10 reasons NOT to buy gated-community Lots in Bocas del Toro

• 1. Over-inflated Lot Prices: A few years ago some ex-pat real estate developers came to Panama and basically bought big chunks of land dirt cheap ($0.20 USD a square meter was apparently the going rate five+ years back) and figured they would make a killing by selling it all off as "luxury gated communities", selling individual Lots. However, some of these developers had no talent with real estate - they were simply greedy: they had a load of money to spend and were looking for a way to make loads more. This is where the Bocas del Toro realty problem starts, particularly with regard to the big developments: when there is no talent (or commitment other than to make loads of $$$) it means there is bad management from the start ... Now, I have personally been involved with a big realty project in Bocas del Toro which has been going on (and on) for around five years, and it is apparent that it is in trouble: it transpired (after two+ years!) they had insufficient checks on how their Project Manager ran the operation, because the wrong equipment was used for certain operations (creating huge and expensive inefficiencies [their CEO, and the replacement Project Manager, told me this]), staff were apparently insufficiently skilled (so lots of them got sacked at the end of 2008), they fell behind schedule on building (after four+ years, only one home had a roof). Despite this perilous state, they will still have to try to recoup their way-over-budget investment - How? By making lots of flashy designs, piling on the superlatives, showing all the things they "will" be putting into their "luxury, unique, paradise" development - inflating the actual value. So beware! If you listen to these people, you will get taken - and you will never make a return on your investment.
• 2. They Only Tell You The Good Stuff! They don't tell the (whole) truth about the other things on this list.
• 3. High Prices on Building Materials: Did you know that once you buy your land, your house will cost at least twice what it would cost on the Panamanian mainland! Check around - everything you will need has to be carried by truck, often from Panama City, right across the country, and then ferried over. These are HUGE extra costs. Every ton of cement, every ton of sand, every brick, piece of pipe - ferried across. And don't be conned by that realtor phrase, "we keep our prices down with economies of scale". It ALL has to be ferried over, on a small ferry ... and I've no idea where the skilled labor is going to come from ...
• 4. Crime: Notice all the bars on the windows? They are there for a reason - because if you don't watch your house all the time, someone will steal everything you have. Most ex-pats have to pay a Panamanaian they trust to actually live in their house while they are away - every time, for ever! And yes, the number of burglaries is increasing, as is the violence associated with them (Kim Crofts, a resident, was murdered recently during a burglary).
• 5. Poverty: you will be surrounded by very very poor people, with little education, and, really, little hope of altering their lot: and they will see you with all your wealth living next to them. How would you feel?
• 6. Chitras: they live in the mangroves, which are everywhere, and they bite - at dawn, at dusk, and in between times too.
• 7. Rain: rains heavily two days out of three - all year round, so get used to it.
• 8. Humidity: man, is it hot and humid on the North Panamanian coast. Get that aircon on, you'll need it - and did I mention the electricity is expensive (when it's working).
• 9. Sewage/Rubbish Dumps: get used to it - there's loads of it around Bocas. Just don't swim close to any buildings, don't drink the water, trying to not breath is good - you should be ok ...
• 10. Terrible Internet: don't listen to what the real estate developers tell you - the internet here is just awful. Really. Terrible. By far the worst I experienced in the whole of Panama ... and believe me, it isn't that good anywhere else (well, ok, it's not too bad in Panama City ... if you want to live there).

Beware! Soft ground may mean extra $$$ on building massive foundations

We recently heard of a large development by the sea on Bocas del Toro where, on just the second lot to be developed, they had come across soft ground ... and that they had then had to spend around $30,000 reinforcing the foundations to cope with this. And to cap it all, guess who had to pay all that? That's right, the customer who bought the Lot. So DO read the small print on that so-easy-sign contract.

What might it mean when house building is real slow on a new development?

Say a large multi-million dollar development has been around for a few years, maybe five, and after all that time (even though they might have sold a large number of the Lots) there's still only one or two homes being built, surrounded by vast swathes of building site. Now, ok, we all know we're in a world recession but, aside from that, what might one conclude from this? You might justifiably ask yourself: "What's going on here? ... Have they, despite spending millions, run out of cash? ... Was the project run inefficently?" - i.e., did the wrong guys (maybe some rich guys, some with no previous experience in large real estate developments) give the wrong instructions (remember, they might have no experience in running a real estate project) to the wrong people (a poorly trained labor pool), and effectively throw all that money straight down the drain? The scary thing about that latter scenario is that, if a large chunk of the money was wasted, (and millions often is), what do you think happens? No, the developer doesn't absorb the cost. What they do is to add that money onto the cost of every remaining individual lot, so they become massively expensive (we've seen Lots here on Bocas del Toro for sale at over $400,000 an acre! (approx. 4000 Sq.m) - that's $99 USD per meter, whereas $6.00 per square meter is currently (2008-2009) regarded as a fair price in many of the desirable areas of Panama [e.g., in Volcan]) ... and they'll maybe hike up the monthly management fees as well- and then they just hype their development that little bit more, so you'd end up buying even more of a pig in a poke than before.