Good investment? Cambutal / Oceano

August 15, 2013 |

Sure, The Oceano plan is sexy and I love the idea of having a tropical retreat of my own but is it a sound investment?

There are a few things we look for in real estate investing that can help us feel better about making a commitment to a purchase.  Here we can take a look at some of the benefits to Oceano and the Cambutal region.  Looking at Oceano and Cambutal as a safe real estate investment there are several items to consider.  This post is in consideration of discovering some of the reasons why we feel good about this area.  Let’s examine a few.

 Natural Boundaries

Geographical and Geological Benefits

Resource Availability

Access

Demand and Establishment

Comparables

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Let’s start with the region and talk about Natural Boundaries.

One of the considerations of a real estate purchase is if the place you are buying has strong natural boundaries that hold growth within a certain region.  For example, San Francisco and New York are surrounded by water on almost all sides.  People want to live in those wonderful cities and those who want to be there, literally need to pay more than the next in order to be there, on those geologically isolated spaces.  These cities have some of the highest and most consistent real estate prices on the planet.  On the other hand you have a city like Phoenix, which has sprawled and continues to sprawl throughout an unobstructed region of the desert southwest.  Phoenix, because there is no containment, has some of the lowest real estate prices in the United States.

The Cambutal / Horcones region is a highly contained zone stretching 8 miles along a stretch of beach, contained by mountains from 0 to 1 kilometer to the north and extremely rugged, rocky coastline and mountains to the east and west and additionally, the Pedregal River below Oceano on the west side and of course, the Pacific Ocean to the south.  It is the longest and most consistent stretch of beach with the most surf breaks on the Panama Pacific.  There is nothing that even comes close and there is nowhere else that has a beach road running fairly consistently along the coastline, where at any stage you can park your bike or car and walk out to the pristine beach.  Additionally, because of the rugged coastline and difficult access, the challenges of living outside of the Cambutal to Horcones envelope are unattractive to all but more isolationist and survivalist type living.  The exception being Playa Venao.  That is not to say that there aren’t pockets of communities dotting the Azuero coast, but in those cases, they are often too independently developed, small and removed to garner much in terms of mass attraction.

In terms of developable coastline and accessible beach and surf, the Cambutal region is excellent.  One simple way to look at it is that you could comfortably ride your bike for the 8 mile stretch of beach visiting your friends and commerce along the way.  This zone has strong Natural Boundaries which contain an optimum growth zone which is not to big and not too small.

The zone has some specific Geographical and Geological Benefits.

Geographically we are in the south of the Azuero Peninsula which reports considerably less overcast and wet days than much of the surrounding Central American Isthmus.  Yes, we still have lots of water and a bountiful aquifer.  No, we don’t have more than several days at a time or up to a week, without seeing sunshine and the norm, even in the “wet” season is about 50/50 or better in terms of sunshine.

We are very close to Cerro Hoya National Park and on the western end are flanked by abundant old growth rainforest, to the south by abundant Pacific Ocean, to the north by abundant ranching and agriculture and to the east by various small isolated communities and resorts.

Geologically we have small coves and huge beautiful beaches.  We have the Los Buzos natural breakwater Marina where boats can comfortably moor safe and retrievable away from wave impacts.  As mentioned we have excellent surf with two prominent point breaks as the headliners.  We have bountiful freshwater aquifers, rivers and streams.  We have beautiful mountain vistas and varied terrain with mountains sloping down the beaches.

Oceano itself has pasture, community garden space, acres of private old growth rainforest preserves, trails, a beautiful shared beach hangout zone and parking below the property and is directly behind the Corto Circuito surf break and other breaks.  Our property has been described by locals as, “The most beautiful ‘finca’ in the area” and we are undoubtedly sitting above the most beautiful beach area of that 8 mile stretch.

We already mentioned some of the Resource Availability but that is not just limited to the Natural and Agricultural Resources we mentioned.  Although the Cambutal Region and town center is fairly lacking in goods and services, Tonosi is only 20 minutes up the road and has all construction, food and service basics including wonderful vegetable stands, fuel, hardware stores and 3 grocery stores.  Additionally, within 1.5 hours is Las Tablas (2 hours to Chitre) with various bigger construction stores and service providers which will make construction deliveries of several thousand pounds with commercial grade trucks for $150.  Other resources include local and sustainably harvested timber, rock and flora.  There is a North American with a substantial wood mill and heavy earth moving equipment in Cambutal and several Panamanian Owned of the same in Tonosi.

Access.  

There are old and new 4 lane highways running from Panama City to Las Tablas and newer 2 lane highways running from Las Tablas to Cambutal.  There is a regional airport in Tonosi which can accept a charter and a well equipped newer regional airport in Pedasi.  We are a good distance from Panama city but the access is good and getting better.

Real Estate Demand and Previous Establishment

Although there are no formal metrics, we’ve seen exponential increases year over year for 3 years in tourism and real estate interest from both Panamanians and foreigners.  3 years ago you could tell a Panamanian that you lived in Cambutal and they would tell you that they have never heard of it.  Now, surprisingly, it is rare that someone has not heard of it and they have often been there for at least a day.  Yes, we are remote and yes, you are somewhat of a pioneer to be considering this area.  Yes, we have a 4 star boutique hotel already called Hotel Playa Cambutal, other Eco-Retreats like Luna Negra, Boom Shiva, Eko Kambutal – the most inexpensive Hostile style hotel, restaurants, a foreign owned coffee shop, and about 15 foreigner designed for and built homes so the pioneering platform has been layed and you would be more of a 2nd generation pioneer which is much easier than being a first generation pioneer!  For over a year now we have also enjoyed having a cellular and data tower so we can communicate with the outside world!

A final factor to consider are Real Estate Comps or Comparables.

One enormous motivator is to take a trip through Costa Rica, with it’s inferior national infrastructure and take a glance at the price comparables from surf town to surf town.  After a 20 year boom the prices in Costa Rica are astronomically higher in like communities and parcels.  With all of the residency and development incentives Panama is offering, you can consider yourself to be about 15 to 25% into that longer term growth trend coming off of a hard and low bottom.  Additionally a quick run around Panama itself looking at beach real estate prices will teach you that we still in very undervalued ground with plenty of room to the upside as things develop and safety to the downside.  As long as people keep not only purchasing but building and contributing to the steady influx of amazing people who are coming to Cambutal, we’ll all be adding value and community to our comforts here.  For the adventurous, who are living active healthy lifestyles, none of those other places compare to Cambutal in terms of resources anyway, even though they already cost much more.  We are not in any kind of a real estate bubble but we are in comfortable economic times, where there is little room for backtracking and tons of room to the upside.

So there are 6 tradition items to be looking for to determine the staying power and potential of your real estate investment in Cambutal, Panama.  In our opinion, Oceano and the Cambutal Region exceed in all 6 of them.