Casco Viejo is the jewel in Panama City's colonial crown.

Whenever I travel to any of Latin America’s colonial cities, I can’t help but compare them to my home, the historic Casco Viejo district of Panama City. I’ve lived here for almost five years and I love this neighborhood’s friendly, bohemian vibe and beautiful buildings.

Don’t get me wrong, I like the bright lights and amenities of the modern side of Panama City, too. But here, in the city’s “old town,” you can feel the romance and mystery of centuries past. Scarlet and pink bougainvillea drapes an oceanfront walkway… a simple church conceals an ornate golden altar… a ship’s prow swoops skywards on the corner of an old sea captain’s house….

In my search for great-value real estate for Pathfinder, IL’s preferred real estate advertising partner, I’ve visited a lot of Central and South America’s colonial gems. And it’s not just the charm and number of attractions that make these places special – it’s the value, too. Because you can have your own colonial from $115,000. Here are three of my favorite colonial towns and a taste of the properties on offer there….

Casco Viejo, Panama
The Casco is the cultural heart of Panama City. Two theaters stage opera, ballet, music concerts, and plays. You can listen to live jazz most weekends. Local businesses organize Art Bloc parties, when the streets fill with dancers, actors, and musicians, and old decaying buildings become set pieces for works of art.

It’s also one of the best locations in Panama for eating out. Restaurants and cafés line tree-shaded plazas.

The Casco’s architecture is unique in Panama. Spanish colonial homes stand alongside French and Art Deco buildings in a mix of styles that spans three centuries.

But the Casco is a work in progress. Grand, renovated houses sit next to rundown wrecks. You’ll see construction and renovation on every street, but there’s still a ways to go. Many properties are little more than shells with crumbling balconies.

When renovated, properties look like old houses—on the outside. That’s because they preserve the original façade. Inside, it’s a different story. Developers convert large houses into multiple apartments. The apartments are open plan, with modern kitchens and bathrooms. They usually have some original touches, such as tile floors and calicanto (exposed stone) walls.

Property prices have fallen by as much as 30% from their peak in 2007-2008. In the boom years, many buyers came from the U.S. and Europe. That pool of buyers has slowed to a trickle. That, in turn, has slowed the number of bigger renovation projects.

Today, propertiesin the Casco that need complete restoration start at $1,000 per square meter. Restoration costs run around $1,000 to $1,200 per square meter about $93 to $112 per square foot). But the average price for renovated properties today is $2,200 per square meter (about $204 per square foot). There’s no profit margin here restoring properties to sell on.

I wouldn’t buy in the Casco right now for investment. But it’s still a great place for a second home.

At the time of writing, properties on the market in the Casco include a renovated 108-square-meter (1,162-square-foot) apartment for $269,000. This one-bedroom, loft-style unit features granite countertops in the kitchen and antique-style tile floors. Another one-bedroom renovated apartment for $195,000, which is 119 square meters (1,280 square feet) in size, comes with exposed stone walls and an internal courtyard garden.  For more information, see here.

Granada, Nicaragua
Granada lies on the shores of a giant freshwater lake sprinkled with more than 400 islands, at the foothills of the sleeping Volcán Mombacho. Its cluster of cobblestone streets, terracotta roofs, and cathedral spires shines brightly against a backdrop of green, cloud forest, the vast expanse of Lake Nicaragua, and the summer-blue sky.

Granada is for relaxing, and you’ll easily sink into the unhurried pace of life… socializing in the plaza, fishing on the lake, or exploring the parks, nature reserves, and craft markets.

Living in the historic heart is convenient. You can buy groceries, fresh bread, fruit, and vegetables within walking distance of the Parque Central You can pay utility bills, call at the bank, or see a doctor or dentist. That’s very different to Panama City’s Casco Viejo, where you need to drive to another part of town to do any of these things.

A couple can live for $1,000 a month here. Household help, a gardener, medical care, and property taxes all cost significantly less in Nicaragua than they would for you back home.

Granada’s traditional colonial homes, with their red-tile roofs and thick adobe walls, often look deceptively small, with narrow street frontage. But if you open the front door, you’ll see that the living space stretches back a long way, wrapped around open terraces, courtyard gardens, fountains, and swimming pools.

Many houses stay in the same family for generations. When they do come on the market, they remain single family homes: You won’t find many apartments in the historic center.

Property prices are more than 50% lower than those in the Casco Viejo. The average is $1,000 per square meter ($93 per square foot) for renovated homes. Prices have fallen in recent years, as buyers from Europe and the U.S. stopped coming. Today, Granada’s historic homes represent great value for money.

Renovation costs $350 to $500 a square meter (about $33 to $46 a square foot), depending on the level of restoration and type of finishing you want.

Listings include a fixer-upper, close to the blue-washed San Francisco Convent, with an asking price of $160,000. The home sits on a 400-square-meter (4,304-square-foot) lot and the building covers 250 square meters (2,690 square feet). This is a great central location. A smaller move-in ready home with two bedrooms and two-and-a-half baths is $115,000. This property has a central courtyard garden, and both bedrooms have small balconies. For more information on properties in Granada, see here.

Cuenca, Ecuador
Cuenca is a low-cost location and an idyllic town of tumbling rivers, leafy parks, and colonial buildings. High in the Andes Mountains, 8,200 to 8,400 feet, it enjoys springtime weather all year, as opposed to Granada’s average 80 F and Panama’s warm tropical climate.

The landscape surrounding Cuenca is stunning. Purple and blue mountain peaks drop to fertile green valleys where you find rivers, lakes, waterfalls, and ancient Inca ruins.

Remember to bring your camera with you wherever you go. You’ll want to take photos in every street and plaza… the red-brick cathedral topped by brilliant-blue domes… the colorful flower market alongside the crisp white walls of an old monastery… or the impressive antique doors of colonial homes.

Each year, the city hosts around 200 cultural events. You’ll hear jazz and blues, and see art exhibitions, religious processions, and craft fairs. Many events are free and the thriving arts scene attracts young artists from all over the world.

You’ll enjoy big savings on medical care here, property taxes, eating out, and household help compared to back home. A couple can live very well for $1,800 a month. Better yet, you can get residency if you buy a property in Ecuador for $25,000 or more. That’s a big plus.

Many of the property owners in Granada and Casco Viejo hail from Europe and North America. In Cuenca most of the “foreign” owners are Ecuadorians who live overseas. They bought a third of all the properties sold in Cuenca from 2008 to 2010.

Cuenca’s colonial properties range from simple, single-story buildings to grand three- and four-story homes. You’ll find more apartments than you would in Granada, but not as many as in Casco Viejo. As in Granada, many of the largest houses are now luxury boutique hotels, finished with antique-style furniture.

Colonial properties in good condition average $800 to $1,000 per square meter ($74 to $93 per square foot). That’s a little lower than Granada and less than half of Casco Viejo’s pricing. Larger properties offer even better value. For around $250,000 you can buy 3,000- to 5,000-square-foot homes.

There’s a newly refurbished four-story colonial house that easily falls into that value category. The home has seven bedrooms, three bathrooms, an internal patio, and a rooftop sunroom with amazing city views. The living space covers 540 square meters (5,800 square feet). Yet the asking price of $265,000 translates to only $491 a square meter ($46 a square foot). For more information on Cuenca properties, see: Pathfinderinternational.net/colonial.

It’s hard to choose among these three colonial locations. They’re all unique. And I’m clearly biased: I love living in Casco Viejo. But Cuenca and Granada will give you much more for your real estate dollar. If you want a more genuine colonial feel, a lower cost of living, and affordable property prices, you should look to Cuenca or Granada.

The Best Deals Off the Beaten Track
Margaret Summerfield is the Director of Pathfinder. She scours Latin America for the hottest real estate opportunities. She’s been to places you’ve never heard of… spent hours in meetings with local contacts… and seen more projects in the region than just about anyone you’re likely to meet. To find out more about real estate in Panama, Ecuador, or Nicaragua, see here.