Pros and Cons of Investing in Real Estate

Apr 02, 2022 by Naukhez Arshad Qadir

Real estate investment is a profitable activity for people in Pakistan. Investors usually buy properties and hold them for a long to take benefit from the property’s increased value. However, it is not necessary that investment in real estate in Pakistan always go the right way, and many people lose all their lifestyle savings.

Reall.Pk has gathered a list of pros and cons of investing in real estate. The list will guide the investors to the possible risks and benefits attached to the property investments for wise decisions.


Pros of Real Estate Investment:


There are many reasons which make the property a good choice for investment. Let’s have a look at all the pros of real estate.


Purchase properties at a low price:


Investments require strategy, patience, and persistence to guarantee success and generate revenue. Real estate is a no different case. With proper research and negotiation, you can buy property below the market price, especially when a buyer is ready to sell.

Investors can resale property at higher and better prices after buying these kinds of properties only after deep knowledge of real estate. Real estate agents are particularly good at finding real estate which is below-market price.


Steady Cash Inflows:


Real estate generates steady cash flow in the shape of monthly rents. It generates a stream of rent payments and allows earning passive income. Sometimes properties provide you additional rent payments when other features are attached like parking space, extra storage area/room, dryers, etc. Steady cash flows are beneficial for mortgages, property taxes, and loans from the future.


Property Appreciation Value:


Real estate provides appreciation value with time depending on the area and local demand levels. Appreciation value can vary substantially within a short distance, but if you choose with care, the appreciation value can be higher over a long period of time. Also, if you are good at repairing and maintaining properties, you can boost the value of your property.


A Hedge against Inflation:


Inflation is a constant issue in Pakistan, and real estate provides a hedge against it. The appreciation value of the property increases faster than the inflation rate. That is why it is considered the wisest decision for investment; no matter inflation rises 1 % or 10 %; the property values will go up automatically.

The formula is simple you can bid higher than the inflation rate and set the price accordingly. Property rates also increase during uncertainty, or they remain stable; therefore, it is considered a safe investment.


Income increases gradually:


With steady cash flow and increasing value on rent and properties, the generated income gradually increases and does not affect the inflation rates. This advantage only applies when your property is in a better location and has basic facilities and amenities.


Control over Investment:


Real estate offers control over investments, which is rare in many investment types. People usually invest in shares and bonds, but they do not provide grip and control over assets. Sometimes you can earn more, and sometimes investors can lose every penny.

On the contrary, real estate investments are safe and mostly go upwards. In Pakistan economic situation is never consistent due to rapid changes in geopolitical conditions. In the scenario, Real estate is among the few investments which provide control and surety.


Cons of investing in Real estate in Pakistan:


Despite the long list of pros of the property industry, there are a few cons attached to the investment in real estate. Some of the significant cons of the industry are as follows:


Earning profit is a long grind:


There is no doubt that the property industry is a profit-generating market, but it takes time to get remarkable benefits from the property. The sector requires patience, persistence, and strategy to succeed over time.


Scams and Frauds:


In Pakistan, scams and frauds are common inland and in the property industry. The incumbent government is taking steps to cope with the issue, and many efforts have been made. However, there is still a long road before investing in Reall.Pk always recommends investing in approved housing societies from relevant bodies and checking for any hinges through online property verification.


Let’s wrap:


Looking closely, real estate is the wisest option to invest in and generate revenue. With market research, strategy, and the assistance of reliable real estate agents, investors can create a remarkable profit.

So that’s all for now! We hope that it will provide you with a better picture of investment. Feel Free to share your feedback and queries at info@reall.pk. Stay tuned to Reall.Pk blog page for the latest news and information.
 

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