HOW TO INVEST IN REAL ESTATE?

It is said that “Pakistan is home to Asia’s largest real estate investors” that is the reason you find in every street of Pakistan a person who is directly or indirectly related to or interested in real estate business. Real estate is one of the rapidly growing economic sectors in Pakistan as population is growing. Most of the people who used to live in rural areas are moving towards urban areas as soon as they get awareness about the importance of education and positive impacts of living an urban life style. So this creates a great demand of developing more and more housing societies which gives a space for so many businesses to be started and grown not merely real estate business.

What is Real Estate investment & how does it work?

Real Estate investment refers to allocation of money in any property specifically in any housing society, apartments or commercial malls with intention to earn profit in returns. There are different types of investment options/approaches which investors must know before investing which are as following:

i.                    Files Purchasing

Societies at the initial phases of development offer a document to general public called file against specified size of land in the society as future plot. The files can be purchased at both, installment or full payment plan at lowest possible prices. These prices go up with the passage of time depending upon development progress and economic condition of the country which ultimately increases the returns on investment.

ü  Low Price Investment

ü  Lower to Medium Risk

ü  Can give Short-term Returns

ü  Lower to Medium Profitability

ii.                  Plot Purchasing for Resale

Plot Purchasing is one of the most common type of investment options being adopted by investors. The investor purchases a plot of any society in full payment at minimum possible price and holds it to sell back until its price increases. This is one of the most lucrative type of investments if made by a sharp thorough research of real estate in the town.

ü  Medium to High Price Investment

ü  Medium to High Risk

ü  Can give Returns in Short to Long term

ü  Low/Limited to High Profitability

iii.                Property Purchase to Rent Out

Purchasing property with intention to earn rent on monthly basis is also considered a simple and common type of investment option. The owner of the property purchases any house or shop and rent it out to get constant monthly returns. This is one of the limited type of approach but it assures the rent on fix terms which often increase the rent yearly. 
        ü  High Price Investment
        ü  Low risk (confirm rental income)
        ü  Give short-term returns
        ü  Low/Limited Profitability

iv.                Open Land Purchasing

It is one of a riskier type of investment options which few of the investors adopt. Purchasing any open land is riskier because it has no credibility. The land does not have any strong developer behind, which most of the societies do have. The investors take risk and purchase such land with expectation/view that the developer or end client may purchase the land later at higher prices.

ü  Reasonable/Medium Price Investment

ü  Medium to High Risk

ü  Give long-term returns

ü  Medium to High Profitability

What should an investor do before doing investment in real estate?

   o   Market Research

   o   Know the Developer’s Trustworthiness & Credibility

   o   Hire or get services of a fair & professional real estate expert/consultant

*KEEP VISITING THE BLOG TO KNOW MORE ABOUT REAL ESTATE INVESTMENT, ITS TACTICS & THE ONGOING INVESTMENT PROJECTS IN PAKISTAN*