The Pakistan real estate sector is one of the hottest markets of the country. The timely, beneficial, secure returns of investment make this sector a highly attractive industry for the investors. However, working in this sector is not a piece of cake. It is beyond purchasing property at a lower price and selling it at higher prices. If you want to gain generous rewards, you must know the fundamentals of real estate investing. Today we’re going to discuss how you can use your capital in the perfect way and invest in the Pakistan real estate market for best ROI.
BASICS OF REAL ESTATE INVESTMENT IN PAKISTAN
The process of sale, lease, or purchase of property with the purpose of capital gains is what basically defines real estate investment. Principally, there are numerous forms of real estate investment, but the ones more relevant to Pakistan’s real estate sector as listed below:
- Purchasing A File
A file is a document of a plot in a society that is not developed yet. This plot in a particular society has no possession or allocation for the time being. This is a favourable option if you are looking for a long term investment. Once the plot you invested in gets developed, its rates increase radically. It means that the ROI linked with your file can be very high.
- Buying Plots And Reselling Them At Higher Rates
Purchasing plots at lower rates with the purpose of selling them on better rates is one of the most popular practices of real estate investment in Pakistan. In this type of investment, investors purchase plots and keep them in their assets until their prices go up. The increase in their prices is subjected to the time as well as the development of the project involved. This investment technique usually gives handsome returns and can be very lucrative.
- Buying Property To Rent Out
Purchasing a house, apartment or commercial property and then renting it out for generating income is also a common type of real estate investment. Once you have invested in such a property, all you have to do is sit back and receive the fixed monthly income while your property value increases in value with every passing day.
- Purchasing Undeveloped Land
This type of investment is relatively riskier and a less popular type of real estate investment. In this type, you have to make a daring decision by buying a property that has not been developed yet. Mostly, investors with a great long-sightedness of the sector opt for this investment technique.
PROS & CONS OF REAL ESTATE INVESTMENT
As we discussed before, real estate investment is not everyone’s piece of cake. The real estate investment comes with both advantages as well as disadvantages. You should put both aspects into your consideration before making any investment decision.
- Ownership of a strong and solid asset.
- Chances of generous returns in a short period of time.
- A fixed source of income, in case of renting out.
- A solid asset to pass over to your future generations.
- Can be used in future for personal use.
- The fluctuation in the market may not drive the prices up as you may expect.
- You’ll be entitled to pay property taxes.
- This asset cannot be liquidated urgently.
- Legal complexities or fraudulent practices may occur.
FROM WHERE TO START?
As a newbie in the real estate market, you may not have proper knowledge of how things work here. But you don’t have to worry. We’ll guide you about the important steps that must be considered for any successful real estate investment. Once you understand them completely, you will be on the right track in the real estate terrain.
- You Must Be Clear About Your Expectations And Requirements
The very first step is to be fully aware of your expectations from the investment. you need to think in detail about why you are making an investment and what do you want to achieve against it. We would recommend you to first decide your holding power before making an investment. Your holding power indicates the amount of time you’re capable of holding your property before you put it up for sale. Moreover, you must be very clear about your budget, so that you can carry out your market research accordingly.
- You Should Conduct Thorough Market Research
Once you’re clear about your requirements, the next step is to conduct market research. Check out the available properties that suit your needs. Get in touch with experts in this regard. Also, always remember to check that the property you are interested in buying has all regulatory approvals. Consulting the well-reputed real estate agents in your area can also prove to be very helpful during your research process.
- Invest In The Chosen Property
After your research is done and you have narrowed down your options, it is time to go for the next big step i.e. purchasing the property. This is the time when you need to keep the legal complexities in mind and obtain the transfer & sales deeds verified by a lawyer.
You need to make sure that you get all relevant approvals to avoid any legal issues in future. If you want to free yourself from this hassle, you can consult a well-reputed real estate investment company to get the work done for you.
- Reconfirm The Transfer/Allotment Documents
Make sure to verify the allotment/transfer documents. To do so, you’ll have to visit the authority’s or society’s office in which you’re purchasing the property. This will help you verify the current condition of the property you are interested in purchasing. However, in case of selling the property, you have to ensure that the transfer letter is issued to the purchaser in this name.