The first thing that comes in your mind is home whenever you think about investing in real estate. Moreover, buyers or seller have plenty of options when it comes to investment purpose in the market. Although, real estate has become a famous investment tool for builders and developers over the last 3-4 decades and around 2.5B dollars has spent by Pakistan on construction each year.
Why investors take interest in real estate?
Are you aware of it? If no, then you are exactly where you are supposed to be as this article is all about answering your queries.
In Pakistan, real estate is one of the profit-making ideas for investment with uncountable benefits, and also it provides a bundle of opportunities unlike other businesses in Pakistan.
Important factors for investing in real estate
Before knowing a method of investing money, you are required to look up for main factors that might help you to determine as if the investment is right for you or not. Here’s a look of some really important factors to invest in real estate market.
The real estate investment analysis, financing during the time of purchase, premium insurance, taxes and listing price are all depend upon the valuation of property. Some common valuation methods include cost approach; involves the price of construction and land as well as minus depreciation. Sales approach; Properties of similar characteristics with comparable sales with both old and new properties. Income approach; involves cash inflows.
The most important factor is to find a property near perfect location as per your demands. It is necessary to search for a place where schools, markets, and transport hubs are nearer to your house’s location in commercial area. And search of neighborhood, space and greenery in residential area. In fact, location is the second biggest factor to look up in a real estate market.
Expected profit and cash flow:
If you want to gain good return on an investment property then positive cash flow works here. You are probably thinking about what to look for? So keep reading, to vanish your confusion.
Here we discuss about expenses and profits while investing on a property; flow of cash can be expected from a rental income, increment can be expected in internal value due to long lasting prices, profits of depreciation (tax profits), benefits of renovation before selling a house, and as well as mortgage loans.
Existing vs. Newly constructed property:
Apparently, there comes a difference between newly constructed and old properties as new have always something attractive to show with prices as well, current trending designs and but risks of increased cost and unknown or newly developed neighborhood. Besides, old properties provide convenience and rapid access with lower price in some cases. It is better to consult with your real estate agent about both properties so that can become easier for you to select.
Basic necessities for real estate investment
Enlisting some basic requirements before reaching out to buy or invest on a property.
Search rental property in growing neighborhoods:
The best way to get involved in real estate investment is represented by rental properties, though tax incentives for buyers might be offered by emerging neighborhoods so obviously buyers who would wish to buy property in growing neighborhood can be profited.
Knowledge about investing in real estate:
Do you want to waste your money? You would if you invest before even knowing about the market and least possible knowledge about the property. It is necessary to have know-how about ins and outs of the real estate investment, so better take some time to make a plan than to regret. You are required to have basic knowledge about real estate market and agency where you are dealing through.
Do leverage the professionals:
Are you worried about what to buy or invest on? Your worries are over now because all you need is a professional agent who has an enough knowledge regarding the area, location, prices, and recent trends. These are the consultants who would work with their team diligently to helo you find properties with profits so that you make less mistakes.
Know-How about tax laws:
It is somehow crucial to get updates about the tax laws, it means to know the schedule and the taxes based on country, city, or state should be known.