Advantages of Real Estate Investment | Surprisingly Good benefits from Investing in Karachi Real Estate

Real Estate investment is one of the most lucrative ways to earn a good sizable amount of income over many decades. The investment is the securest of them all where you get numerous benefits and government amenities

Investors such as yourself can enjoy predictable passive income, tax amenities, and diversification of Your portfolios. Real estate is not the fastest return-giving investment, it takes time! However, it is the safest and most reliable investment avenue there is. The fastest growth and excellent returns on Investment (ROI) are highly predictable for most properties.

 

It is true that the benefits of buying a rental property especially in Pakistan’s real estate sector offer numerous investment opportunities and comes with countless benefits such as steady cash flow income stream, prospective market value increment of assets purchased, Tax benefits from the government (Practically none for owning a land).

 

Carefully selected assets, particularly the properties in high-end societies such as Bahria Town Karachi, ASF city in Pakistan real estate outweigh the costs and help you earn a steady flow of income to achieve financial freedom in the long run.

Market Analysis

Before you invest in your first rental property in Pakistan. You must understand the market analysis.

Maybe investing in REIT would be more beneficial than making an investment without proper market analysis. It is that important!

And Of course, you might have conducted some real estate research and made some market analysis.  The chart above shows how much volatility has an impact on the growth and dip of stocks and property values over four years.

 

This is obvious, right? The property values are not that bad in the graph and are steadily rising. However, the rate at which their values are increasing is market dependant that you must be able to measure! There is no loss but your income can come even faster, we got you covered! therefore let’s keep reading.

 

And yes! You can even manage to hire a proper Property buyer guide.  Finding yourself lost somewhere such as what are real estate syndication tax benefits? Property guides are there for you. Even we at Redbox provide this service, we are just one call away!

Understanding: What is real estate investing?

There are many ways to invest in real estate that are different and unique at their own pace. Buying a property, and selling it after a long period of time, or purchasing a plot, building a residential or commercials and putting it on rent, or Buying, fixing it up, and soon selling or renting such properties which also called flipping. These are a few common methods of real estate investing. The benefits of buying rental property would be highlighted later on.

In our much Different article, we will explore such “Different method of real estate investing”

For sake of your understanding, if we try to summarise it, other unique investment strategy options would include:

• As mentioned above, Buying properties and renting them out for a long period of time to tenants.
• Buying and renting out vacation homes or commercial avenues or parks for short-term rentals.
• Real Estate stocks are a great way to diversify your portfolio.
• The REITs, or more commonly Real Estate Investment Trusts are more suitable to some investors than others.
• Investing or Sponsoring for real estate syndication along with  real estate syndication tax benefits
• Real Estate deals and other development through crowdfunding projects.
• And many investors like yourself can rent out their rooms to sites such as Airbnb if your extra room catching dust.

Advantages of Real Estate Investment

Steady Income | Passive Income

A steady flow of cash is the biggest reason why the majority of investors even Warren Buffet, Elon Musk, and other great Investors get inclined towards real estate.

The amount you can earn from your property depends on

1. the total value of a property
2. The Infrastructure around the place.

Infrastructure can be a bit daunting if you don’t have a clue what’s around you and all you are focused on is the house alone. Your property agent might not be Make sure to look out few important factors before selecting an investment property such as near schools, colleges, hospitals, parks, police stations, and universities, these tend to reap higher income flow as properties around them always remain in higher and much-valued demand

1. The Market value of the whole society or Area located
2. And last but not the least, the demand for houses (The demand for houses is highest since there’s a supply gap of over 3 Million houses.) 

With these factors, you can earn a rental income as a huge benefit and earn up to 80,000Rs per month on average.  You can find many countless rental  properties for residential and commercials across the major cities in Pakistan

Once you start earning passive income from your investment property, you can consider investing in other properties as well and start building your investment portfolio.

 

Protection Against Inflation

Real estate investment in Pakistan is a popular choice for investors, as one of the main benefits, a hedge against future inflation is derived from it.

 

Inflation might be one of the things that could hardly sulk your investment as the prices are driven by demand and the value of properties. However, your income from rentals may reflect inflation directly meaning your rentals would increase when there is an increase in inflation. Now the properties increase in value and this value is driven by the demand.

 

You must already know that rental amounts are subject to increase to a few percent on annual basis, which is usually enough to provide you cover against inflation.

Equity Building

If you have bought a property with a bank mortgage,

then as you keep paying your mortgage, your net asset value increases. When the property value increases, you build up more equity, which you can cash in on later, or keep stacking up the properties which would impact your positive networth.

 

The finance earned from your property can be gained through selling your property. The Finance earned can be useful for further developing your financial portfolio.

 

Using this equity to refinance or use the same amount to buy another property and help you grow your real estate portfolio. The Equity would keep on increasing as you buy more properties from the income earned.

Property Value Appreciation

Real estate investment is not a short-term plan.

 

Real estate values tend to increase with time and with a sound investment, you can make a profit when you plan to sell your property. The Property values tend to grow as time passes. The investors earn from these appreciation factors.

 

The sales value of the current-day property might be valued the same way in the far future. If we add amenities, government facilities such as good infrastructure and hospitals, and the demand for such property. All these factors play a key role in determining the prices.

 

The investors can make money through monthly rental income and property value appreciation as well.

 

And not just the value but the rental amounts also tend to increase over time, which leads to better and higher income. The below graph is of the Federal Reserve bank of St. Louis that shows the Rising value, an appreciation in value for property prices.

A Well-Curated Retirement Plan

Your Retirement can be spent without the worry of every dime. Real estate investment holds enough value that would carry enough financial return that you wouldn’t need to look for insurance companies or retirement plans from sketchy companies.

 

The rental income is a stable finance model being followed in Pakistan. Experts believe that

 

“If you make the right investment at the right time in the right asset, it creates a stable mode of increasing wealth over a longer period of time.”

 

It can help you curate enough freedom to move around with extra cash to spend on rather than holding it out all the way. A stable retirement plan with a steady cash flow.

It means the right investment property can help you during your retirement years with income generated from your rental properties.

Real estate investment helps the larger community

There are many benefits of investing in real estates such as ROI, monthly cashflows, and passive income but there are many benefits that directly contribute to the community.

By Investing in properties your providing value to the societies and economy. The number of houses would ultimately tell the buyers that there are options which they can avail themselves of. This would increase demand for houses, tenants, and more tax advantages through government incentives.

“When a community flourishes, the property value also increases – which means you are not just creating wealth but helping yourself and several other investors with long-term financial security.”

Conclusion: Making a Deal

Real estate investment is a newer and updated approach for our generations. The returns are diversified such as Flipping the properties or you can completely ignore owning land by investing in REIT! It’s all about making a deal that favors your portfolio.

 

Real Estate Investment has many advantages, from being a stable and great source of passive income to building your equity. There are many ways to appreciate your networth but investing in Real Estate provides the most value.

 

You may contact us at RedBox if you have any queries regarding any investment. You may read our other articles to fulfill your investment knowledge base and what’s in trend right now.

You can also contact the author of this article at Awais.Business420@gmail.com if you have any queries.