Real Estate Investing For Beginners
Real estate is an imperishable asset, ever-increasing in value. It is the most solid security that human ingenuity has devised. It is the basis of all security and about the only indestructible security. – Russell Sage.
Real estate investment is considered to be one of the most lucrative business ideas in Pakistan. No doubt, RE is one of the best ways to secure your hard-earned money. There is a common misconception prevailing in society related to real estate investment. People think that real estate is a complex thing and you need an extra brain to understand the ins and outs of real estate investment. Whether it’s a single-family house for personal use or a rental property for investment purposes, real estate is no doubt, one of the best investment opportunities in Pakistan.
In this blog, we bring you a detailed overview of all the ins and outs of real estate for beginners. To know more about real estate in Pakistan, keep on reading.
What is Real Estate Investment?
Real estate investing is related to the purchase of property as an investment to generate income rather than using it as a primary residence. Some of the places where you can put your hard-earned money include houses, office buildings, agricultural land, commercial plot, etc.
Pros of Real Estate Investment
- Real estate is one of the few assets whose value appreciates over time. This means, if you buy a real estate project in Pakistan today, its value will increase over the years and your hard-earned money will eventually grow by leaps and bounds.
- Unlike other investment opportunities in Pakistan, real estate comes with multiple benefits. Apart from regular rentals and other similar benefits, real estate also provides you with tangible and physical assets.
- A real estate investment can result in multiple income streams. For instance, if you have a house, you can rent it out, you can live in it, you can even use it for small business ideas in Pakistan such as bed and breakfast service.
- It is a safe investment. When you invest in a reliable society or area, you automatically secure your money at the very instance.
- Real estate comes with a low-risk factor. Unlike other investment opportunities, risk can be mitigated in real estate, that too very easily. Simply invest in reliable real estate projects and secure your money for the future.
Real Estate for Beginners
Do your research
One of the best ways to learn about real estate is through research. Use different media such as newspapers, news articles, real estate blogs, etc to learn all about real estate and how it operates in Pakistan. This research will not only make you aware of the real estate market in Pakistan but will also broaden the horizons of your knowledge.
“In the real estate business, you learn more about people, and you learn more about community issues, you learn more about life, you learn more about the impact of government, probably than any other profession that I know of.” – Johnny Isakson, U.S. senator.
Listen to people around you who are linked with real estate in any way. Sometimes the opinions of others help you a lot as well. Also, if you want to invest in a real estate project and you are new in the industry we suggest you do thorough market research and ask people about property prices in Pakistan and the latest trends related to real estate.
Wait for the right time
If you find a real estate project that you really like, do not rush. always, always, always wait for the right time and make decisions accordingly. Before making any hasty decision, make sure you know about the property value, its resale value, neighborhood, and rental value.
Investment decisions should be well informed. So, take your time, don’t rush, and invest in the real estate property that is best for you.
Develop an understanding of the market
It is a common practice in Pakistan that people depend solely on real estate agents. This should not be the case. You should have sound knowledge about the real estate market and how it operates in the Pakistani real estate market. So, keep yourself up to date with the latest happenings and trends related to real estate.
Invest in Rental Properties
Rentals are one of the most common and widely used practices to generate a good source of income. There are two ways in which you can generate monthly rentals. Firstly, you can earn rent by buying a residential property. You can live in the house and rent out the rooms or portions that you are not using. Secondly, you can also earn rentals by buying a rental property and renting it out as a whole. It can be a residential property, commercial property, or agricultural piece of land.
Another way to earn good money is through turnkey real estate. In this process, the property is renovated and has renters already. In short, you do not have to do much about the property. You just buy it, fix it a little and get immediate profit to put towards the mortgage.
Start small and grow steady
Another misconception prevails in the society according to which real estate can yield a hefty amount of money in a very short time and you do not have to put any effort into this business. This is a wrong approach and not practical at all.
Like every other business in the world, real estate also grows slowly and gradually and there is no shortcut to it.
Also, refrain from putting your money in one place, especially if you are new to real estate. first of all, understand the market, know its trends, value, and current prices and then invest accordingly. For example, start small by investing in one unit. It can be a flat or commercial property. With experience, you will know more about real estate and you will be able to expand your investment in an efficient manner.
If you are looking for a way to invest and grow your money in real estate, try flipping houses. House flipping is a process in which a person buys a house at an affordable price, renovates it, and sells it at a profit. This is one of the best and easiest ways to earn money in real estate.
One thing that you should keep in mind is that even though house flipping looks easy but it is not. There is a risk factor attached to it and one has to accurately estimate the renovation costs, otherwise, the value of the property might suffer.
Invest in vacation houses
Vacation rental properties come with multiple advantages. You can use it as your residence, you can use it to spend your weekends, you can also rent it out to earn some extra cash. However, this investment depends highly on location, what type of property it is, and how aware the tourists are about the place.
One drawback of vacation houses is that usually, these types of properties are away from your original residence and you need someone to manage the house in your absence.
Consider Commercial Real Estate
Commercial real estate is one of the most purchased real estate properties in Pakistan. Commercial properties are usually preferred by people who are looking for real estate options other than residential properties. Most of the time, commercial real estate is more expensive than residential options but they also generate more revenue.
So, this was a concise yet informative guide to property investment for beginners. If you are interested in real estate and want to secure your money in the long run, this article is really helpful for you. These real estate investment tips for beginners are worth knowing.
If you have any other questions related to real estate investment opportunities in Pakistan, let us know in the comment section below and we will get back to you as soon as possible.