Investment is a fundamental element of our lives. We make various investments throughout our lives to secure our future and live a satisfied and happy life. We invest in ourselves in the form of education and learning different skills to lead a productive life. We invest on family and friends to fulfill our duties and meet emotional needs. Likewise, we invest in the real estate and insurance sectors as the former reimburses us in this life and the latter in life hereafter. In this blog, we will discuss in detail the potential of investment in real estate in Pakistan. 

Types of Real Estate Investment in Pakistan:

We have been witnessing a growing trend of investment in real estate in Pakistan for several years. There are numerous ways for investment but four of them will be discussed.

1- Buying Files:

Purchasing the files is the most profitable as well as risky way of investment. The investors purchase a file at a relatively low price. The reason is that the land of file is neither demarcated nor developed at the time of purchase. The file merely serves as a promise that in the years to come the filer will get a plot around certain area. Some people invest in files in the hope for huge returns as the prices of the plots go up manifold after demarcation.

2- Buying Property for Resale:

 Another way of investment in real estate is to buy a property which is relatively low in price because of the obsolete condition, poor location or any financial constraint. An investor can renovate the purchased-property if its poor condition was a reason for its low price. He may wait to resale the purchased property till rise in the price if there are other reasons. It is the most lucrative sort of investment but an investor may be able to earn huge profit only if he has deep insight on these matters.

3- Buying Property to Rent Out:

 Some investors prefer to own property to maintain a source of income in the shape of rent. This way, investors establish a constant income generating source and get monthly rental income. It also provides the inflation hedge to the investors as the value/rate of the property increases with the increase in inflation rate. Additionally, an investor creates a financially secure future for his family this way.

4- Buying Property by Predicting Developmental Work: 

 This is a least common type of investment in which investors purchase a piece of land in underdeveloped area predicting development in near future. The lands in underdeveloped and far-off areas can be purchased at minimum prices. An Investor apparently anticipates that the land might be purchased by any developing authority which will automatically increase its price. Currently, such investments are visible in Gwadar. 

Above- mentioned are some of the most common methods of investment in the real estate. Although, investment in real estate is a profitable but an investor needs to be mindful of some factors while, dealing with this business. An Investor must have clear goals in mind before making the investment. One must have clear idea about the investment capacity, available options, location and value of the land, intended to invest in.  An investor must check the land he or she intended to purchase is approved by relevant government to avoid future issues. It should also be ensured that the property that is purchased is not disputed. The documents can be verified from a real estate lawyer without relying on unverified portal and agents. Always prepare the documents and make sure everything is in written form whether it is tenancy agreement or eviction rules. An investor needs to be aware of the rules related to land or keeps in touch with a real estate firm of repute for consultation and guidance.

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