Dear experts,
I am asking this on behalf of a very good friend of mine. He invested in Bahria Town Karachi and bought 6 plots of 5 Marla each costing 1.5 lac and overall price paid for EGCH plot for each file was 3.5 lac PKR. He made this investment on the persuasion of a property dealer a few months back. He was told by the property agent that currently these are in loss. He now needs to pay around 1 lac PKR installment on quarterly basis for each plot, thus paying almost 6 lac PKR every quarter in installments. To me, it does not look like a good investment (I think I read somewhere on this forum about BTK not being a good investment). Can experts guide what is the current status of Bahria Town Karachi? What is the profit/loss situation at the moment? Is this a good investment in short or long term?
If installment is not paid for 4 -5 installments, can Bahria cancel the plot? The surcharge seems nominal, does that keep increasing for every installment as time progresses e.g., assuming the first installment was not paid of rs 1 lac and the initial surcharge is 1 thousand Rs, then if you don't pay that installment for one year, would the 1 thousand increase or would it be that the only surcharge would be for the next installments?
The same property dealer is recommending to hold on to the 5 Marla plot file and not pay installments (every 3 months) and wait for 6-8 months- per him the property price will come back and give profit. Is this a good advice?
Should he retain these plots or sell them now to avoid any further loss?
Would really appreciate your expert advice.
Thanks
@ Shah
There is confusion regarding price of each file in your question. If the files were purchased after balloting, then Rs 0.35 Million for one file means the agent fooled your friend, however if the same was purchased before balloting then there is benefit of doubt as everyone was gambling.
Now I think your friend has two options. If he can afford to pay the installments, he should continue to do so till suitable time. Otherwise keep what you can afford and sell the rest. Time to sell should be carefully decided.
Regards
@Shah
Current price of 125 sq yard is 1.4 to 1.5 Lac. So currently your friend is in big loss. Now he have no option but to hold these files as long as he can.
@ Shahsb, In my opinion this project will be a big success in coming 4-5 years, keeping in view few points, as it is BT first project in karachi, demand of huge and populated city, competetion with DHA, coastal city, gated community with security concerns etc etc.., but depends when it will start getting the shape.
Your freind bought 6 files as he was thinking for a quick profit, which he seems unlucky and also the price mentioned is too high, I bought 10 marls files in almost similar amount.
Current rates shows market is slipping day by day.Few days back it was 1.85-1.90 lacs.Majority of allottees lost more than half of the amount by now.
Thanks Brothers.
@Braintec: just to clarify my friend bought these files from market. That means while the actual price of the plot was 1.5 Lakhs. Since he bought it from someone else, that person sold it to my friend on a profit of 2lakhs Pkr. Hence the total price paid was 3.5 lakhs pkr. I know it seems to be a terrible move.
Anyhow, now his options are as most of you suggested:
Keep paying the installments and hold the plots as much as he can till good time comes.
Hold the plots but dont pay the installments, if that happens, does the surcharge increase if multiple installments are missed or does it stay the same? When the good time comes, he can sell it and at that time pay the missing installments, and sell the plots
Sell it now at loss, which is I think quite a heavy loss at the moment
Can you advise which of the above-mentioned options to go for and also explain surcharge on missing installments as mentioned in option 2 above?
Thanks
@AJ
The recent rate you mentioned 1.85 to 1.9 Lakhs, is it for 10 marla BTK plot or 5 Marlas?
Thanks
If I could be you, I would use 2nd option for next 5-6 months before paying any further money to them ignoring whatever would be surcharge.But everybody should decide accordingly.Gentleman’s way is to pay money according to installments as requested:)
It was for 5 marla just after last date of paying first instalment of 90,000 Rs.
Thanks AJ,
Appreciate your advice.
Cheers
@AJ
Can you please clarify the risk involved (cancellation) in case of option 2. How many installments shortage can cause cancellation...... Any idea?
I have also stuck some money although my loss is bit less than Mr. Shah's Friend. I have not yet paid installments but I am still not sure about what to do next.
Any advice?
@Braintec,I already mentioned in my previous post that what I could do, if I would in your situation.But everybody should decide accordingly.
I haven't read term and conditions.Anybody who read those terms and conditions can guide you better.My understanding is one should not miss two consecutive instalments and second instalment can be paid in the last month too.So by paying one instalment within 6 months , you can avoid risk of cancellation.This is my understanding not an authentic information.Exact information can provide by some other senior members as this will be serious issue in coming days for most of the allottees.Paying through regular installment might not be pleasant experience for most of them while seeing their money further sinking with every passing day.
According to my information,all bahria property is sinking with every passing day,it is not limited to BTK only.
Most of RWP/ISBD real sectors depreciated considerably too but BT was leading the market.It's behaviour affects real estate seriously as compared to any other housing society.
It is a good long term investment, retain the files, pay installments on time.
Thanks Brothers,
Appreciate your advice.