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Investing in real estate: how not to lose money with investments



Investing in real estate not to lose money with investments

In many ways, you’re not just selling a house, you’re selling a whole town or area. Showcase the best that your area has to offer, with high-quality, beautiful photos of local town landmarks and familiar sites.

Investment method 

Raising the topic of investing in real estate, first of all, it is necessary to make an important clarification. Usually, an investment attractive asset is the one whose value has been steadily and noticeably growing over the course of several years. Accordingly, its purchase guarantees benefits by increasing the amount of capital. So, if an apartment at the time of purchase cost 7 million  and after a couple of years its price increased to 10 million , by Pakistan standards it can be quite recognized as an investment object – after all, it gave more than 70% increase in value.

However, in reality, the monetary gain is only nominal. And its purchasing power continues to decline. The ongoing crisis in the national economy, the likelihood of new sanctions and unresolved foreign policy problems create additional risks. Adjusted for devaluation, which may be more or less depending on a specific year, the real dynamics of the value of an investment property decreases to zero or even negative values.

Is it worth buying a home for investment?

Does this mean that spending money on buying apartments in Pakistan  cities is not worth it? Of course not. But it is important to understand the functionality of this deal. In most cases, investing in Pakistan real estate should be qualified not as an investment, but as an attempt to slow down and at least partially compensate for the depreciation of one’s capital. In cash, they will lose their real weight much faster. Trying to channel them into the stock markets will likely only lead to new losses. As the key rate decreases, deposits will also become unattractive. Under these conditions, maintaining a high interest in real estate acquisition looks absolutely natural. For many Pakistanis, this is an understandable and familiar scenario that allows them to retain most of the real value of their savings. However, even with a favorable set of circumstances, in a five-year perspective, the value of funds invested in apartments will decrease by one-fifth of the original face value – the consequences of the devaluation of the ruble will affect.

What should be considered?

The main factors that should be paid attention to when choosing an investment object are the prospects of the project location (which may be opened in the area in the near future), its transport accessibility, the provision of infrastructure facilities and the very characteristics of the complex (architecture, design of public spaces, landscaping of the local area, etc. etc.). And if the latter can be considered on a leftover basis, then the same proximity to the metro / public transport stops, the presence of shops, schools and kindergartens in the area will always bribe and will be in  demand. The layout of the apartment also plays an important role. “For renting, for example, the best option may be a studio, a functional one-room apartment or one- and two-room euro-format apartments with combined kitchen and living room areas,” 

Are there risks?

The main risks of buying a primary home for investment purposes are the bankruptcy of the developer, disruption of construction deadlines and long-term construction. “These risks can be minimized by carefully choosing a company and real estate object, checking title documents, and paying attention to the general contractor who works at the facility. Often the delay in construction is due to the latter’s fault. Also, do not chase cheapness. A low price or large discounts may indicate that the developer has financial difficulties,

An important point

For all the attractiveness of the apartments, they also have features that must be taken into account if you purchase such an object in order to generate income. First, we are talking about utility bills. “Due to the fact that apartments do not belong to housing, utility bills are charged on them as non-residential premises. And this is 15–20% higher than the amount of utility bills for housing, ”says. Secondly, it is worth remembering about real estate tax. The rate on hotel apartments is 5 times higher than the tax rate on housing.



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