If you’re looking for investment options, purchasing real estate can be quite lucrative provided you do it right. Buying a plot should be considered a long term investment. You probably won’t immediately get returns on your investment. However, you are likely to get a good profit if you decide to sell it a few years down the road.
What a lot of people fail to understand is that real estate investment involves more than just buying and selling of land or buildings. It also comprises making sound decisions regarding the property’s location and its upkeep.
If you can’t decide between buying land or a house, just know that compared to houses and apartments, buying a plot is generally more profitable. While the value of land appreciates over time, the worth of buildings depreciates on account of old architecture and usual wear and tear.
Real estate investment allows buyers plenty of opportunities to make a substantial profit. However, choosing the best possible location and doing market research can be a little stressful for some.
Regardless of the fact that you are buying land to build a house or to start your own business, here are a few things you should watch out for while buying land in Pakistan.
1. Zoning Restrictions
Every city has certain zoning restrictions.
Before you buy a plot, make sure the land has been zoned for the type of property you are planning to build. For example, you cannot build a commercial building on a plot zoned for residential use and vice versa. It’s better to verify this with concerned authorities before proceeding.
Apart from being fully aware of zoning classifications in the area you have decided to invest in, you also need to familiarize yourself with other restrictions. These may include the building setback requirements, the approved floor area ratio, the height of a structure and the maximum number of stories you are allowed to construct on a plot.
Accessibility is perhaps the biggest factor when it comes to buying a plot, be it residential or commercial.
If you are buying land to build a house, you would definitely want it to be A) easily accessible by public transport and B) not too far away from the nearest commercial area. Even if you own a car, you should ideally choose a location that is closer to a bus stop. That would not only make the commute easier for you but for everyone who will visit your home in the future. Buying a plot near or on the main road is also a good idea. Unless, of course, it is located in a popular area that sees a lot of traffic.
However, if you are buying a commercial plot, it should be located in a crowded area that receives a lot of foot traffic. In addition, it’s always better to have an easy-to-explain address if you are running a business and have to regularly meet with clients.
Proximity to shopping centres, market areas, schools, universities, parks, hospitals, cinemas and other important landmarks can have a huge impact on the value of a property.
If you want to build a house, you would ideally want to buy a plot that is closer to at least a few of these places. Though make sure it is not located on the same road as these locations to avoid heavy traffic. Generally, plots facing parks are considered premium locations and are a little more expensive compared to the rest.
Meanwhile, people usually avoid living too close to schools and colleges. The reason being that the roads near these buildings tend to get jammed during morning and afternoon hours. The same goes for hospitals and clinics. While having a good hospital in the vicinity may increase the worth of your property, building a house on the same road as a health care centre won’t leave any room for peace and privacy.
As far as commercial plots are concerned, it is just as important to buy land in areas offering such facilities and amenities. However, you’ll first need to do a quick market survey. It will help you determine how many, if any, other places in the vicinity are providing the same services or products as you plan to do in the future.
A little competition never hurts anyone. But investors need to keep the demand and supply ratio in mind before making any such real estate investments.
Even if you are solely buying land for investment purposes, having more facilities around would help increase the value of your plot.
Ensure the area you are planning to invest in has running water, a proper sewage system and a gas pipeline. The same goes for transmission lines, grid stations and telephone lines along with cable and internet connections. You may also want to visit neighbouring properties and check if they have access to these essential services.
If the area is being developed, you can ask the seller of the plot or the real estate agent to provide you with an estimated time frame. However, if you don’t find their response satisfactory, reach out to the local authorities for an answer. You can also contact the project manager to voice your concerns.
Be it residential or commercial property, you should not compromise on the availability of basic utilities.
Smaller projects and societies may eventually give you a good return on your investment. However, they can also be rather risky. If you are new to the world of real estate investment, you should look into plots for sale in bigger projects. It’s always better to make real estate investment in projects that have been there for quite some time.
Societies such as Bahria Town and Defence Housing Authority (DHA) are widely regulated. That means there is little to no chance of you losing your hard-earned money to a scam and becoming a victim of property fraud.
Moreover, given the popularity of these areas, it will be a lot easier for you to sell your plots if need be. With projects in almost all major cities across Pakistan, both DHA and Bahria Town are perhaps two of the safest mega real estate projects for everyone who wants to buy a plot to build a home or start their own business.
It is important to note that Bahria Town is owned by a private company. Meanwhile, Defence is owned by Pakistan Army.
Before you make any commitments or pay the token money, visit the property at different times of the day. It will help you determine the environment of the area. If your plot is located near a school, go during morning and afternoon hours. This will help you determine if it gets too crowded around where you are planning to build a house.
Similarly, if you are buying a plot that is already surrounded by houses, go during evening hours. You’ll need to check if the neighbourhood is too noisy. Moreover, pay another visit a little late at night to see if there are any security guards present.
During your initial survey, also make sure to check if there are any illegal encroachments in the area. If there are any, it can turn out to be a little problematic in the future.
7. Litigation issues
To avoid any future litigation issues that might hinder the development on your property, you should ask the owner of the plot to provide you with all the tax receipts. Also, make sure to ask for insurance statements and other records. It would help verify if you are buying the property from the correct source.
It is also recommended to check with local authorities to verify if the parcel of land you’ve got your eyes own has been at the centre of any conflicts or lawsuits.
Needless to say, this requires some time and research. Instead of just taking the seller and the real estate agent at their word, talk to multiple parties (if possible). It will help you get a good sense of the location and any issues pertaining to it.