Pakistan real estate is witnessing a major investment shift from plots to high-rise and mid-rise buildings. Owing to urbanization and a set of other reasons, the popularity of apartments and mixed-use projects has seen a significant rise in Pakistan. Investors, depending on their budget and requirements, either opt for affordable conventional flats or buy high-end luxury apartments with top-class facilities.
While there are several types of apartments that have been popular for years, hotel apartments are considered to be a relatively new investment opportunity in the thriving real estate sector of Pakistan. It is due to this reason that buyers and investors are weighing their options before putting their hard-earned money in projects featuring luxurious commercial units.
If you’re also stuck in the residential vs. hotel apartment debate, here a quick and useful comparison between the two options that may help you reach a well-informed investment decision.
WHAT ARE HOTEL APARTMENTS?
Hotel apartments are basically fully-furnished apartments that are available for both short as well as long-term stays. Also, these commercial developments are equipped with all the facilities and amenities associated with luxury living, such as room service, housekeeping, valet parking, and much more. At the same time, they provide the guests and residents with the privacy, comfort, and convenience that is offered by residential apartments.
In other words, hotel apartments are a perfect balance between residential apartments and traditional hotels, offering the best features of both types of property. Hotel apartments are becoming increasingly popular among businessmen travelling for work as well as tourists looking for accommodation with world-class facilities. This fact has drawn the attention of local as well as overseas investors towards such contemporary projects.
The incredibly designed hotel, The Avenue, is a fine example of mixed-use projects offering outstanding facilities and amenities. The Avenue is the first 4-star Hotel in The Garden City, Bahria Town that houses state-of-the-art serviced luxury suites along with well-designed shopping complex, food court, gymnasium, rooftop swimming pool, and much more.
INVESTING IN HOTEL VS. RESIDENTIAL APARTMENTS
Here are some key factors that must be taken into consideration when deciding whether to invest in a residential apartment or hotel apartment:
- Purpose of Investment
Your preferred property type depends largely on the purpose of your investment. Do you want to buy a property for living or are you planning to use it as a mode of income generation? Do you want to keep the property for now and then resale it later for high capital gains? Usually, investors buy residential apartments either for self-accommodation or to turn it into a rental property for stable monthly income.
On the other hand, most investors view hotel apartments as a hassle-free way and affordable way to enter the commercial real estate market, as investing in this type of property allows them to earn daily rental return while maintaining ownership of the property.
- Demand in the Market
This is another important factor that influences your decision making process. While more and more people are preferring apartment living across Pakistan, buying hotel apartments is also gaining traction due to their outstanding facilities. For example, if we analyze the real estate market of Rawalpindi, the demand for commercial units in the area has increased by 94 percent in the past two years. Similarly, the demand for apartments in the city has increased by 107 percent during the same time period. This demonstrates a major shift in the preference of property investors in the region.
- Rental income & Capital Appreciation
Hotel apartments attract both short as well as long-term renters. This means it’s generally easier to find tenants for hotel apartments as compared to residential apartments. Also, commercial units usually offer higher returns through daily rental income, whereas residential apartments generate income on a monthly basis and are suitable for long-term renters.
Another important factor that must be taken into consideration in case of real estate investment is capital appreciation. In this regard, residential as well as commercial units appear to be a promising investment option for those seeking high yields in the long return.
Here we end our comprehensive comparison between residential and hotel apartments. Although investing in hotel apartments yield higher returns as compared to residential apartments, it’s entirely the preference and financial goals of the investors that impact the final decision.