“We have about $60,000 to invest in a piece of property,” said the young woman on the phone.
I couldn’t help but smile. This was not the first Millennial buyer I had worked with, so I knew not to be surprised by her directness– or her assets. “Together my husband and I make about $200,000 a year. Last year, we closed on our first home. We’re ready for an investment property.”
Her and her husband had no debt. She served in the military, which shouldered the cost for her Master’s degree. She became a senior project manager for the government and her husband was a successful personal trainer. “No children yet, but we’ll see. We want to be financially stable before we consider a child,” she said. “Right now, I’m not sure we could afford good child care,” she laughed and was obviously being modest.
No Longer Just Boomers!
Five years ago, most of my calls were from Baby Boomers looking to purchase retirement property. Getting to know those clients and their needs is a different process. I’ve learned to be non-intrusive, not asking about money outright but letting them guide the conversation. As an Australian, I had to learn that speaking frankly about money in North America is often considered rude.
Today, the Millennials are the largest adult generation in the U.S., with the oldest being around 38 years old in 2020. That’s to say, they’re no longer just kids. In my experience, they’re direct, ambitious, and generally more researched than any group I’ve worked with. They know where their dollars go, have less credit card debt than their predecessors, Gen X, and tend to be more open-minded about their investment options.
They’re not afraid to look beyond their own backyards when considering real estate, where they can often find lower cost-of-entry and higher or faster returns on their investment.
Why are you considering Panama,” I asked as an ice-breaker. “My husband is from Puerto Rico,” she began, “so we wanted a place sort of like PR where we’d be comfortable, but somewhere not subject to hurricanes and brutal weather. My mother-in-law is so over riding out the storms, I think, on some level, we are buying this for her. It’s also important that Spanish is the official language.”
They wanted a beach property with enough room for family and friends, and they were open to renting to offset the cost. “We recently purchased our home,” she explained, “and the big selling point was the fact there was a mother-in-law suite we could rent for about $900 a month.” I was impressed with the strategic way they approached their property investments.
Two Units for Investment
At the time, there was a new beachfront development in Gorgona– Royal Palm– that had been selling really well. The builder was motivated to sell the remaining units so they could begin on other projects.
“I’ve never had such great prices on such a desirable property,” I told the woman. I told her about the 70 square meter units that were selling for $175,000, with as little as 10% down. I explained, if she put 20% down, the owner would finance at 4%.
The building, which is a soaring two-tower amenity-filled property, had a few of the larger front-end units with wrap-around balconies still available. These units could be combined with smaller ones to create a larger floorplan, up to four bed-rooms. The interest rate on those units can be as low as 0.75%, depending on down-payment. For a young and potentially growing family, it was a great fit.
In the end, we were not able to get two side-by-side units. It’s a popular building, where buying multiple units is common. We were about to negotiate a purchase of two units on the same floor, which was close enough for her. “Maybe an extra doorway between kids and in-laws isn’t a bad thing” she joked.
When the offer went through, she was ecstatic. “I can’t believe we got two units” she almost squealed into the phone. “Less than $500 a month mortgage for the next ten years. The rental income from just a few nights a month can cover that!”
Not Just for Top Earners
There are other stories of millennials investing in Panama, and not all of them come from dual-income households or start with six-figure incomes.
How about the young man who worked in Panama as a digital marketing consultant and eventually bought an oceanfront studio in the coveted Coronado Bay building? He puts the apartment on AirBnB while traveling, usually earning enough to cover his accommodations.
Or the young woman who opened a popular vegan restaurant in Casco Viejo– the charming historic district of Panama City. She now owns not only her apartment, but a property she purchased for her next restaurant venture.
Panama is an excellent launch pad for hard-working and adventurous millennials who think outside the box. With its lower cost of entry, buzzing entrepreneurial climate, and high potential for return on investment–whether by producing rental income or increasing in property value– it makes sense that more millennials are investing in Panama.
Visiting Panama First Is Vital
Before signing on the property, I insisted– as I always do– that the young woman come to Panama and see it. We arranged for her to be picked up at the international airport, taken by helicopter to Royal Palm and provided a couple of free nights to see how it felt to actually live in the building.
We toured the building, exploring its resort-like amenities and available units. We chatted with expats who lived in the area and dined at local restaurants– everything from traditional fondas to elegant wine bars on the beach. We got stuck in traffic and discussed some of the challenges of living in Panama. We chatted about property managers who would be able to help with renting the units when she and her family weren’t enjoying the dazzling views over the Pacific Ocean.
I could hear the growing joy in her voice. “Wow, if you had ever told me I would be buying property with an ocean view before my 30th birthday, I would still be laughing.”
I smiled. “Some things just feel a little more possible in Panama.”
