Real estate investments are considered the best kind of investment to achieve financial freedom. Buying, holding and then selling out a real estate property is one of the investment strategies that have been tried tested and proven to be highly profitable and rewarding as compared to other types of investment such as stocks or bonds. This is because a real estate investor can leverage the real estate property by holding it and then selling it off when getting the best deal.
In short, the key to success for a real estate investor is taking the right decision at the right time in order to make the most out of the investment.
Over a period of 5 to 10 years, the real estate industry of Pakistan has rapidly grown and flourished while attracting not only local but also overseas Pakistani real estate investors as well.
5 Simple Ways To Invest In Real Estate
In this article, we have highlighted a few simple ways with which you can start your real estate investments.
Investing in rental property is one of the classical ways to make real estate investments. With rental real estate investment, you can very easily establish a stable secondary source of income.
Rental investments, however, require a substantial amount of finances from purchasing the property to maintenance charges to covering up the months your rental property is vacant. Apart from this as a landlord, you would need a lot of patience to manage the tenants.
Rental investments are highly profitable as the property is being leveraged, hence maximizing the return of investment, offering a stable secondary source of income while the properties become appreciated. Moreover, many tax expenses are reduced.
Just like every other investment, rental investments have their cons as well. Becoming a landlord and managing tenants is a tedious job, facing challenges like bug issues and overflowed toilets make this a not so glamorous job, the risk of tenants potentially damaging your property and zero to none income when your property is vacant are a few cons of becoming a landlord by investing in rental property.
Real Estate Crowdfunding
Real estate crowdfunding is a process where real estate investments are done via online platforms. In real estate crowdfunding, an enterprise is able to raise funds from a larger circle of individuals.
Online real estate platforms or real estate crowdfunding is for those real estate investors who plan on investing in mega commercial or residential real estate projects. In real estate crowdfunding, you still require investment capital but comparatively a lesser amount than it would require you to invest in those mega-projects upright.
Online real estate platforms are the medium that connects real estate developers with their financers across the globe. Meaning that as a real estate investor you can diversify your portfolio geographically by either investing in a single project or multiple portfolio projects. Moreover, with real estate crowdfunding, you also get the opportunity to diversify your investment portfolio by investing huge capital amounts.
Regardless of all the benefits and conveniences, real estate crowdfunding is a significant risk. Because these investments are private investments, therefore are illiquid with longer lock-up periods. Meaning that you can not easily sell off your investment whenever you want rather you at least have to wait for five years or more. Apart from that you also have to pay a management fee as well.
Real Estate Investment Groups (REIGs)
Real estate investment groups (REIGs) are a great option for individuals who have the resources to invest in rental real estate but lack the time to manage rental property. As said earlier, real estate investment groups require huge monetary funds and easy access to finances.
Real Estate Investment Groups are small mutual funds that invest in rental property. A typical REIG works when a real estate company develops or purchases apartment buildings or condos and then the real estate investor community joins / forms the real estate investment group by investing i.e. purchasing single or multiple apartments or condos.
Whether an investor owns single or multiple units, the rental property will be managed i.e. from interviewing tenants to managing maintenance, etc. everything would be done by the real estate company that developed or bought it in the first place and for that, the real estate company would charge a small percentage from monthly rentals.
Real Estate Investment Trust (REITs)
Real Estate Investment Trust (REITs) are the best investment opportunity for amateur real estate investors who want to build a diverse investment portfolio without making traditional real estate deals.
Real Estate Investment Trusts (REITs) are formed when cooperate organizations invest the investor’s money into income properties. REITs are considered the best investment option for stock investors who wish to earn a regular monthly income.
Invest In Your Own Home
In Pakistan, owning your home is not only considered reputable but also is the best investment option. The real estate industry of Pakistan has seen rapid growth in the residential as well as commercial real estate markets.
Currently, in Islamabad’s market segment of Pakistan’s real estate industry, there are quite a few residential real estate projects that have grabbed the attention of local as well as overseas Pakistani investors.
Residential plots for sale are available in Blue World City. Blue World City Islamabad is a real estate project that is being developed by Blue Group of Companies in collaboration with Chinese investors as part of Pakistan China friendship. Located at a prime location on main Chakri road near New Islamabad International Airport.
Apart from its prime location, this project is legally approved by Rawalpindi Development Authority (RDA). Furthermore, it offers a great investment opportunity with minimum investment while earning an incredible return of investment as monetary funds.
Regardless of how real estate investors utilize their properties to create rental pay, or wait for their chance until the ideal selling opportunity emerges, it’s feasible to work out a hearty venture program by paying a moderately little piece of a property’s absolute worth forthright. What’s more likewise with any venture, there is benefit and potential in Pakistan’s real estate industry, whether the general market is up or down.
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