Planning to invest in Pakistani Real Estate? Minimize your risk with Shaariq’s 5 check points
A property is a big investment. You need to make sure that you are not risking more than what you can afford. Here are the five things you should be considering before buying any property in Pakistan:
- Location of the Property
Location is everything when it comes to real estate. The location of your property will determine its value and ultimately, your returns on investment. If you have decided to buy a house or flat, then first decide where you want to live and only after that, look for properties matching your requirements. Your choice of locality has a direct impact on the cost of living, quality of education and healthcare facilities available and other amenities like shopping malls, parks, cinemas, etc.
- Floor Area of the Property
This is one of the most important factors while deciding how much you want to spend on a property. It depends on the size of the property and whether it is furnished or unfurnished. Also, you need to know the square footage (SF) of each room, including bathrooms and kitchen, so that you can calculate the total SF.
This will help you estimate the price per SF. Generally, larger flats come at higher prices. However, remember that the actual amount of money required to purchase the property may vary depending on your lifestyle.
For example, if you are planning to commute daily from home to office, you might prefer a smaller flat as it would be easier to manage. On the other hand, if you plan to stay in your flat for long periods of time, you should consider getting a bigger property.
- Monthly Rentable Space
The monthly rentable space refers to the area of the property which can be used by tenants without interfering with the use of other rooms. A larger property means more rentable space and hence more profit for the owner. If you are renting out the entire property, then the monthly rentable space is equal to the total floor area. However, if you are sharing a property with someone else, the rentable space depends on the number of occupants.
- Current Market Value (CMV)
If you are looking to buy a property, then the current market value (CMV) is an important factor. It is calculated based on the current sale prices of similar properties in the neighbourhood. For example, if you are planning to purchase a flat in Sector F-6, you need to check the CMVs of similar apartments available there. This way you can get a rough idea about the amount you can spend on a property. You can also compare the CMV of the property with the expected rental income from it.
- Loan Amount
Loan amount is another important factor when it comes to property investments. There are two types of loans – secured loan and unsecured loan. In a secured loan, you take a security against your property such as a mortgage or a lien certificate. In case of an unsecured loan, you do not provide any collateral. However, this type of loan is risky because you don’t have any guarantee of repayment. Hence, it is advisable to choose a secured loan over an unsecured loan.
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