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Make or Break - What Makes a Real Estate Investment Worthwhile?

30/09/2019

Make or Break - What Makes a Real Estate Investment Worthwhile?

Low profit rates have practically urged locals to move away from investing in government-backed savings schemes. To match the growing inflation rate, people need a steady growth in their income stream. For that, Pakistan real estate is considered as an investment hotspot, On the contrary, most of us believe that real estate investment can do wonders for a secure financial future. Though investing in real estate promises a stellar return yet it does not mean that with every investment asset, you can achieve the same. The secret of getting great returns lies in learning the basics of what makes a great real estate investment and following the rules while investing.

When it comes to investing in Pakistan real estate sector, experts always state to consider security prior investing. However, I believe it should not be the only consideration but you must keep several other pointers in view before deciding to invest in real estate such as:

Learn Local Pricing Trends

After making up your mind to invest in real estate, the first thing you must study is the current price trends in the areas, you are planning to consider. For instance, if you have picked up DHA, Bahria Town and Johar Town as your preferred investment areas in Lahore, you should compare these localities to see where the property prices are accelerating faster than the others. You must also see, where the average property price is more and what is the general pricing trend of that locality? It will help you realizing where the biggest demand is and which prices are fair for given properties and which properties are overpriced.

Real estate agents and authentic online property portals are the sources that can offer real insight and true information in this regard.

Pick Property Type to Start with

After selecting the area, learning the price trends and making an investment plan, real estate investment becomes risk free, to some extent. Certainly, there are numerous ways to invest in real estate but here you should devise a strategy that best fits your investment goals. For instance, first time investor should:

  • Invest in well-maintained or new homes. It is because investing your time and money to bring fixer-uppers into good condition will make it difficult for you to get handsome returns on investment, on immediate basis.
  • Avoid investing in large & expensive homes' Otherwise, it will become difficult for you to get wealthy tenants for your property, on immediate basis.
  • Invest in homes as these properties seem to be the best investment option. You can consider living in it or renting it out before you sell it on profit.


Don't Forget the Liquidity Factor

Before investing in real estate, be very sure about the liquidity concept. Previously, you might have invested in liquid financial assets, such as stocks, bonds and saving accounts but real estate is a very illiquid investment asset. Not just in Pakistan but everywhere around the world, real estate assets cannot be compared in liquidity with public traded investments such as stocks and bonds. At times, you might have to wait for months to get your cash back or profit from real estate investment.

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