What Most Real Estate Investors in Panama Get Wrong About Rental Properties

By Mojmir Sokola, Vice President of Panama Home Realty

Introduction

After nearly two decades of investing in real estate, renovating properties, completing property flips, and managing rental units throughout Panama City, I have reached a conclusion that may surprise many investors.

Panama is not suffering from a shortage of investment opportunities.

In fact, I believe Panama still offers some of the most attractive residential real estate opportunities in the region.

The problem is that most investors are looking in the wrong places.

Every year, I meet buyers who focus exclusively on brand-new developments while overlooking properties with significantly greater upside potential.

At the same time, through our work in  Property Management in Panama City⁠, I see another reality that rarely gets discussed.

Panama does not have a shortage of rental apartments.

Panama has a shortage of rental apartments that people genuinely want to live in.

That distinction is incredibly important.

The Two Types of Real Estate Investors I See Every Day

Over the years, I have noticed that investors generally fall into two categories.

The Hope-Based Investor

The first group purchases property believing the investment will automatically work.

The thinking is usually simple:

• Make a small down payment.
• Obtain financing.
• Find a tenant.
• Let the rent cover the mortgage.

Unfortunately, reality is often very different.

Rental income must cover far more than a monthly mortgage payment.

Investors must also account for:

• HOA fees
• Insurance
• Maintenance
• Repairs
• Vacancy periods
• Property management costs
• Market fluctuations

Many investors eventually discover that their rental income barely covers their expenses. Some even contribute additional funds every month just to maintain ownership of the property.

When that happens, there is little capital left to improve the apartment itself.

The Strategic Investor

The second group thinks differently.

They focus on:

• Location
• Layout
• Long-term demand
• Renovation potential
• Tenant experience
• Property presentation

Most importantly, they understand that creating value often matters more than simply purchasing property.

These investors consistently achieve better results because they recognize opportunities that others overlook.

Why Independent Market Knowledge Matters

Developers have played a major role in Panama’s growth, and many outstanding projects have been delivered throughout the country.

However, every investor should remember one important principle.

A developer’s primary responsibility is selling inventory.

That is why I always encourage buyers to verify rental expectations and market assumptions through independent professionals actively involved in rentals and property management.

The reality of the rental market often looks very different from the projections presented during the sales process.

Real-world experience matters.

The Biggest Opportunity in Panama Is Often Not New Construction

One of the most common misconceptions I encounter is the belief that newer automatically means better.

In many cases, I believe the opposite is true.

Some of the most attractive opportunities in Panama City are found in properties built during the construction boom between approximately 2008 and 2012.

Many investors walk into these apartments and immediately focus on outdated finishes.

They notice:

• Older kitchens
• Older bathrooms
• Basic flooring
• Dated lighting
• Original furniture

Then they move on.

I focus on something entirely different.

I evaluate:

• Location
• Building quality
• Floor plan
• Ceiling height
• Natural light
• Balcony size
• View
• Renovation potential

Because finishes can be replaced.

Location cannot.

Furniture can be changed.

Ocean views cannot.

Lighting can be upgraded.

Prime positioning within Panama City cannot.

Avenida Balboa: A Perfect Example

Few locations illustrate this better than  Properties for Sale 

Avenida Balboa remains one of my favorite investment locations in Panama City.

Residents enjoy:

• Direct access to the Cinta Costera
• Spectacular Pacific Ocean views
• Walkability
• Easy access to Casco Viejo
• Strong rental demand
• Proximity to major business districts

Many residential towers constructed during the boom years offer exceptional fundamentals.

Large living rooms.

Wide balconies.

Spacious bedrooms.

Abundant natural light.

Front-row ocean views.

Yet many apartments remain largely unchanged from the day they were delivered.

The location is world-class.

The views are world-class.

The layouts are excellent.

But the interiors have never evolved.

For investors willing to renovate and modernize, this creates tremendous opportunity.

The Rental Market’s Hidden Problem

This is where I believe many investors misunderstand the Panama market.

They see hundreds of apartments listed for rent and assume supply exceeds demand.

That is not what I see.

Through years of property management experience, I see something very different.

There Are Plenty of Apartments

But there Are Not Enough Great Apartments.

That difference matters.

Many available units share similar characteristics:

• Outdated furniture
• Minimal upgrades
• Poor lighting
• Little attention to design
• Generic presentation

These properties eventually rent.

But they often take longer.

They frequently require price reductions.

And they attract less stable tenant profiles.

Well-Designed Apartments Perform Differently

Whenever we receive a property from an owner who understands presentation, the results are often dramatically different.

Modern furniture.

Updated lighting.

Fresh finishes.

Thoughtful design.

Professional photography.

These properties consistently generate stronger interest.

In many cases, they are rented significantly faster than competing units within the same building.

The difference is rarely the building itself.

The difference is the owner’s vision.

Renovation Is Not an Expense—It Is an Investment Strategy

One of the biggest mistakes I see is treating renovations as a cost.

Successful investors view renovations as a business strategy.

A properly executed renovation can:

• Reduce vacancy periods
• Improve tenant quality
• Increase rental value
• Improve tenant retention
• Increase resale value
• Differentiate the property from competing inventory

This is especially important in Panama City today.

There is substantial inventory available.

But there is a surprising shortage of apartments that truly stand out.

What Tenants Actually Want

Many investors evaluate properties through spreadsheets.

Tenants evaluate properties emotionally.

A tenant does not ask:

“How much did the owner spend on the renovation?”

A tenant asks:

• Does this apartment feel modern?
• Is it comfortable?
• Can I imagine living here?
• Does it feel worth the rent being requested?

That decision is often made within minutes of entering the apartment.

The most successful landlords understand this.

Looking Beyond What Exists Today

One lesson has guided many of my own investment decisions throughout the years.

The biggest mistake is evaluating a property based solely on what it is today rather than what it could become.

Some of the best investment opportunities in Panama are not perfect properties.

They are overlooked properties.

Apartments with:

• Strong locations
• Excellent layouts
• Great natural light
• Beautiful views
• Untapped potential

These opportunities still exist throughout Panama City for investors willing to think differently.

Final Thoughts

After years of investing, renovating, and managing rental properties, I remain convinced that Panama offers exceptional opportunities for disciplined investors.

However, the greatest opportunities are often hidden behind outdated finishes and overlooked details.

The investors who consistently succeed are not necessarily the ones buying the newest apartments.

They are the ones who understand how to recognize potential, create value, and deliver a product that tenants genuinely want.

Because in my experience, Panama is not suffering from a shortage of rental apartments.

It is suffering from a shortage of exceptional rental apartments.

And for investors who understand that difference, the opportunities remain enormous.

Panama Real Estate Market 2026

Panama Home Realty Blog⁠