Is rental property worth buying in Panama?

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Why does rental property in Panama look interesting again?

Panama rental property looks more interesting today because rents are holding up while new housing deliveries have fallen and international demand is still growing.

Panama's economy has settled back into decent growth after the disruption caused by the Cobre Panamá mine closure. The IMF currently expects real GDP growth of about 3.8% in 2026 and roughly 4% over the medium term. That is slower than Panama's old construction boom, but it is enough to keep supporting jobs, household formation and corporate rental demand.

Tourism has been stronger. The Panama Tourism Authority recorded just over 3 million international visitors in 2025, up 8.2%, while tourism receipts increased 9.7% to $6.58 billion. Visitor growth also remained strong in the first half of 2026.

Housing supply has moved in the other direction. Convivienda data compiled by Global Property Guide show about 10,600 occupancy permits in 2025 across the markets it tracks, roughly 30% fewer than in 2024 and about 40% below the 2022 peak.

That combination is healthier for landlords than the setup Panama had a few years ago. Demand is still growing, while fewer new apartments are arriving to compete for the same tenants.

Current signal	Latest evidence	Change	What it means for landlords
International visitors	3.00M in 2025	+8.2%	More accommodation demand
Tourism receipts	$6.58B	+9.7%	Visitors are spending more
Residential deliveries	10,600 units	-30%	Less new supply
IMF GDP growth forecast	3.8%	Positive	Supports local rental demand

Are Panama City rents actually high enough to make buying worthwhile?

Yes. Panama City rents are currently high enough relative to purchase prices to produce gross yields that are genuinely attractive.

Global Property Guide's latest data put the average gross rental yield in Panama City at about 7.6%. A representative two-bedroom apartment costing around $245,000 and renting for roughly $1,650 a month comes out near 8.1% gross. One-bedroom units average even higher.

PanamaProp's broader listing database is more conservative, with a national median closer to 6.8%. Its Panama City asking-price data sit around $2,200 per square metre, while median monthly rents are roughly $12.60 per square metre.

The exact percentage depends on the neighborhood and building, but both datasets point in the same direction. A realistic starting range for a decent Panama City rental is roughly 6% to 8% gross. Double-digit yields exist, but they should be treated as exceptional rather than normal.

That rent-to-price ratio is one of Panama's strongest advantages today. In many popular international property markets, investors are paying far more for assets that yield only 2% to 4% before costs.

Panama City segment	Typical purchase price	Monthly rent	Gross yield
1-bedroom	$235,000	$1,650	8.4%
2-bedroom	$245,000	$1,650	8.1%
3-bedroom	$400,000	$2,500	7.5%
4+ bedrooms	$1.05M	$5,500	6.3%
City average	—	—	7.6%

Is an 8% Panama rental yield really an 8% return?

No. An 8% gross rental yield in Panama can easily fall toward 4% to 5% once normal ownership costs are included.

Take a $245,000 two-bedroom apartment renting for $1,650 a month. The headline rental income is $19,800 a year, which gives an 8.1% gross yield.

A remotely managed apartment will usually lose around 8% to 12% of collected rent to property management. Local Panama City operators commonly quote around 9.5% to 12%.

Then comes the PH fee. Current Panama market estimates range from roughly $1.20 to $4.50 per square metre a month. For a 100 m² apartment, that can mean anything from about $120 to $450 every month.

Vacancy, repairs, insurance and property tax take another chunk out of the return. If we assume 8% vacancy, a $250 monthly PH fee, 9.5% management, a modest repairs reserve, $600 of insurance and around $1,290 of annual property tax, the property is left with roughly $10,700 before personal income tax.

That is about a 4.4% net operating yield on the purchase price.

Example: $245K apartment	Annual amount	Effect
Scheduled rent	$19,800	8.1% gross yield
Vacancy allowance	-$1,584	Lost occupancy
Management	about -$1,730	Remote ownership cost
PH fee	-$3,000	Major fixed expense
Repairs reserve	about -$910	Normal maintenance
Property tax	about -$1,290	Illustrative amount
Insurance	about -$600	Basic protection
Approx. NOI	about $10,685	4.4% net pre-tax yield

Is a 4% to 5% net yield in Panama actually good?

Yes, if the property is easy to rent and the building is solid. A 4% to 5% net yield in Panama is respectable because both the property and rental income are effectively dollar-based.

Panama uses the balboa at parity with the US dollar, and US dollars circulate throughout the economy. For a dollar-based investor, that removes the currency risk that can quietly destroy returns in other emerging markets.

A 4.5% rental yield in a country where the local currency suddenly drops 10% is a very different investment from a 4.5% yield collected in dollars.

Still, we would want more than a bare 4% from an illiquid apartment that needs management. Panama becomes much more convincing when the property starts around 7.5% to 9% gross and still leaves roughly 5% net after realistic operating costs.

Properties producing only 5% to 6% gross leave very little room for expensive PH fees, vacancy or repairs.

Does financing a Panama rental still make sense now?

Usually not for cash flow. Mortgage rates in Panama are currently high enough to wipe out much of the rental income on an average apartment.

Panama's residential mortgage reference rate moved from 5.75% in 2021-2023 to roughly 6.25% to 6.50% during 2025. The banking regulator calculated a benchmark around 6.38% before rounding in late 2025.

Using the same $245,000 apartment, a 70% mortgage means borrowing $171,500. At 6.5% over 20 years, principal and interest come to roughly $15,300 a year.

Our operating-income estimate for that apartment was only about $10,700.

That leaves the owner around $4,600 a year short before income tax.

Even financing half the purchase price uses almost all of the property's operating profit. These days, Panama works much better for cash buyers than for investors trying to maximize leverage.

Financing	Loan amount	Approx. annual debt service	Cash flow on $10,685 NOI
Cash	$0	$0	+$10,685
50% LTV	$122,500	about $10,960	about -$275
60% LTV	$147,000	about $13,150	about -$2,465
70% LTV	$171,500	about $15,340	about -$4,655

Are Panama City's most expensive neighborhoods the best rental investments?

No. Panama City's most prestigious neighborhoods often produce weaker rental yields because purchase prices rise faster than rents.

PanamaProp currently puts median asking prices around $2,760 per square metre in Costa del Este and about $2,700 in Punta Pacífica. San Francisco, El Cangrejo and Obarrio sit much closer to $2,000 per square metre.

Rents do rise in the premium districts, but not enough to fully compensate for the higher purchase price.

That is why Costa del Este and Punta Pacífica often fall closer to 6% gross, while some apartments in San Francisco, El Cangrejo, Bella Vista and Coco del Mar reach 7% to 8% or more.

The gap is especially obvious for large luxury apartments. Buyers pay heavily for sea views, prestige and bigger floor plans. Tenants pay extra too, just not at the same rate.

For a landlord focused on income, the best part of Panama City is often one step below the trophy market.

Where are Panama City's best rental yields right now?

El Cangrejo, San Francisco, Bella Vista and selected parts of Coco del Mar currently offer some of the best combinations of price, rent and tenant demand.

Global Property Guide's latest samples put Bella Vista one-bedrooms around 9.5% gross, El Cangrejo one-bedrooms near 8.5%, Coco del Mar one-bedrooms around 8.6% and San Francisco units roughly in the 7.5% range.

Those figures should not be copied directly into an investment model because building quality, furnishing and unit size can change the result a lot. The useful part is the pattern.

Smaller apartments in established central areas generally earn more rent per dollar invested than large units in ultra-premium towers.

El Cangrejo is interesting because buyers still get centrality and walkability without paying Costa del Este prices. San Francisco has a deep rental market and a large stock of apartments. Bella Vista can work very well, but the spread between good and bad buildings is wide. Coco del Mar is more expensive, although smaller units can still produce strong yields.

Area	Typical gross-yield range	Current read
Bella Vista	roughly 7%-9%+	Strong upside, very building-dependent
El Cangrejo	roughly 6.5%-8.5%	Good rent-to-price balance
San Francisco	roughly 7%-7.6%	Large, diversified rental market
Coco del Mar	roughly 7%-8.5%	Good yields on smaller units
Avenida Balboa	roughly 7%-8%	Works if PH fees stay reasonable
Punta Pacífica	often around 6%-7%	More premium than yield-focused
Costa del Este	often around 6%	Strong tenants, weaker income return

Are small Panama apartments better rental investments than big ones?

Usually, yes. Small Panama City apartments currently produce more rental income for every dollar invested.

Across Global Property Guide's latest Panama City sample, one-bedroom apartments average about 8.4% gross, two-bedrooms around 8.1%, three-bedrooms around 7.5% and four-bedroom-plus units only about 6.3%.

The decline is pretty consistent. Buyers pay a large premium for extra bedrooms, larger terraces and panoramic views, while rents rise much more slowly.

PH fees make the gap wider. In buildings where fees are charged partly by floor area, a 200 m² apartment can easily carry $400 or more in monthly building expenses.

For a rental-first strategy, a good one- or two-bedroom apartment near offices, shops, transport and restaurants will usually make more sense than a huge prestige unit.

Large apartments can still work for families, corporate tenants or people staying several years, but the advantage there is stability rather than maximum yield.

Is Panama City's old apartment oversupply problem getting better?

Yes, but Panama City still has plenty of competing apartments, so buyers cannot assume that lower construction automatically means tight supply.

Convivienda data show about 10,600 occupancy permits across tracked markets in 2025, around 40% below the 17,729 units delivered in 2022. The level was also materially below 2019.

That is a real change from the years when cranes kept adding new towers while investors were already trying to rent thousands of similar apartments.

The remaining issue is the existing stock. Panama City already has many buildings where dozens of units have almost identical layouts, views and amenities. Those owners compete directly with one another.

A citywide supply number therefore tells only part of the story. Before buying, we would look at the exact building and nearby blocks: how many comparable units are for sale, how many are for rent, how long listings stay online and whether landlords are cutting prices.

Lower construction is helping the market now, but a building full of investor-owned units can still be oversupplied even when Panama City as a whole is improving.

Is Airbnb a better investment than a long-term rental in Panama?

Usually not in Panama City. Tourism is growing quickly, but short-term rental rules make ordinary Airbnb investing much harder than the visitor numbers suggest.

Panama has historically restricted rentals shorter than 45 days in the District of Panama unless the accommodation has the required tourism authorization. The Panama Tourism Authority has also sanctioned unlicensed accommodation offered below that threshold.

That rule changes the whole investment case.

A buyer looking at rising tourist arrivals might assume that any central condo can be switched from a $1,500 monthly lease to a higher-yield nightly rental. In many Panama City buildings, that assumption is unsafe.

PH rules create another hurdle because condominium assemblies can impose restrictions on how units are rented.

Short-term management also costs much more. Long-term property managers often charge around 8% to 12%, while short-term operators can take roughly 20% to 30% once booking management, guest communication, check-ins and cleaning coordination are included.

The most interesting middle ground is often furnished medium-term rental. Stays of 45 days or more can target relocating employees, consultants, remote workers and longer-stay visitors without relying on the classic nightly-Airbnb model.

Strategy	Typical stay	Management cost	Main issue
Long-term rental	12+ months	~8%-12%	Lower upside, simpler operation
Furnished medium-term	45+ days	~10%-20%	Smaller tenant pool
Nightly Panama City rental	Under 45 days	~20%-30%	Regulatory and PH restrictions
Tourism-area rental	Variable	~20%-30%	Rules depend heavily on location

Does Panama's tourism growth still help normal landlords?

Yes. Panama's tourism growth supports long-term rentals indirectly through jobs, business travel and demand for furnished housing.

Tocumen handled about 20.9 million passengers in 2025, while roughly 2.24 million visitors entered Panama through the airport, around 10% more than the previous year.

Those travelers feed much more than hotels. Aviation, restaurants, logistics, professional services and international companies all benefit, and some of the people working around those industries need apartments.

Panama City also receives contractors, executives, consultants and employees relocating for a few months. That gives furnished 45-day-plus rentals a useful market even when the unit cannot legally operate as a normal nightly Airbnb.

The important thing is scale. Panama is not a pure resort economy, so a city apartment still needs to appeal to normal residents and expatriates when tourist growth slows.

Can foreigners safely own and rent property in Panama?

Yes. Foreigners can generally own titled property in Panama on the same basic footing as Panamanian buyers.

PROPANAMA says foreign investors and foreign companies generally have the same rights and obligations as local investors. A foreign buyer does not need Panamanian residency just to own a normal titled apartment.

Ownership is recorded through a public deed in Panama's Public Registry, which gives buyers a conventional property title.

The bigger risks sit inside the transaction rather than the buyer's nationality. We would check the registered owner, mortgages, liens, cadastral details, unpaid PH balances, building rules and any restriction affecting the intended rental strategy.

Independent legal review is especially important with resale apartments. A cheap price loses its appeal quickly if the unit comes with unresolved debts or a building dispute.

Is Panama landlord-friendly enough for a normal rental business?

Yes, for the kind of apartments foreign investors usually buy. Panama's market-rate rental rules are more flexible than the country's older tenancy law first suggests.

Law 93 of 1973 contains tenant protections that can sound restrictive when read alone. Later regulation excluded residential rents above B/.150 per month from much of that framework and left those higher-value leases largely subject to freedom of contract.

That threshold is so low that almost every investment-grade apartment in Panama City falls into the more flexible category.

The security deposit still matters, and Panamanian rental law generally provides for one month's rent under the applicable framework.

In practice, contract quality and tenant screening matter more than fears about blanket rent control. A local lawyer should draft or review the lease, especially for foreign owners who may need to enforce it remotely.

How much do Panama taxes and condo fees cut into rental returns?

A lot more than many buyers expect. Property tax and PH fees can remove several percentage points from an otherwise attractive Panama rental.

Panama's tax authority currently applies progressive property-tax rates to investment property. The first $30,000 of taxable value is exempt, followed by 0.60% from $30,001 to $250,000, 0.80% from $250,001 to $500,000 and 1.00% above $500,000.

On a taxable value of $245,000, the annual property tax is roughly $1,290 before any specific exemptions or cadastral differences.

Rental income is also Panama-source income and can be subject to Panamanian income tax. Current individual rates are 0% through $11,000 of taxable income, 15% on the portion between $11,000 and $50,000 and 25% above that, depending on the owner's structure and deductible costs.

PH fees can be even more painful. Current market estimates range from roughly $1.20 to $4.50 per square metre a month.

A 100 m² unit paying $300 monthly in PH fees loses $3,600 a year before the owner pays for vacancy, repairs, management, insurance or tax.

That is why two apartments with the same purchase price and rent can produce very different returns.

Cost	Typical effect on rental
Property tax	Often four figures annually
PH fee	Commonly $120-$450+ monthly for 100 m²
Management	Around 8%-12% of collected rent
Repairs	Needs a recurring reserve
Vacancy	Often modeled around 5%-8%
Income tax	Depends on owner and deductions

Is an older Panama apartment often a better deal than new construction?

Yes. Older Panama apartments can produce much better rental yields because the price discount is often larger than the rent discount.

Recent PanamaProp building data show apartments in central neighborhoods ranging from roughly $1,200 per square metre in older stock to more than $3,000 in newer or premium developments.

Rents rarely triple across that same range.

A $160,000 older apartment earning $1,200 a month produces a 9% gross yield. A newer $260,000 apartment earning $1,500 produces about 6.9%.

The older apartment can therefore absorb more maintenance and still leave the owner ahead.

Age alone is not an advantage, though. Panama's climate is hard on buildings. Humidity, salt exposure, façades, plumbing, elevators, waterproofing and air-conditioning systems can all create expensive problems.

The sweet spot can be a building that is old enough to trade at a discount but young and well-managed enough to avoid constant capital calls. In practice, a proven 5- to 15-year-old resale building can be more attractive than either a brand-new presale or a neglected older tower.

Is selling a Panama rental property harder than buying one?

Yes. Resale liquidity is one of the clearest weaknesses in Panama property investing.

Panama does not have a comprehensive public MLS showing every completed transaction and days on market. Asking prices are easy to find; real closing prices are much harder.

That makes it difficult to know how much negotiation actually happens behind the published listings.

Recent market estimates have put new-home inventory around several months overall, while premium and highly priced apartments can sit much longer.

Selling also comes with meaningful friction. The seller generally faces a 2% property-transfer tax. Panama's capital-gains system includes a 3% advance based on the sale value and a 10% tax on the taxable gain, subject to the applicable credit or refund process.

Broker commissions and legal costs come on top.

Those expenses make short holding periods unattractive. A Panama apartment bought for ten years of rental income can still work well. A property bought with the expectation of flipping it after one or two years needs a much stronger appreciation story.

Exit issue	Typical effect
Property transfer tax	2% paid by seller
Capital-gains advance	3% of transaction value
Capital-gains tax	10% of taxable gain
Brokerage	Often several percent
Price transparency	Limited
Premium properties	Can take longer to sell

Should a Panama rental investor expect property prices to rise quickly?

No. We would buy a Panama rental for income first and treat appreciation as a bonus.

Panama still has several things working in its favor: a dollarized economy, population growth, Tocumen's regional air hub, the Canal, logistics, financial services and rising international visitation.

But today's Panama is a much more mature property market than it was during the explosive pre-2014 construction cycle.

The IMF expects medium-term economic growth around 4%, which is healthy but lower than the pace Panama reached when construction and foreign investment were expanding extremely fast.

We therefore would not build an investment case around 8% or 10% annual property appreciation.

If a property only works because its resale price needs to rise quickly, the deal is already too fragile.

A better Panama rental starts with enough income to justify owning it even if prices move slowly for several years.

So, is rental property worth buying in Panama now?

Yes, selectively. Panama rental property is worth buying today when the apartment produces strong income before leverage and does not depend on Airbnb or fast appreciation to make the numbers work.

The best part of the market is fairly clear now. Panama City still offers gross yields around 7% to 8% in several established neighborhoods, especially on smaller units. Central areas such as El Cangrejo, San Francisco, Bella Vista and parts of Coco del Mar can still offer a good balance between purchase price and rent.

The catch is that an advertised 8% yield can fall toward 4% to 5% after vacancy, management, PH fees, maintenance, insurance and property tax. Current mortgage rates around the mid-6% range make leveraged deals much harder, and resale costs are high enough that we would avoid short holding periods.

We would want a property to start around 7.5% to 8% gross, carry reasonable PH fees and still produce roughly 5% net operating income under conservative assumptions.

That threshold rules out plenty of expensive new towers and heavily financed purchases.

For a cash buyer willing to hold for years, Panama remains one of the more convincing dollar-based rental markets in Latin America. For someone chasing a quick flip, a generic Airbnb strategy or a highly leveraged apartment, the numbers are much less attractive.

Fact-checked and reviewed by our local expert

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Shai Bar-Ziv

Founder, Panavanti

Shai Bar-Ziv is the founder of Panavanti, a boutique real-estate brokerage in Panama City specializing in investment properties: commercial plazas, office buildings, and high-yield residential in Costa del Este, the Banking District, and Casco Viejo. He works directly with foreign investors in English and Spanish, backed by a continuously updated dataset of Panama City listings with zone-level pricing.

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