Types of Real estate investment
December 17, 2021 in Real Estate Real estate is a huge market where there is plenty of room for business setups. Many people are seasoned professionals working in the industry actively as real estate agents or brokers. Similarly many rich businessmen have spread out the area of their investment by putting their money into real estate. Property Dealers in DHA Bahria Town Islamabad One of the biggest advantages of investment when it comes to real estate is the amount of variety one finds them while looking towards real estate investment. There are many kinds of property to begin with. You can buy plots, apartments, houses, shops and more on the real estate market this can lead to great success in a business. The main crux of real estate industry revolves around buying low and selling high for profits… and with that there are many effective ways to achieve so. What are these types of real estate investment you ask? We’ll have them enlisted in detail below: Plots: Plots are also called lots or empty lots are simple to understand. A plot is a part of land that is to be built upon in the future. Plots provide the platform for building many dream houses and are highly variable in their nature as they can be bought in a variety of sizes catering to the affordability and needs of the investor. People are attracted to investing in plots as they are usually the lower end of real estate costs. Smart investors sketch out their business plans on the basis of investing into plots in an under development area. These investors will hold onto the plots until the
surrounding development rises. Since plots are a lot more susceptible to appreciation in their values; investors can net great profit from such an investment strategy. Investment into areas of established projects especially plots in DHA Islamabad, Bahria Town Islamabad are quite popular. Plots are based on a few types. They can be residential, commercial or industrial in nature. All three types allow a specific category of building to be put upon them; as their names suggest. Residential plots are having the highest activity in the market circulating around them given their high demands. Commercial property is also a great investment opportunity and can be transformed into rentals as well. Industrial plots are rare in their nature and are located in industrial hubs usually away from the residential sectors of a city to ensure quality of life for residents. Overall plots are a great starting point due to their versatility and affordability in real estate market. Rental Properties: Rental properties are all the heat when it comes to stable earnings from real estate. In other forms of investment we will discuss here most of the income is not uniform and depends on the buying and selling of property; however owning rentals can generate a steady passive income that make way for long term financial stability. Renting is the activity where a person keeps tenants under their property under a contract or lease and the tenants pay monthly (or however so is kept in the dealing) of rent. Similar to plots, rental properties can also be versatile in nature and have quite many benefits. You can turn both commercial as well as residential properties into full functioning rental properties. When it comes to residential properties both apartments and houses are in great demand for becoming rentals. What generate activity around residential rentals is people moving to bigger cities in hopes for better lifestyle amenities and job opportunities. Since many people are looking to improvise their lives with the newfound opportunity many of them cannot yet afford financially or for the sake of their own convenience to buy a house at that stage. This leads people to rent apartments near their work area so that they can improve their lives. Bachelors might rent out an affordable apartment near their office or business, whereas families usually move into fleshed out houses to accommodate themselves. The increased demands due to aforementioned reasons are why rentals continue to be a great investment in real estate industry. Posh and upscale societies like DHA Islamabad might not be exactly affordable for people moving to big cities so renting is an ideal situation for them. Not only for residential property but commercial properties are also enjoying a lot of attention in the real estate market. People might want to move their business to a new location where it gets ease of access to commercial facilities or might want to move their shops to a commercial hub that is a lot more popular and visible than their current location; such situations lead business owners to rent out commercial space.
Rental properties come with the cons of tedious management and require attention on the landlord’s part to keep the tenants satisfied from your property. Similarly rental property’s share of repairs falls onto the landlord so in case of any malfunctioning or mishaps in the house’s systems… it is the responsibility of the owner to keep up with the repairs in the renal property. The state of rental income also depends on the market situation. When inflation is high; the property rents are a safe hedge against it; however if the area your rental property is located within an area that due to some unfortunate circumstance becomes unattractive for tenants can result in a loss for you. House Flipping strategy: Whereas owners of plots and rental properties like to hold onto their property to net profits; house flipping is a strategy that allows for quick in and out of buying and selling a property to get profitable returns. This kind of investment is most beneficial for individuals that have good knowledge and experience in real estate evaluation and marketing. People who are in the business of house flipping target undervalued properties such as off market properties or the ones being sold less than their values due to some emergency. Such properties have higher rates of returns upon investment. The main benefits of house flipping are hidden in the quick returns. Most house flippers will sell their invested properties within the first 6 months. However the main drawback of house flipping is the experience and knowledge of market that it requires. So house flipping is certainly not for everyone. Sudden shifts in market situations can be a detriment to house flipping strategy of real estate investments. Improvements in property: Thought not a complete form of investment; the investment made on improvements in properties can be a great asset for returns in real estate market. Many property investors realize the importance of making improvements into a house. Investors will often buy out off market undervalued properties or old and worn out properties for a lower cost as their values have depreciated over time. Then these investors will make renovations and improvements onto the property in hopes of increasing their value. These improvements can range from cosmetic changes such as ne fencing and fresh paint on the walls to complete redo the house’s systems to ensure their smooth running. Remodeling of property is also a viable option for improvements if the property laws of the area allow so. Improvements can drastically change the overall appearance as well as functionality of a property. If he property allows improvements in the form of adding another story and rooms to add to living space can go a long way. A large property with an open lawn might find a useful improvement in installing a garage for the ease of future residents. Such changes can be big or small but improvements; if done right; can get a lot of profit for an investor.
Real estate investment trusts: (REITs) Also abbreviated as REITs they are a great investment opportunity with a fixed shares, lasting as long as the time it takes to build, develop and sell the property. Investors of reits can buy and sell shares to indirectly invest in development of real estate projects. These can also be considered as a portfolio exposure for real estate for individuals who do not want to directly invest into real estate. REIT investments can also lead individuals to expose themselves to investment in unconventional properties like malls and offices which seem tough for single business persons. REITs can provide cash producing leases; however the leverage that is associated with traditional rental properties in real estate does not directly apply to REITs. Conclusion: Pakistan has no shortage of luxury in its property as state of the art housing projects and schemes like DHA Islamabad, Bahria Town Lahore and Residential hubs of Karachi have to offer; however buying luxury is not the only direction to aim in real estate market. Real estate indeed is a grand opportunity from experienced businessmen to young entrepreneurs. There is plenty of variety to choose from as well. Different people come from different walks of life, whether they are single or married, actively working or returned. This means that they might not all fit into one box of investment. One of the major advantages of real estate over other investment types can be found in its diversity. A bachelor and young entrepreneur might have tons of time on their hands to invest into rentals and manage them however an experienced businessman might feel a lot more comfortable with buying and holding onto plots. For others house flipping might be the way to go, whereas some might dip their toes into real estate by putting their money towards real estate investment trusts. The world of real estate certainly has variety to choose from.