How to Make Money in Real Estate Pakistan

If you are looking to invest and aren’t already convinced to channel your money towards real estate – we’re about to make quite the case! One of the main reasons people invest is to increase their wealth. Although the motivations may differ between investors—some may want money for retirement, others may choose to sock away money for other life events like having a baby or for a wedding—making money is usually the basis of all investments. We believe more people in Pakistan can benefit from investing in real estate. Here’s a list of 5 ways you can make money in real estate!
  1. Rent Out a Property 

Buying a real estate property with the intention of renting it is a great way to make money and build wealth. As an investor, it’s important for you to know how to calculate the rate of return on a rental property to determine its efficacy as an investment. To calculate the property’s Return on Investment in terms of monthly rental value:

  • Divide the monthly return by the amount of the total investment
  • Monthly Rental Income/Purchase Price × 100%

If your calculation gives you 1% or above, you are looking at a property that has great monthly rental value.

Once you have a rental property as part of your real estate portfolio, you are open to one of the best and easiest ways to make money – by renting property. Yes, you can rent out your property like your house or office space. This not only generates regular rental income but you can benefit from this amount for a lifetime. Remember, if you’re just starting out you don’t need to own a separate house or office space. You can also rent out a portion of your house to generate a good rental income. Moreover, if you have a furnished property you can advertise it on vacation rental platforms. Through sites like AirBnB and Expedia, travelers will book your furnished apartment and you can generate a steady stream of income from it.

  1. Renovation

House flipping is when a real estate investor purchases houses and sells them for a profit, after doing some renovation and additions to the property. According to recent findings, the Pakistani real-estate market offers tremendous potential for profits and high returns on investment on flipped properties. You can manage a profit of 15 – 25% on each house that you invest your resources in. 

For instance, if you have just bought an old house in G11 for 1 Crore and spent 15 Lakh on its renovation – You can easily sell that renovated property for 1 Crore 30 Lakh. So there’s a good chance you can earn maximum profits on your investment and enjoy the many benefits of house flipping. Some investors shy away from purchasing an old property since they fear the risks of flipping houses. However, if you work with the right contractors and seasoned real estate agents, you can close a lucrative deal to make good profits.

3. Find Properties Being Sold at a Lesser Rate Than the Market

If an owner is in need of quick money, they are often willing to sell at a price lower than the market rate. This is a quick and safe investment opportunity for you. You can put it up on the market as soon as you purchase it. You are likely to make a profit here since unlike the previous owner, you have the time to wait for a better offer. 

One thing you can do is to target homes that have been on the market for a long time. Those sellers are usually willing to make a deal, particularly if the buying season in your area is almost over and they need to move. Moreover, If the seller has dropped their price, this likely indicates two things; they have wiggle room in their asking price, and they haven’t received any offers.

With that said, ensure that you are not exploiting someone who is in need. Do not buy at a fractionally lower price than what would have been the market rate of the property. Keep a target for a 5 – 10 Lakh margin, and invest ethically. 

4. Buy as Soon as a New Project is Launched

It is a good idea to invest in property as early on as possible when a renowned and authentic real estate firm launches a new project or society. When a high scale project or society is introduced, people do not waste any time before buying. The files all run out fairly quickly and the number of people willing to invest ends up being higher than the number of files available. If you are able to get your hands on the files as soon as the project is initiated, you can wait for the inevitable rise of prices and can then sell it at a profit.  

5. Develop a Society or Construct a Plaza (Value Addition)

We have kept the most profitable investment for last. Value addition in terms of Real Estate Investments, means buying an open piece of land and then putting in the resources to develop it into either a society, or a building (if the land is smaller). 

Buying a lot of land with the intention of converting it into a society requires that you follow all the legal requirements set in place by the government. This will help you a lot in the long term, and will prove that you are operating ethically and legally. While going for this route can mean that you will have to invest a larger amount at first, the Return on Investment for a project like this can be huge! It can go up to 1:7, which means that for every Crore that you spend, you will earn seven. If you would rather start small, a decent sized piece of land can encompass a building which you could build as either an apartment complex perhaps with retail outlets too.

To undertake this project it is essential that you have both land and expertise in the construction field. We understand that it is rare that you will have access to both yourself, in this case it is recommended that you collaborate. Once you own land sufficient enough to take on this project, you can work together with a construction firm that can provide its experience and expertise to help you build the project you’re envisioning. If you are a constructor interested in taking on this project, we suggest that you partner up with someone who owns land.

Check out our other blogs to keep up with real estate updates and recommendations. 

1 thoughts on “How to Make Money in Real Estate Pakistan

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