I can’t lie to you…I knew better. 

But knowing better still didn’t stop me from renovating a beach house in a remote corner of Panama for use as a B&B.  Every expat seems to dream of owning a B&B near the beach.  I didn’t.  After a decade of watching investors lose their butts in the developing world, I knew the risks.  But still, I thought it would make sense to own a tourism business in Panama, given that I’ve worked in tourism for most of my adult life, have been a vocal proponent of “sustainable tourism” in Panama and also needed a project for my retired parents to tackle. 

There was indeed emotion involved.  I was missing my family after ten years abroad.  They were getting itchy to emerge from the doldrums of bridge clubs and community theatre.  It all seemed to make perfect sense.

But still…I knew better.

Building a house in a developing country simply is not easy.  There are plenty of pitfalls, some I knew about and others I had to learn the hard way.  In the end, we have our project 95% completed and should officially open our B&B for lodgers sometime in March, but I feel compelled to confess that I committed many of the Ten Deadly Sins of construction overseas.

# 1 — Thou Shalt Be On-Site
I had another project going on in Costa Rica (a separate sin altogether) and have a business to run.  Those were two of my many excuses as to why I was not able to be on top of the construction full-time.  This is THE killer of all sins.  It’s amazing all the idiotic things that can happen while ”the cat” is away.  From putting doors on backward to toilets that explode upon flushing, a novice work crew in a remote part of Panama is capable of doing a lot of harm.   Think of Dennis the Menace with no supervision.

# 2 — Thou Shalt Not Trust
Gringos seem to think that if somebody is nice, they’re trustworthy.  Latinos know better.  No matter how nice the Contractor, Builder, Gardener or whomever is involved might seem, you absolutely need to have controls on spending, receipts, quality, etc.

# 3 — Thou Shalt Purchase Materials
You absolutely need to do a good portion of the sourcing of materials yourself to guarantee good quality and good prices…and also to prevent skimming.

# 4 — Thou Shalt Employ a “Bad Cop”
Hiring an outside engineer or project consultant to check in on your contractor from time to time is essential.  There need to be some healthy checks and balances and multiple opinions.  Too many cooks may spoil the broth, but at least you’ll know that the broth will stand up in a storm.

 # 5 — Thou Shalt Build in Overruns
Projects in developing nations generally take longer and cost more money than any architect, engineer or contractor seem capable of predicting.  My general rule of thumb after two such fiascoes is to estimate 40% more money and time than they quote.  Therefore, it is absolutely CRUCIAL to have the time, money and PATIENCE to see your job through.

Would I do it again?  Sure.  But next time, I might actually take my own advice.

This post's rating:

Related Stories

Filed under: Real Estate on February 20th, 2008