Airbnb in Panama advantages and disadvantages
Actualizado: 26 de abr de 2020
Airbnb is the most used digital platform to get accommodation worldwide and is transforming the real estate market in Panama.
Airbnb is a company that was created in San Francisco, California by three friends who shared an apartment and for a 25% rise in the price of the rent they paid for the apartment, they had to rent one of the rooms and they offered it in a designers forum and installed an inflatable mattress (in English airbed) and more the Anglo-Saxon expression bed and breakfast (bnb) was born the name and the business. In Panama, as in the rest of the world, it is a rapidly growing platform, since its inception they had a global presence opening offices in Paris, Milan, Barcelona, Copenhagen, Moscow and Sao Paulo. This platform has come to change the classic behavior of real estate worldwide; in Panama the effects are not yet as marked, but in cities such as Barcelona and Moscow they have generated considerable increases in rental prices in the most requested areas within the platform. The most searched locations on the platform for Panama, according to the Airdna portal, which is a portal dedicated to measuring the behavior of the Airbnb portal are:
Panama City: with growth from 0 Airbnb in 2016 to more than 2000 Airbnb locations in 2019, with an occupancy as of the date of this article of 77%, with an average price of USD $ 99.95 per night.
Chiriquí: This province has always been a tourist focus and this is reflected in the offer and occupation on Airbnb, in Chiriquí it went from 0 locations in 2016 to more than 800 locations in 2019, at the date of this article the platform reflected an occupancy of 82% and an average price per night of USD $ 19.95 The business model that this platform offers is interesting and has advantages over the usual rental model, but it also has some disadvantages, I will explain the most relevant ones.
Advantages of Airbnb:
· You don't have to worry about marketing your property: We are talking about a platform with a million dollar investment in all senses, it is positioned worldwide as a lodging platform and it is present in the mind of the consumer, this scope would not be achieved in a classifieds portal. The best thing is that the platform invests in making your property known to its partners, they only win if your property is leased.
· Short Rentals: The usual model of housing leases in Panama only allows minimum rentals of 6 months, for a person who only has one property, a 6-month rental is not profitable, but on the platform you can generate money by renting only on the busiest days; For example, renting 3 weekends a month generates additional income without giving up long-term use of your property.
· Guarantee: Airbnb offers property damage insurance for USD $ 1,000,000.00, to cover any damage that a tenant causes to the property. This is an advantage over the classic long-term leasing model, because in practice I have seen properties where the tenant caused considerable damage and then it is more costly for the landlord to get the person to pay the amount of the repairs for the damage it caused .
Disadvantage of Airbnb:
· Applicable legislation: As of the date of this article, the platform is not regulated in Panama, which has happened in many parts of the world as it is something new that was not foreseen in the last reform of the leasing law dating from 1973, at that time nor There was not even the Internet.
Currently it is taken as a tourist lease which is regulated by the Panama Tourism Authority, who sanction the owner with high fines that reach USD 5,000.00, if someone denounces that the activity is carried out in an apartment. In the event that you carry out the activity in a home, you own the entire building or you lease it, there are no penalties. If you carry out the activity from Panama West to Chiriquí, the regulation changes and no fines are established. It is important to clarify that you must make a record of the activity in the Panama Tourism Authority, as long as your property is within those that can carry out the activity so as not to be subject to a sanction. The world is evolving and platforms such as Airbnb are definitely the future and legislation must change to adapt to the new times.
If you want more information about the legislation applicable to Airbnb in Panama, you can complete the following contact form:
Until next time!
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