This is is a quick guide to invest in Real Estate in Pakistan for small investors who want to park their capital for growth and safety. Low risk, safe and growing investment in real estate in Pakistan is what entices many people towards this lucrative sector throughout the country.
There are 4 types of real estate investments in Pakistan, which are:
- Property files
- Investment Plots
- Rental Property
- Land Buying
When you buy a property file, you basically buy a future plot without any allocation. So it’s just on paper and you take risk of buying something which doesn’t exist at that point in time. But as soon as that file is linked to a physical plot, the value goes up dramatically. So more the risk , the more reward. But you have to be careful as only buy after thorough research and from a trusted developer.
So in this case, along with the file the plot also exists for you to inspect and its associated with the file. You know the location, size, and everything else. You buy it for future growth so location and speed of development is the key here. It’s not as lucrative as file but still a good growth asset if you buy at a proper price and at proper location.
This is probably the most common type of property in Pakistan where people buy a house to rent out , or rent out a portion of their house to someone. This could also be a shop or garage for business. Anything near business center, schools, colleges or transport is a good option. But tenant management is tough in Pakistan.
This land buying option is quite common in Pakistan as people tend to buy land in far flung places in the hope that someday government or some developer would decide to develop that location and they would get a handsome return. For example, people who bought land where today motorway is are billionaires and same goes for Bahria town and other localities.
No matter where you live, real estate or property is the biggest investment you make in your life unless you are someone like hedge fund manager or Warren Buffet. This will be the biggest purchase of your life so you need to be ultra sure about your investment, its location and its return. We all seem to know about property as it’s a tangible asset but the truth is that is hard to capitalize.
And on a related note, you can also invest in various other things in Pakistan including Gold, Stock Market,Fixed Deposits in banks, personal Investment Schemes by banks, Agriculture,
setting up startup and SMEs, art (but very limited market), setting up Co-working Space or renting a room in your house, auto leasing, and various others. The key is that you recognize your niche and then capitalize on it.