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Tips for buy to let investment

Tips for buy to let investment

Rise and fall of property prices is well known. Investors get profits when property prices rise and sustain losses when property prices fall. But even when property prices fall, buy to let market is strong and gives constant returns. But before investing in buy to let market, one should know about the rental market. Here are the few tips for buy to let investment.

Select an area which is famous among renters

Location does matter for buy to let investment. Property situated on prime location has always more demand and high rental yield. Property located in lower middle class areas yields less rents and same is the case with high end properties as rents are very high and chances of finding suitable tenants is equally difficult. Therefore it’s better to select area which is famous for renters.

Buy property near to central business districts and bus stations

Most people prefer to rent houses which are near to work. People also think about nearby transportation facilities before renting a home. Houses that are located near to central business districts and bus stations have high occupancy rate. Therefore it is better to buy house near to central business districts and bus stations for buy to let investment.

Size of property

Size of property is also very important for buy to rent market. One should know that renters always look for small houses or 2-3 bedroom apartments to rent. It’s hard to find tenant for large size houses. But houses up to 5-7 Marla have good demand and higher occupancy. Therefore size of property should also be considered as tips for buy to let investment.

Targeted tenants

In Pakistan disputes between tenant and land lord is everyday talk. To avoid the disputes, it’s very important to select a tenant who is responsible and pays the rent on time. Students do pay regularly but their stay is normally short. But on the other hand people with no proper jobs have always difficulties to pay on time. Pensioners and government servants always pay on time.

Know your duties

As a landlord you have many duties. Firstly you have to register the rent agreement with nearby police station. Secondly you have to make sure that property is properly maintained before occupancy by tenant. Thirdly you have to pay the tenant for any repair they do on your behalf. Fourthly you have to give at least 1 months’ notice to the tenant before eviction.

Recommended:
Rights of landlord and tenant

(35) Comments

  1. Zulfiqar

    on   said 

    I want to invest in land plz suggest me where ? And why ? I have around 40lacs should I buy two plots in separate locations I live in islamabad. Or should i wait for budget and panama case results?
    Thank you

    Reply
    • Zulfiqar
      Yes for Islamabad you should wait for at-least the budget and better if you wait for Panama Case Final Verdict
      But in Gwadar there are some good options that the moment.

      Reply
  2. Kindly sir also let me know
    Gawader newtown investment plan is better or in gulberg islamabad according to my budget 20-22 lac.
    How much price will rise in both in 1 to 2 years?regards

    Reply
  3. Dear sir,
    I want to buy 7marla plot in gulberg islamabad price ranges 20-22lac.
    Kindly let me know about this investment plan.is this good.?
    How much time it takes to develop completely and how much rise peak price would be for 7marla…?

    Reply
  4. Hasan Aariz

    on   said 

    Assalamoalikum,
    Looking to buy plot size 120 Sq. Yard in scheme 33 Karachi near SADI TOWN price range of 35 lacks what is your suggestion regarding other housing societies also anticipating to start construction within 3 to four years.
    Thanks,
    Hasan

    Reply
    • Hasan Aariz
      This is good scheme
      It is near to Hyderabad-Karachi Motorway and Northern Bypass
      All trade of CPEC will be through Northern Bypass
      Till 2020 government will develop this area
      You will get good returns on your investment

      Reply
  5. Malik Amjad

    on   said 

    Dear GHAR 47, u are providing a great servic e may Allah give you reward. i have a question wihich i think 90 % people will be lookin for answer
    1- as you know that there are lot of litigations and fraud issues in land / plot purchasing thats why people hesitate to invest in public sector and in open land areas. can you guide us how to buy any land/ plot step wise to avoid this thing. i.e, intiqal, registery, patwari check, etc etc. please.
    2- General concept to make own house step wise please, or if you can refer any book availble in pakistan to go through that.

    Reply
    • Malik Amjad
      BUYING PLOT
      If buying in a housing scheme, always consult the local development authority about the status of society.
      If buying in areas with registry, always check the original document. Best way is to hire the lawyer. Layers will guide the process. Seller will give you the copy of registry. You should give this registry copy to your lawyer and patwari. Just confirm from partwari that seller has inteqal documents on his/her name. Registry and inteqal documents are must to transfer property.
      If ever you feel that property has many owners or inteqal problems or any document is missing, never buy that property. Lawyers will take the little fee, but lawyer will always help you to avoid frauds.

      BUILDING OWN HOME

      Click on the below links;

      http://ghar47.com/2014/11/30/building-your-own-home-in-pakistan/

      Reply
    • Rizwan
      The has discussed the history of property taxes in Pakistan and its effects up to property tax amnesty scheme 30-11-2016.

      What is new in this blog is that government will review or revise the amnesty scheme mechanism in budget 2017-18.
      FBR says that there are plans to impose a single price for property throughout Pakistan within the next three to five years.

      According to blog this new law will decrease the property prices in Pakistan for couple of years.
      But in long term property speculation and black money in real estate sector will cease to exist.

      Reply
      • rizwan

        on   said 

        what does single price throughout pakistan mean??? i do not understand plz explain….mean jo price lhr main hogi woi price khi main ??? samjh nai ay baat

        Reply
        • rizwan
          same price will be for sale size and category. For example 5 Marla / 125 SQ YARDS House penalty price will be same in Pakistan if someone cannot show the source of income.

          Reply
        • Rizwan
          I have long discussion with dealers
          Dealers are saying that now property price is tagged to the Panama case decision
          Panama case decision in favor of the ruling party will increase the property prices and against the ruling party will crash the property prices.

          Reply
    • Afifa
      Johar Town, Valencia Town in central Lahore and in Cantt area many options but Paragon City, Punjab cooperative society
      Pak-Arb is also ideal
      But never buy larger than 5 Marla house as its hard to find renters for large properties

      Reply
      • Hassan

        on   said 

        I have a File of 10 marla plot in Bahira Town sector-F, Tariq bin ziyad block. it was balloted 1 year ago, but still there is no map given and neither any news for when it will be on ground. I am suffering in this file for 4 years. please guide me, should I sale this file and invest in any other good place, or I should keep it. also tell what is the actual reason bahria is not giving plots to Sector-F affecties?

        Reply
        • Hassan
          You should sell this file and buy some where else.
          There is lot of confusion about SECTOR F, Tariq Bin Ziyad Block.
          I always recommend to stay away from risky investments.
          Bahria Town has promised to compensate the affecties but no real work just promises so far.

          Reply
          • Hassan

            on   said 

            can you please advice where to invest after selling this file. Lake city, DHA Rahber, New Lahore city, NFC2 or any other good sciety? what would be the price of my file?

          • Hassan
            Its better to invest in Lake City Lahore due to good chances of price gains due to construction of Southern Part of Lahore Ring Road.
            Tulip Garden Lahore is also one of the best option as its prices are still low but is approved from LDA.
            Just call Royal Consultants as they deal is all societies near Raiwind Road
            03212227122

    • qayyun bhati
      Property price crash is expected in 2017. But societies near New Islamabad International Airport will be crash resilient as prices will stay where they are as developments in this area will absorb the price crash.
      IF YOU SEE PRICE TRENDS
      Prices are stagnant everywhere but are increasing just around New International Airport.

      Reply
  6. Muhammad azeem yddin

    on   said 

    Sir what you think property bubble will burst !!!

    would be after budget june 2017 ?

    FBR is fighting the black money just we are reading in news paper but physically their is no impact on prices. it is still going higher and higher.

    their is no interest for set up manufacturing unit because the rate of return quite LOWER as compair to REAL ESTATE.

    everyone know the major reason for EXPORT SHRINKING just USD 20 BILLION. but their is no practical ways to sort out the matter.

    your reply and views will highly appreciated.

    Reply
    • Muhammad azeem yddin
      Property prices will crash very soon due to two reasons
      Panama case decision
      People in Arab Countries are loosing jobs and returning back homeland

      After Panama case decision, courts will start crack down on corruption and black money
      This will totally destroy the property prices as lot of black money is parked in property sector

      Reply
  7. In Lahore which area is better for rental value of 5 marala house
    I want to buy for rental purpose
    Please guid me as your opinion is very valuable
    Thanks

    Reply
    • Afifa
      Johar Town, Valencia Town in central Lahore and in Cantt area many options but Paragon City, Punjab cooperative society
      Pak-Arb is also ideal
      But never buy larger than 5 Marla house as its hard to find renters for large properties

      Reply

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