In my view, 1%/month, as far as property is concerned can be an ambitious demand. I am considering a continuous inflow of 1% for at-least 12 months period. In general, I am yet to see any property worth 5.0 - 6.0 million resulting in a rental yield of 50k to 60k. At max, it can be 0.5% to 0.7% at max. Of-course, I would be happy to be corrected, in case I am missing something obvious.
Commercial property can bring better return but one must also consider the Commercial tax, increased transfer fees ,high maintenance and long term contracts. If for a period of time, commercial property is vacant the commercial utility bills, whatever will also on the owner.
Investment is business can help you to achieve that figure. However, business context will be more fragile and unpredictable than real estate, comparatively.
The trick is:
- In real estate, investment doesn't get shrinked due to inflation or depreciation of PKR. So, you may get 0.5% - 0.7% at max per month but your asset worth will increase overtime (considering that there are no litigation(s) in the property/asset that you own).
Example: As a bench mark, at a low cost CDA sector I-16 in last 8 months, the asset worth has been increased by upto 30% approx. Other trends can also be checked on Zameen.com
- In other businesses, you may be able to easily achieve > 1.0% on monthly basis but more uncertainty and whenever USD takes a hit on the PKR, your principal amount will be devalued/shrink.
Example: As a bench mark, typically PKR based investment have shrunk by upto 20%, i.e., PKR to USD depreciation.
ps: I am unaware of any saving certificates and how they work and technicalities of profit calculation. However, a brotherly advice would be to stay away, due to the interest calculation factors. On paper they show some rosy pictures but at the back-end things are messed up. In addition to the religious reasons, you can also witness it from a practical point of view that Socialism, Communism or Capitalism, name whatever systems that have been based on interest-based economies have seen a collapse overtime. Their slogan can be 'Peace of Mind etc.' but once you get into it that can be big disaster, I believe.
354 days ago