ASK LISA MAY: Home & Land Ownership vs Home with Land Rental in Panama

Good morning Lisa May,

I watched with great interest the video with the couple in Mexico and while the video was very well done. The people stated that they paid a small sum ($140k+/-) for their unit [3br, 2ba, 2 floor, 3600 sq. foot, cliff side beach home]. There are so many that find this sum impossible to reach. My condos are available to most everyone at $79k with monthly condo fees of only $125. What I am seeing now is a lesser interest in buying and more interest in renting.

With this in mind, I have now designed an even less costly mobile unit of 576 sq. ft in Panama for less than a $1500 sale. The land upon which the unit sits is rented from me with a minimum term of 3 years and is currently only $175 per month including land taxes, grounds maintenance, security and the use of the public areas and more. The contract will allow using the unit as a rental. Land rental was common before the 1900's allowing regular people to get a place at a more affordable cost. This changed starting in the mid 60's up till today. People have been, for lack of better words, brainwashed into believing they need "ownership". 

QUESTION: How do I offer this great deal at a great price all the while having the people feel comfortable? You have chatted with so many people and actually work in the area of the "retiree movement" that I am hoping you can shed some light.


Perfect Panama Condos

Dear Perfect Panama Condos,

Your information sounds good but I'm always leery about land rentals. Focusing on the logic, yes, it’s cheaper to lease land with home ownership. The laws change, however, when one moves from the area that they know. The culture changes. Your summarized history of lease rental is interesting, however this information comes from you, the land owner. History also shows poor people being taken advantage of since the world began and continues on now as an epidemic. That is no brainwash. 

For example, their have been instances in Belize where new comers are sold homes only to find out, after their renovations, that the land belongs to someone else and that someone else takes all leaving the home owners with no home and no savings. The U.S. is about to blow another financial bubble most likely right after these horrendous elections leaving people scared and desperate. Your potential clients need to trust that they have a sure thing. Don’t get me wrong, I think what you have here is a good idea worth fleshing out. What your potential clients need is peace of mind in knowledge that they can acquire themselves from accredited sources. 

I’ve gotten lots of feedback in Mexico, Guatemala and Belize that Panama has gotten too expensive for low income expat living. I agree. What I found surprising is that expats in Belize left to live in Panama for less and came back to Belize broke. That says a lot because Belize is a pretty pricey place to live as well. So with this growing sense among expats or those considering leaving the country, your arrangement is welcoming but seems a little too good to be true. It’s an idea that has not been tested.

Many of my expat friends in Mexico own homes and think nothing of land rental, feeling very secure. There are others, however, who own mobile homes with land rental but are terrified to renovate or AirBnb/rent out their homes for fear of land rental hikes or changes in rental policy feeling forced to leave, unable to afford moving the home. I even have a friend who refuses to buy in Washington, D.C. because it’s land rental only. 

A good way to address your marketing here is to document your proper due diligence and apply your concepts to the current global economic situation. People are legitimately scared to lose all of their money. Resolve their fears by backing up with your credentials (why they should trust you), Panamanian legislation and real estate law. Offering knowledge on good bi-lingual real estate lawyers used in the Panamanian expat communities might be a good start.

Food for thought.



Lisa May

Founder & Host of Expat Real