I remember a dusty 600-square-meter lot in Ciudad Bolivar, Panama City, Back then, it was just a dream – a vision of turning that vacant land into a thriving rental property. Now, looking back, it feels like a whirlwind of excitement, hard work, and a whole lot of gratitude.
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| Leveled ground |
This project wouldn't have been possible without the incredible work of our construction team, led by the brilliant Jose Madrid. Jose and his team were not only skilled craftsmen but also a pleasure to work with. They were always professional, communicative, and dedicated to bringing our vision to life.
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| Cement blocks being moved around |
Building Our Dream (and Our Budget!)
Each of us partners chipped in $20,000, and with careful planning and Jose's expert guidance, we were able to build six fantastic apartments. Each unit boasts a comfortable size and rents out for a very reasonable $300 per month.
Calculating Our ROI: A Simple Approach
Now, the moment we've all been waiting for: when do we start seeing a return on our investment? Here's a simplified way to think about it:
- Monthly Rental Income: 6 apartments x $300/month = $1800/month
- Annual Rental Income: $1800/month x 12 months = $21,600/year
- Estimated Annual Expenses: This will vary depending on factors like property taxes, maintenance, and potential vacancies. Let's assume $5,000 per year for this example.
- Net Annual Income: $21,600/year - $5,000/year = $16,600/year
- ROI Calculation: ($16,600/year) / ($20,000 investment x number of partners)
- For example, if there are 3 partners: $16,600/year / ($20,000 x 3) = 0.2767 or 27.67% annual ROI.
Disclaimer: This is a simplified calculation. Actual ROI will vary based on various factors.
The Importance of Compliance
Navigating the Panama construction laws was a learning experience. Let me tell you, it's crucial to stay compliant. Not only does it ensure the safety and quality of the building, but it also protects your investment and avoids costly fines or legal issues down the line.
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| Truck dumping sand and pebbles |
A Word of Advice for Aspiring Real Estate Investors:
If you're considering a similar project, I highly recommend finding a reliable and experienced construction team like Jose Madrid and his crew. Thorough planning, a realistic budget, and strict adherence to local regulations are key to success.
This project has been a rewarding experience. We've not only created a valuable asset but also built a strong team and learned valuable lessons along the way. Here's to many more successful real estate venture