Investing in real estate is something that people consider a long-term strategy, but the rewards for doing so can be worth it in the short term. Real estate investing in Pakistan can deliver great financial gains, as well as provide you with an opportunity to own and manage an investment property.
In this blog post, we’ll discuss how beginner investors can invest in real estate in Pakistan. We’ll also share our top types of real estate investment in Pakistan.
Why Invest in Real Estate?
Real estate is an amazing way to double your money. It can be a long-term or short-term investment opportunity. Real estate is usually a booming industry as long as you invest in the right real estate asset.
Here we have some benefits of investing in real estate in Pakistan:
- An excellent way to diversify your income.
- A wonderful way to build wealth.
- A perfect way to build self-confidence and self-esteem.
- An excellent way to create a sense of security and peace of mind.
Types of Real Estate Investment in Pakistan
Unlike many other countries, there’s still plenty of room for real estate investors to explore. In Pakistan, real estate primarily means buying a piece of land, residential or commercial property, or buying a file (a document with no actual asset behind it until a certain time).
The most common real estate types in Pakistan include:
- Investing in real estate files
- Buying plots for resale at a higher value
- Buying rental properties
- Investing in residential or commercial properties
- Buying spaces in big commercial projects
Real Estate Files
Files are not plots or actual properties. These are merely documents with certainty that the investor will be entitled to receive a plot once the allocation process begins.
Real estate companies issue these documents to generate investment and buy pieces of land they want for their society. It is unclear who came up with the idea to issue property files to generate revenue. According to some, Malik Riaz, the founder of Bahria Town, initiated this idea in Pakistan. Now, it’s a common practice for any new society to issue files and generate revenue. However, we highly suggest investors do their homework before investing in any project.
Plots for Reselling
That is one old and authentic real estate investment plan. People have been investing in lands to resell for a higher value later. Though there is less chance of fraud in this kind of investment, there have been several cases where sellers (individuals & companies) have mischievous buyers. We suggest researching before investing.
That’s, again, one more historical method of investing in real estate. It is popular everywhere and higher in demand.
When buying a rental property, ensure there are enough tenants looking to rent a property. Purchasing a rental property in an unpopulated or low-demanding area won’t help you generate income.
Investing in Residential or Commercial Properties
Real estate investment in Pakistan started overgrowing in 2020 when the government of Pakistan relieved investors, realtors, builders, and developers to boost this industry. Since then, many developers have started new projects and attracted buyers with various schemes, such as higher monthly returns than banks offer. Again, researching the project and developer is highly recommended.
Buying Rental Spaces
These rental spaces are part of more significant projects but usually last for a short period, such as a year. It also started in 2020.
The required investment in such projects can be as low as PKR 500,000/- with a monthly return of up to 4%. However, these properties don’t usually offer increments in the actual property value, i.e., when you plan to withdraw your capital amount, you will get the same base amount.
Tips to Invest in Real Estate in Pakistan
If you are getting ready to invest in real estate in Pakistan, there are a few things you need to consider. Following these tips will save you considerable time:
- Research: Learn all about the project and its developers. Ask questions like when the project is likely to be completed, who’s the leading developer, where it is located, when it started or will start, some past projects, etc.
- The market trend: Real estate market highly depends on the government’s policies. Avoid making significant steps if the regime is likely to change. Also, avoid investing in far-flung areas.
- Spread your investment: Smart investors never invest their entire savings in one asset. They spread their investment to minimize the risk.
Although Pakistan’s economy is not very good ever since it was created, real estate investment is still one of the best ways to earn extra and increase your wealth.
Feel free to contact us for more details related to real estate investment.