Ask any financially savvy person, and they’ll tell you that your salary and savings aren’t going to be enough to support your lifestyle in the long run. You’re going to need additional sources of income, and Pakistani Real Estate is the best option.
I bet you’re wondering what other ways you can build more wealth. I’ve got the perfect solution – investments. You need to put your money to work and watch it grow.
The only problem is that countless options exist, such as buying precious metals, stocks, bonds, mutual funds, and other valuable commodities. But one option has gained a lot of momentum in Pakistan over the past years – investing in the real estate market. If you’re having doubts about investing in Pakistani real estate, this blog is for you. Keep reading to find out why.
Reasons You Should Invest in Real Estate
You can invest in real estate for different reasons, such as financial security, income diversity, and growing capital. But I’ll give you five solid reasons why you need to consider investing in Pakistani real estate sooner rather than later.
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Reason #1: Safe Investment Option
Considering the state of law and order in Pakistan, many people are nervous about investing in gold and jewelry. On the other hand, some are just as anxious about investing in the volatile stock market.
This leaves the door wide open for real estate. Real estate is comparatively more stable than other investment options. If you do your research properly, there are fewer chances of losing your hard-earned money because property prices rarely dip.
But even if the price goes down for some reason, the key is to refrain from panic selling and hold on to your investment for a couple of years. Given time, the value of your property will eventually appreciate.
Reason #2: Easy Way to Grow Wealth
When you make investments, your goal is to facilitate your money’s growth in avenues with the least risk and the greatest return. Needless to say, investing in real estate is a much better option than letting your money sit in your bank account or buying stocks.
Over the past decade, the Pakistani real estate market has witnessed a remarkable boom. In fact, prices have risen rapidly, and analysts foresee that they will continue to rise over the coming years. Underlying factors include high population growth and rural-urban migration.
This clearly indicates the potential your money has in real estate. If you invest in land or property today, your money has a greater chance of appreciating and offering better returns than other investment options.
Reason #3: Source of Additional Income
Real estate is a popular choice for investors because it’s a tangible asset with high liquidity. That means you can purchase when the price is low and sell it effortlessly when the price spikes.
In fact, Real Estate Investment Trusts (REITs) are common in Pakistan. Like stockbrokers who invest in stocks, a REIT investor invests in various physical properties. These investment schemes allow individuals to own, manage, and sell income-generating properties.
But as the owner of a commercial or residential property, you have another option- renting. While holding onto your property for a couple of years and waiting for its value to appreciate, you can also rent it out and generate some passive income. With the recent rise in prices due to inflation, rental property owners can breathe a sigh of relief with this extra source of money.
Reason #4: Save Up for a Better Future Home
Many people in Pakistan grow up in family-owned homes. But when the next generation gets married, there just isn’t enough space or facilities to accommodate a growing family. So the next best option to move out and settle into another residential property eventually. Often, this results in settling into a rental property.
Nowadays, a new trend is emerging. Families are considering quality investment projects, like those offered by Chapal Builders, to acquire residential property in their own name instead of renting. This way they get access to a safe investment option with the convenience of accommodating the growing members in the family.
Furthermore, investing in a real estate development project encourages people to save small percentages of their monthly income. This allows them to build a more stable future for their children and circumvents the constant anxiety of ensuring enough funds to pay the rent at the end of each month.
Reason #5: Concession in Taxes
Several policy changes occurred in the real estate sector when the budget was released this year, but I won’t bore you with the legal jargon. Overall, the government is motivating more people to invest in vertical growth assets like apartments and flats.
For instance, for anyone investing in an apartment, the government will apply a 15% capital gains tax (CGT) if the holding period is less than one year. The tax is halved if the holding period exceeds one year but is less than two years. However, there is no CGT if someone keeps their property for more than two years.
Furthermore, the government stated that any income derived by REIT or a collective investment scheme is exempt from tax if it’s less than 90% of the accounting income for the year. And for people living abroad who are thinking of buying property back home, the government offers additional foreign investment incentives and tax concessions applicable only to overseas investors.
Time to Start Your Investment Journey
Making an informed investment decision requires hard work, especially if you’re looking for smart and safe ways to invest in Pakistani real estate. Whether you plan to buy land, residential, or commercial properties, make sure to do your due diligence. Research the market, find the right investment opportunity, and contact reliable real estate agents before making any down payments.
So what should you do next? You need to invest now. Starting early will help you grab real estate investment opportunities and grow your wealth sooner. However, remember the key to success lies in reinvesting income so that you can continue to increase your total investment amount.