The Panama Pied à Terre Play

Build wealth abroad without chasing bookings.

The investor sitting across from us at a Casco Viejo cafe had just closed on his third Panama City unit. Not for rental arbitrage. Not for maximum occupancy. Not for cashflow yields. In fact, cashflow did not even matter to him. He called it "smart diversification."

He buys pre-construction. Holds through delivery. Uses the unit when he wants. Rents it if he wants, but typically only for a minimum of 60 days and a maximum of 2 to 4 months a year to cover 100 percent of his carry costs. And in five years, walks away with permanent residency and 25 to 40 percent equity creation.

This conversation repeated itself across Panama City. In law offices near Balboa Avenue. At developer sales centers overlooking the Pacific. In expat-filled bars where the drinks cost half what they do in Miami.

The common theme we heard over and over from US investors is they feel overexposed to their home markets. Rising property taxes, ballooning insurance premiums, inflated HOA costs, overexposure to US T-bills or idle cash, and concentrated geographic risk have pushed affluent buyers to look outward. Not for speculation. For diversification, lifestyle, and calm.

What we found on the ground was a deliberate strategy that blends long-term appreciation with personal freedom. A modern adaptation of landvesting that requires no tenants, no operational burden, and no compromise on quality of life.

This is the pied à terre vesting strategy.

A Better Way to Own Abroad

A pied à terre is a small residence in a premier global destination purchased for personal use, seasonal living, and long-term stability. It is not a high-velocity STR cashflow play. Few of those exist these days, and most are oversold hype. This is a quiet wealth strategy that creates optionality, geographic diversification, and lifestyle value.

The model works because you buy early in the development cycle, hold through completion, and enjoy extremely low carry costs. Appreciation is driven by scarcity, quality, and long-term demand in markets where supply cannot keep pace with global capital flows.

You can rent the unit if you choose. But you do not have to. The asset still performs, and in many cases outperforms T-bills without renting a single night.

Pre-Sale Purchasing Creates Built-In Equity

The strongest operators we met in Panama do not chase yields. They chase structure.

Buying pre-construction in the right market with the right developer produces structural equity gains before the building is ever completed. This is not speculative appreciation. It is contractual pricing advantage baked into the transaction.

Typical pre-sale advantage:

• Initial pre-sale pricing runs 10 to 15 percent below delivery pricing

• Developers raise prices in predictable phases as construction progresses

• Early buyers capture this rise without lifting a finger

One attorney we spoke with called this "the laziest equity potential you will ever make." He was not wrong. You sign a contract, make scheduled down payments (typically 30 percent through construction), and pay cash, financing is limited.

Some developers we met offer non-qualifying take-out financing on delivery for up to 5 years. Think installment payments while you own, use, and/or rent. This significantly increases your ability to improve cash-on-cash returns.

In today’s U.S. market cycle, where price compression and slower appreciation are becoming the norm, geo-arbitraged international pre-sales offer one of the best opportunities for meaningful appreciation potential.

Upfront Payment Discounts Add Another Layer

Buyers who want to accelerate value creation have a second lever most people miss.

A common incentive with many developers we met is an immediate discount for larger upfront payments, often adding another 5 to 7 percent in savings. It is simply the time value of money. The more you pay upfront, the better the deal.

Developers want capital certainty during construction. In exchange for providing that certainty, they reduce your purchase price.

Combined with initial pre-sale gains, buyers who pay more upfront can achieve total pre-delivery equity creation of 15 to 20 percent before the property is handed over.

Developers also recognize the bulk buying power of STR Scout members and are often willing to extend additional member-only upfront discounts when our group brings coordinated interest.

The Panama QIV Program: One of the World's Strongest Residency Pathways

Panama's Qualified Investor Visa program has quietly become one of the most attractive residency pathways available in 2025.

Key advantages:

• Permanent residency approval in 30 to 45 days after application

• Dollarized economy with US banking integration

• Central Time Zone alignment with North America

• Tocumen International Airport with daily flights 2 to 4 hours from major US cities

• No requirement to live in Panama

• After 5 years of maintaining the investment, you can sell and keep permanent residency for life

How the QIV works:

1. Investment minimum: $300,000 in qualifying real estate.

2. Payment options: Cash directly to the developer for maximum discount, or cash held in escrow (trust) with a local attorney and released to the developer in phased construction payments.

3. The clock starts immediately: Your 5-year hold period begins when you fund the $300,000 with certified funds. It does not wait for project completion.

4. Fast approval: Residency is typically granted 30 to 45 days after application, even if the property is still under construction.

5. Annual proof required: You must provide annual documentation that the investment still exists and remains valid.

How the QIV has worked for buyers over the past few years:

• Realize 15 to 20 percent appreciation during construction

• Pick up another 3.5 percent per year on average post-delivery

• Exit the property in 5 years if you wish, maintaining permanent residency for life

This is not citizenship by investment. It is a legitimate residency framework that happens to align perfectly with long-term real estate strategy.

Multiple buyers we interviewed had zero intention of moving to Panama full-time. They wanted optionality. A Plan B. Geographic flexibility if home-country policies shifted in ways they could not control.

The QIV gives them that.

The Five-Year Model: What This Actually Looks Like

For many of the buyers we met locally, this is the long game they are executing.

When you layer pre-sale appreciation, optional developer incentives, low carry costs, and conservative market appreciation, the numbers compound quietly but powerfully.

Understanding the QIV timeline:

The 5-year investment hold requirement starts when you fund the $300,000 minimum with certified funds. This means your residency clock is already running during the construction phase.

Year 0 to Delivery (2 to 3 years)

• Pre-sale discount: 10 to 15 percent

• Optional advanced-payment incentive (direct to developer): 5 to 7 percent

• Total potential built-in equity at delivery: 15 to 20 percent

• QIV hold period: already 2 to 3 years completed

Years 1 to 5 (post-delivery)

Using conservative appreciation of 3.5 percent annually:

• Year 5 value: approximately 15 to 20 percent above delivery value

• QIV requirement: satisfied at this point if you funded at start of construction

Total effect over 5 years from funding:

• 15 to 20 percent built-in equity (or 10 to 15 percent without advance discount)

• Combined total: 25 to 40 percent depending on structure chosen

This has not been aggressive modeling. It has been a realistic, moderate, conservative framework built on decades of Panama City data with the developer track records we verified on the ground.

Compare It to a 4 Percent Treasury Bill

A 4 percent T-bill is predictable. It is also capped.

Capital stays liquid but creates no lifestyle value, no geographic diversification, and no optionality.

The comparison:

• A T-bill produces no upside beyond stated yield

• A pied à terre could theoretically produce 25 to 40 percent equity creation over 5 years

• With personal use value added, effective return on the right pied à terre could achieve double-digit returns

You do not get this blend of appreciation, optionality, and personal enjoyment from a treasury bond. You get safety. You get liquidity. But you do not get a second base in a premier international city where you can live, work, or escape whenever you choose.

Different asset classes serve different purposes. The question is not which one is better. The question is which one solves the problem you actually have when you hold liquidity and want diversification.

The Low Carry Cost Advantage

One developer we toured with in Punta Pacifica made an offhand comment that shifted our entire perspective.

"Most of my North American buyers are shocked when they see annual costs. They are used to getting crushed."

He was right.

Many international markets, including Panama, offer ownership costs dramatically below what investors pay in the US and Canada.

Typical annual carrying costs:

• HOA fees a fraction of US levels. It is mind-blowing.

• Property taxes almost laughable compared to North America

• Insurance on a $350,000 condo might be $300 a year

• Labor costs 75 percent less if ever needed

As a percentage of asset value, annual holding costs often fall in the 1.5 to 2.5 percent range. In many US coastal cities, that number exceeds 4 percent before you factor in special assessments and rising insurance premiums.

This is why the pied à terre lifestyle vesting strategy is the hottest new trend for affluent investors. Low carry costs mean you are not bleeding value while the asset appreciates. You are building equity in a stable environment with manageable overhead.

Three Ownership Strategies Fit Inside This Model

Lifestyle Land Vest

Buy. Hold. Use it freely.

No tenants. No wear and tear. No operational burden.

You capture appreciation and residency benefits while enjoying life in a premier destination. This is the purest expression of the pied à terre model.

Many pied à terre buyers actually prefer buildings that do not allow STR. Values hold stronger. Resale is easier. Quality of life is better.

Short-Term Rental (Optional)

Some investors still want the option to rent short term if they choose, so they limit their search to STR-approved projects. Panama City has steady STR demand from guests throughout the year. For these investors, STR is an option, not a requirement.

Mid-Term Rental

Buying in a project that allows mid-term rentals, with a 45-day minimum and no nightly stays, is often the preferred strategy if you want to rent for only two to three months a year and still cover your annual holding costs. It creates a true Net Zero lifestyle investment.

This model works well for corporate relocations, remote workers, snowbirds, and families in transition. It is more stable than STR, less operationally intense, and still completely optional.

The real beauty is flexibility. You decide how to use the asset based on your life rather than what the nightly rental market demands.

The Lifestyle Dividend

The financial model has strong potential. But the lifestyle model is equally valuable.

A developer we met shared something that stayed with us: “My best clients don’t overthink it. They check the carry cost once to make sure it works, choose a property with good resale potential, and buy for the life they want right now.” If life shifts, they simply adjust. They sell, reposition, and move forward.

A pied à terre gives you:

• A warm-weather escape when winter becomes unbearable

• A second base abroad with full legal standing

• Better cost of living without sacrificing quality

• Access to high-quality healthcare at a fraction of US pricing

• A place you can use spontaneously without asking permission

These are real returns that never show up in spreadsheets. They show up in how you live and in how you hedge against inflation through diversification.

The Global Property Trading Pool Bonus

Some owners take this one step further.

They place their pied à terre in global property exchange networks like HomeExchange, allowing them to trade nights with other luxury homeowners worldwide. We’re members.

For approximately $235 per year, a pied à terre becomes a global travel asset. Owners eliminate hotel costs and gain access to high-quality homes across multiple continents.

One investor we spoke with in Casco Viejo had used his Panama unit to trade stays in Paris, Barcelona, and Cape Town over the past two years. Zero hotel expense. Full kitchens. Local neighborhoods. Cool.

This is not essential to the strategy. But it is a compelling layer for those who value travel flexibility.

The Strategic Summary

The pied à terre vesting strategy in Panama blends four powerful advantages into a single framework:

1. Built-in equity creation through pre-sale pricing, with optional developer incentives for those who advance funds

2. Long-term appreciation in a prime international market with structural supply constraints

3. Permanent residency optionality through one of the world's strongest visa programs

4. Lifestyle, freedom, and global mobility without operational complexity

This is not about chasing nightly rates. It is not about maximizing occupancy or squeezing margin from every weekend.

It is about building a more flexible, diversified, and enjoyable life while owning a long-term asset in a location where quality of life exceeds cost of living.

Panama is ground zero for this strategy in 2025. The infrastructure is mature. The legal framework is established. The developer quality is exceptional. And the window is still open.

Stay tuned. Our favorite hand picked Pied à Terre Pad’s for your consideration are coming soon.

Friendly reminder: we are simply sharing what we learned on the ground in field research and asking lots of questions. This is not investment advice. Markets change and past performance never guarantees future results. Always talk with a trusted financial advisor before making big real estate decisions.