real estate market

3 Major Factors To Consider To Avoid Trouble While Investing In Real Estate

Investing in Pakistan’s real estate market is one of the most important decisions that must not be taken lightly. Most people buy a home or any other property only once in their lives so it is essential that they take all the important aspects into consideration while investing in real estate. Usually you would require some home mortgage to finance your plan of purchasing a home or property. For this purpose, you need to know if you really qualify for it or not. If you do, you should assess your expenses and savings and then apply for the mortgage accordingly. And if you do not qualify, you may request someone to cosign on the mortgage loan for you. 

A lot of people think that they can buy a property whether residential or commercial, without getting any assistance from the realtors. Little do they know that hiring a real estate agent can save you from a lot of trouble that might come along the way. Although the commission rate is quite high these days, that is about 0.5 to 2% of the total property, yet the outcome is worth every single rupee. Finding a party that pays you good money, dealing with the paperwork, cutting deals, etc is not something that an individual with no experience in the real estate business can pull off very well. Real estate agents are particularly vulnerable when we talk about getting sued as they have tons of tons of details, multiple clients, valuable properties etc, it is easy for them to tackle all situations. Whereas a common man with zero knowledge can face frauds and end up with no money in hand.  

One of the best things about buying a property through a realtor is that he will keep you informed about every next step and let you know the total costs including certain fees and taxes that you will be bearing at the time of buying a property. This will help you make a wise decision without worrying at the very last moment. You will know whether you can afford the property or not. 

Here are 3 basic tips that you should keep in mind to avoid trouble while investing in Pakistan’s real estate market.

1- Come Up With A Plan

Not planning ahead will ultimately result in failure in the real estate industry. Like all other businesses, the first thing you are required to do is plan beforehand and find properties that are suitable to your investment plan. Before getting a mortgage, you need to come up with a great investment strategy. What sort of property are you looking for, residential or commercial. If you are looking for a house, do you want a single family place or a multi-family place, vacation destination or not. These questions will surely help you come up with a great business plan. 

To read more, check out the article mentioned below. 

How to Start a Real Estate Business: The Definitive Guide (2021)

2- Research Properly Before Making An Investment 

People oftenly jump into a real estate partnership without doing proper research and due diligence about their investments. It is very important to research some of the investment strategies that are best for you as well as for the location of your choice. Without proper research, you would not be able to know the ups and downs of the industry to make a safe investment.  

To read more about due diligence in making real estate investments, check out the article mentioned below.

Importance Of Due Diligence In Making Real Estate Investments

3- Pay Attention To Cash Flow And Profit Opportunities

Investing in the real estate industry is not just about purchasing, holding, and renting a property. Being a real estate investor, you have got to plan your cash flow for the maintenance of properties. It is generally advised to hire a property manager to avoid any problems that you might have to face. As a potential owner, you need to plan your budget to pay the taxes, property mortgage (if any), advertising costs, and other dues before leasing, selling or buying a property under your name. Positive cash flow is a key to a good rate of return on an investment property. You should set your goal to see positive cash flow as it indicates that the net operating income you are receiving from the rental property covers all your expenses and leaves you with a profit margin as well. Furthermore, there is so minimum of two years ownership period used to define a primary residence,any capital gains you owe on such a sale are long-term capital gains.

To read more, check the article mentioned below. 

The Most Important Factors for Real Estate Investing

Keeping all of these tips in mind can help you stay away from big trouble when investing your money in the Pakistani real estate industry. Without a doubt, this industry has a huge profit potential. Therefore, you need proper guidance and perfect strategies to turn the tables in your favor.

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