Since the creation of Pakistan, Karachi has always been the central hub of solid, long-term property investment. Back in the 1960s, when the city wasn’t much developed, real estate dealers and developers around the country joined their hands to make it the best country capital in the world by introducing massive construction sites across the city. Through its fast-paced construction, Karachi caught the eyes of many international and national firms to see the city as a seed, beneficial for providing stable growth to their business people.
And Karachi, with its immense potential, didn’t lack behind in any of the investor’s trust and conviction. Conversely, it provides them with such returns on their property investment that no one comprehends Karachi would ever reach such a level. Back to the topic, as we have seen that real estate in Pakistan never disappoints its investor, it’s time to ponder how we can build crazy, generational wealth and sustain it in the long term. So, without further a do, let’s dive into the topic and discuss the possibilities behind creating passive income through the means of real estate.
1st Way: Invest in Under-construction Sites
While driving, you must have found residential or commercial spaces that are under construction in the city. Such places were looking for homeowners or investors that could add some fuel to their under-construction site. The idea behind investing in such areas is that the site owners are looking for someone that can invest in their lands, and once the investments are poured in, the investors wait to let the workers complete the construction. Once the building is completed, the value of the property increases 10-12% of the initial value (at the time when creation started) and sometimes even 20-30%.
When such appreciation happens, the investors look for buyers to sell out their property to receive the amount they achieved on that 30% gain in 3 years. Normally, the investors sell their houses to people who are looking for ready-to-move homes for themselves or for their families. Now, you may have a question that is “what if they don’t sell the property and wait for further gains?” Hear this; this is important. When appreciation reaches such a stage of 20-30%, and you decide not to sell the property, then the appreciation goes down with time and returns to its original value.
Thus, you have to let the home go after two to three years of its purchase. Remember this; it’s not a golden rule that works every time. Property appreciation or depreciation may vary depending on the country’s economic conditions and the buyer-seller market. Only use this strategy if you think that property investment in Karachi is worth it. You can only know if it’s worth it or not by asking people who have been affiliated with the industry for a long time. Those people help in making a sensible and informed decision.
2nd Way: Real Estate Provides Hedge Against Inflation
This is the most relevant tip out of all four in the current scenario as of 2022. Due to the ongoing recession warning, inflation and unemployment are on the rise. But if you have invested your money in real estate, there is the best chance that you can get a strong hedge from inflation on your investment. Conversely, you could be earning benefits by keeping the property in hand through the impact of inflation.
Real estate is considered one of the few assets that can combat inflation singlehandedly. Property owners or investors can be at peace as they are protected by the inflation-resisting skill of real estate. Data from several years shows that if you have a property in times of inflation-induced economic crisis, then your property value tends to go upward, no matter what the effect inflation present on it. Aside from appreciation of real estate, if you are receiving rentals, you can ask for more of them from your tenants. These two aspects can help you earn huge in times of recession.
One thing that you should notice is don’t get involved in property construction while inflation is going upward. Because equipment prices, construction ingredients, and the cost of making the property will hike in times of economic crisis. And building the property in such time will not provide you benefits but take more bucks out of pocket than saving some during the construction. Therefore, this tip will only help you if you want to save some cash on buying or holding property rather than building from scratch.
3rd Way: Location Matters A Lot
If you have bought your dream home in a beautiful place, then you didn’t only buy a fancy house but also a piece of great yielding real estate. The house’s location has had a substantial impact on the growth of the property’s value over the years. The area in the vicinity of the bought land not only develops a sparking interest to the buyers but also serves as a brilliant vantage point for the property’s residents. Here are a few ways the value of the property can be judged using the location factor.
- The property’s value will go up if some public service transport or other government amenities are connected to your house.
- If your real estate is in the vicinity of an airport, hospital, or theme park, then its value will rise up.
- Shopping or malls also boosts the price of the house due to location factor.
We believe you shouldn’t compromise on choosing a good location for your new home or property. If you do, then you will be missing out on massive returns that could’ve been earned on an investment.
4th Way – Invest in Commercial Properties
The reason to look for commercial property investment in Karachi is that you can have two advantages if you buy them. From one end, you can use it for the provision of continuous per-month rentals, and from the other, you can sell them at a much higher price in later years. The property owners can set up a property for rentals to offices, shopping malls, or restaurants. The rentals can be huge and keep the constant influx of money.
Conclusion
Real estate is a game long-term; you have to manage your properties precisely if you want to stick with them in the long run.
