks/gains from buying a house in Nevada or Las Tablas. I don’t know your age, so, if you are young, I can see why this would be an important factor in making your decision. You also mentioned other things to consider, such as safety and the friendliness of the people in Las Tablas. I have not been to Las Tablas yet, but I will be visiting the town and many others next month. At 61 years old, I am looking for an active, but quiet and peaceful place to live where it is safe and the people are friendly, all of which are getting hard to find in the USA. To me, these are much more important than what money can buy. My focus is on the quality of live, not how much money I have. Been there, done that. Good luck with your decision.
do you have another deal like this? I am in Panama in a few days.
By boyfriend & I want a winter vacation in Las Tablas. It would be December 2011. Could you tell me the availibility?
Yes, I would like to rent the house for $100/ month, possibley next year.
Kindly inform me of the housing availability
Thank you
Sincerely,
Emilia
[...] Would You Rent This House In Panama For $100/Month? [...]
I have been too Panama twice in the last year, both to the north of Panama around David and to Panama City. Not once did I feel threaten, or worried about my safety. Nor did I hear stories of crimes against tourists. Everyone I met was polite and courteous.
If you walk around the downtown area of Panama city you are sure to notice the presents of the police and private guards. This is a deterrent to a lot of petty crime that might otherwise take place if they were not so visible.
There are certain areas of Panama City I would not venture to go at night but that is true of any city in the world.
I live outside of Vancouver, BC. Vancouver has a much higher violent crime rate than the entirety of the country of Panama. Walk the downtown area of Vancouver and you are besieged by beggars on every block trying to raise money for their next fix. Not once in Panama City did I see a beggar bothering anyone, the very few I did see just sat with their hand out not bothering anyone.
I like Panama, the traffic cops instead of ticketing you for speeding “offer” to take a bride from you to let you off, going rate is about $10.
Australia has a strict policy with the muslims – integrate and live by Australian laws or leave the country. No ifs, ands or buts.
Australia is next door to Indonesia, a major Muslim country. If your premise is correct, it may be less safe than Costa Rica. The secret to Central America is to stay on the West Coast. Columbian traffic stays (generally) on the East coast. When the dollar does collapse, the drug trade may dry up (or at least move to which ever country becomes the economic superpower).
There’s a reason Central and South American real estate prices are low compared to North America and Continental EU. Investors want to avoid the higher political risks — many of these countries have recent unstable histories. Astute investors consider the very real question: what would likely happen to such countries should the World’s cop (the U.S.) no longer be on the beat? hmmmm….. probably a better bet to consider countries with origins rooted in democracies, particulary those geographically located far from troubled neighbors (Panama & Costa Rica are too close to Columbia drug lords for my taste). My interests lie toward New Zealand and Austrailia — not cheap, but they have all the right ingredients for ongoing stability even if the U.S. spirals downward.