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A GUIDE TO REAL ESTATE INVESTMENT IN 2021

Real estate investment

 Were you looking for investment opportunities? Here is a guide to real estate in Pakistan in 2021.

 It is said that “The best investment on earth, is earth.”

  1. INTRODUCTION

Is the economy slowing down? Not if you keep watch on construction cranes working on multiple sites. The construction industry is in a boom. Real estate is one of the most lucrative investment ideas in Pakistan. And for all the right reasons. Unlike other investment and business opportunities in Pakistan, investing in real estate comes with multiple benefits. By analyzing multiple options, investing in real estate seems to be the best option, as discussed below in this investment guide.

 The last decade saw rapid changes in the landscape of all the major cities of Pakistan. Even in the pandemic, investment in real estate and apartment development kept booming with no signs of bust yet. According to the World Bank, nearly 60-70pc of a country’s total wealth is stored in its real estate assets. And according to Pakistan Economist, Pakistani’s spend around $5.2 billion a year on construction. 

  1. A GUIDE TO REAL ESTATE; WHAT IS REAL ESTATE?

According to the definition of Cambridge Dictionary, real estate is defined as;

“Property in the form of land or buildings that someone owns.”OR ‘Buying and selling of land are known as real estate’.

TYPES OF REAL ESTATE

Real estate can be of the following types;

  • Residential real estate
  • Commercial real estate
  • Industrial real estate
  • Land

  4.REFORMS INTRODUCED BY GOVERNMENT

The government acknowledges the importance of investing in the real estate sector and its contribution to the GDP. To make this distribution, it has initiated various steps;

The Prime Minister of Pakistan has also introduced some policies for the investors and buyers in the real estate market. For instance;

  •  Firstly, the money trail’s interrogation will be loosened for the people who are looking to invest. They will not be asked their source of income.
  • Secondly, there will be a fixed tax rate on the property that would be dependent on the size of the land. This fixed rate will prevent corruption in the sector.,
  •  Besides, he also waived off the withholding tax on the purchasing and selling land to boost the economy.
  • Above all, the Federal Government has decided to establish a REAL ESTATE REGULATORY AUTHORITY. It is expected to deliver effective and fair regulations in the country’s fragmented real estate market.
  • Finally, the State Bank of Pakistan (SBP) decided to set a mandatory target for banks to extend mortgage loans and financing for developers and builders.

 

4. KEY FACTORS TO LOOK FOR WHILE INVESTING IN REAL ESTATE

  • The type of property. (Commercial, residential or industrial)
  • Location
  • How much budget do you want to allocate to your investment?
  • For which purpose you want to buy the specific property? For house, office, or commercial purposes.
  • Be familiar with real estate laws.
  1. ADVANTAGES OF INVESTING IN REAL ESTATE
  2. LESS VOLATILE
  3. APPRECIATION
  4. TAX BENEFITS
  5. OWNERSHIP OF ASSETS
  6. EFFECT OF CPEC ON REAL ESTATE
  7. BETTER RETURNS AND PROFIT
  8. REAL ESTATE OFFERS MULTIPLE BENEFITS
  9. IMPACT OF 5G ON REAL ESTATE

Now that we have a fair understanding of real estate’s major components, let us understand why you should invest in real estate. It is a famous saying of MARK TWAIN;

BUY LAND, and THEY ARE NOT MAKING IT ANYMORE.

Therefore, after analyzing specific investment opportunities, we have listed the following benefits of investing in real estate. So, it is safe to say that real estate is the most secure and stable source of passive income.

  1. LESS VOLATILE

Real estate investments do not face abrupt changes like other investments, such as investing in stocks and shares. The real estate market is relatively stable, and the prices appreciate at a smooth and fast pace. Hence, real estate investment is the perfect option for a risk-averse person who wants to grow money at a slick and fast-moving rate.

  2. APPRECIATION

Real estate investors make money through rental income, any profits generated by property-dependent business activity, and appreciation. Real estate values tend to increase over time, and with a good investment, you can turn a profit when it’s time to sell. History continues to prove that the longer you hold onto your real estate, the more money you will make.

  3. TAX BENEFITS 

Real estate investors can take advantage of numerous tax breaks and deductions. Governments usually do this to invite more investments in the country. Deductions on mortgage interest, cash flow from investment properties, operating expenses and costs, property taxes, insurance, depreciation (even if the property gains value), and other benefits are also offered on real estate benefits.

4.OWNERSHIP OF ASSETS

One of the most essential and appealing factors in real estate is the full ownership of the asset. When you purchase a property, you get full ownership of your asset, and nobody can take it from you because you have all the legal rights to it. On the other hand, in other forms of investment such as stocks, mutual funds, and vice versa, you do not get tangible assets and ownership.

5.AFFECT OF CPEC ON REAL ESTATE

It is not a hidden reality that CPEC has turned out to be a game-changer in Pakistan’s economy and real estate. Currently, owing to the immense success of CPEC, Pakistan’s real estate sector has effectively grabbed investors’ attention from all over the world who are keen to look for an investment opportunity. Consequently, due to this trend, there has been a significant rise in real estate projects.

6.BETTER RETURNS AND PROFIT

Real estate gives you excellent and consistent returns. Over time, strategically selected real estate investments can be powerful vehicles for wealth creation—the value of your investment property increases and yields a better return. On average, you can earn up to a 20% return every month. For instance, if you purchase a piece of property for RS.500,000, you can sell it for Rs.560,000 next month, that too, without doing anything. Besides, you are earning an extra Rs.60,000 by sitting at home.

7.REAL ESTATE OFFERS MULTIPLE BENEFITS

If you have a house or a flat, you can gain multiple benefits from it. You can rent out/ lease out your house. It can be used for your residence, and when the property prices go up, you can sell it. How amazing is that?

If you are looking for an investment opportunity in Pakistan that provides multiple benefits, real estate is the perfect option for you.

8.IMPACT OF 5G ON REAL ESTATE

The roll out of the 5G mobile telecommunication network worldwide is more than just an opportunity for telephone companies and other industries. The low-tech world of brick and mortar is set to be transformed by this technology.

The fifth-generation(5G) is set to provide high-speed internet, greater than 1 Gigabit per second. 

  • USES OF 5G IN REAL ESTATE

The considerable increase in connectivity is equally significant for real estate, enabling the Internet of Things. It can monitor and control the mechanical, electrical, and electronic systems in buildings. For example, heating and cooling sensors can be used with better efficiency in an office building. Depending upon the usage, lights, and temperature can be automatically adjusted. 

This article was a comprehensive guide to real estate from us to you. We hope now you have a fair idea of how to invest in real estate. Get to know more about construction and real estate by visiting  https://landster.pk/.

 

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