Without a doubt, an investment in the real estate industry of Pakistan can make a person rich. But a person should never forget that the real estate industry is quite complex, and here nothing is possible without working smart. When investing, an individual must know whether they are making a correct decision or not.
There are several options for investors in real estate. Among them, few are profitable property investments like a rental property. So, if you are looking for a long-term investment, there is nothing better than a rental property.
It is a fantastic way to boost the investment portfolio. But before buying any property to let, proper research on your own is essential. Because when someone relies on experts from the beginning, sometimes because of pressure, they end up investing in the property that doesn't suit them.
The benefit of research is that a person can clearly figure out what characteristics they want in a property. Once getting clarity, it is time to hire an agent to carry on the process to take it till the end.
However, when selecting a location for the property, the option becomes limited when a person plans to manage it on their own. Because buying a property that is close to where you live is better. However, if you are planning to hire a professional to manage the property, it is when proximity doesn't matter much.
Now that you know about the profitable real estate investment, it is time to learn about the features of profitable rental property.
The top features of rental property, a profitable real estate investment that investors should consider are:
Without tenants, there is no way a rental property owner is able to do anything. It is the only way to make money. Now keep in mind that the money an owner can earn from the rent is based on the location of the property.
If an investor invested in a property where rent is high, they would be able to earn more. Also, the neighborhood where property demand is more allows the investor to make more too.
In case you end up in a neighborhood that has so many vacancies, avoid investing there. The probability is high that the area is not secure. For details, try contacting a local agent, as they will be able to give you a better idea about everything.
When investing in a rental property, a person must consider the security situation of the area. No tenant will prefer to move in an area that isn't safe and secure. It simply means that there is no way that the property letting business flourishes in a place where the crime rate is high.
Remember that one of the key features of most profitable rental properties is that they are located in a crime-free area. When looking for a property renter, don’t focus on the house condition, location, or rent only. They like to ensure whether it is safe for their family to move into a particular property.
So, before investing in a property, consider this feature. Ensure the cameras are installed in the streets, street lights are there, the area has its own security, and so on.
The property taxes aren’t the same as it varies area to area. An investor must know how much they will lose. Buying a property where the property tax is a lot isn’t a bad idea, as long the availability of tenants is excellent.
Still, an investor must never forget that renting can be a profitable property investment, but the tables can turn quickly because of a bit of mistake. There is no way an investor is able to earn a single penny from renting a property if it's not profitable.
Take as much time you like before making a decision. Never hesitate to take consultation from the experts if needed.
However in Pakistan mainly, it is generally levied at a flat rate of 10% but the tax rates vary, depending on the province.
If you are planning to rent a property to tenants, it must be in an area with good schools. Such a location not only attracts tenants but also increases the value of the property. So, if you have to sell the property shortly, you will get a good amount.
Remember, the family home that doesn't have any school around isn't best or profitable for the investment.
The location that offers multiple job opportunities also attracts tenants. Everyone wishes to have a home that isn't far from the workplace. Also, parents love their kids to do something productive at a certain age, but at the same time, they don't like to send them far away.
So having a property in an area where there are great job opportunities for millennials and others will do wonders.
It doesn't matter how excellent the area is; developers must plan great future development projects. It is the only way to grow. So, ask the local agent if you aren't seeing any construction for a moment.
Just make sure the construction doesn't affect the value of your property. Also, the building of new residential properties can create competition too. So, keep these points in mind always.
The other feature that makes the property profitable is that it isn't in the area that often gets affected by natural disasters, or there is a chance of natural destruction. So, always check the history of a specific area if you don't know much.
Because tenants don't want to live in properties that aren't safe from tornadoes, earthquakes, or windstorms. Also, as an owner, you would not like to lose your investment because of such a situation.
The properties that are in the area where the climate doesn't change or is quite harsh aren't the favorite of the tenant. Also, unwanted climate changes affect the value of the property.
There is no point in focusing on other features of the profitable property investment if you forget about sanitation. It is best to buy a property to let in an area where the sanitation system is the best. Tenants run away from the properties that don't have excellent sanitation.
Imagine moving into a place where pipes are leaking, the smell is all around, and flies are roaming freely here and there. It is something that will make a person feel sick and disgusted. So, never ever compromise on this point.
The tenants aren't going to stay at home forever. Also, not everyone has a car and even those who have to prefer to travel in public transport most of the time. So, buy a property in an area that has reliable transport facilities around.
As mentioned before, never think that succeeding in a real estate market is easy. A person can enjoy profit with the right moves, and one wrong move throws you down the hill.
First, it is essential that a person knows what their letting audience is going to be. After that, accordingly, select the property on your own or with the help of a real estate agent. And in all this, never forget about the budget.