Dear friends,
I want a regular source of income from my investments.
Right now i have about 50-60lacs available for investment and i want to extract monthly profit of around 1%.
Can you guys suggest me any good ideas?
I am not in pakistan so i wont be able to work with this money. I would just be investing. If not 1% how much is the maximum profit i can gain?
Appreciate your response.
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I asked this question sometime back as well but due to some personal issues, I was not able to invest. New ideas even if not related to real estate are welcome. Thanks.
If saving certificates is not a problem then its a safe option. If above age 60 then BSC below SSC or DSC with profits range 9 to 11 % per annum. In coming days inflation is going to increase and rates will increase.
Mutual funds is another option but many of my colleauges have taken a hit.
Mohammad you have very beautiful name. Why you want to lead @AKH to haram when there are plenty of halal ways possible. May Allah guide all us to which pleases him.
Dear AKH,
1:Invest in shops in CDA sectors and get reguler rent and shops prices will rise also G-13,15 and may you find something in I-8.
2:Invest in CBR-2,B-17 G block,ICHS and i am sure prices will rise.
3:Check apartment in Gulberg Green
Regards
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.
Dear AKH
Buy a flat/shop and you can get sure Halal money @ 30,000 per month as minimum with 60 lacs investment.
One day everyone has to die and and "sood" is Haram as per "Swad e Azam", among all sects of Muslims.
Sorry if I harassed you but live with no burden on your conscience, if you mind honest accountability in life after.
Brothers I need to know the options. If its flat, I would like to know where exactly and the cost. Unfortnately living abroad it is very difficult to visit all options.
@Imtiaz, thanks for such a detailed answer, so lets say its 0.7%, do you have any options in mind. The issue is that I need that amount on monthly basis. I do understand that if I purchase a piece of land the price might increase with the rate of 12% annually but I won't be getting anything on monthly basis.
Flats can yield 0.7% profit? do we have any such option in Islamabad?
Dear AKH
In Rawalpindi, there are many options in DHAs and BTs.
In BT phase 1-6, better options exist. An apartment will cost you Rs 55 to 60 and rent would be at least 30,000 per month.
Last month a shop was offered to me at 75 lacs and already rented at 45,000 in civic centre. Well that shop was an isolated case as owner wanted money in emergency.
My 2 cents:
Always buy in high value area and always rent to big boys you you will never have problem with renters.
In BT phase-8 good options also available. Safari homes/Villas give good return and there is NO property tax both in BT and DHA.
DO NOT opt for any commercial in cantt or RDA as they are murderers on taxes.
Dear AKH, Imtiaz sahib and Qayoom sahib has explained you beautifully and in ultimate manner.... Keep 0.5% in your mind not 0.7%.......
I would suggest you to buy plot if you can keep the ball rolling without rent...... For that purpose invest in PLOTS suggested by Nadeem sahib.....
If you need rent anyway, then I would suggest you shop because there are no maintenance charges etc and can enjoy rent peacefully......
Dear AKH,
Plots are always better and safe option in real estate.Last year month of Sep i purchased 10 marla plot in 400 series in sector F-1 phase-8.I paid 45 plot+ 1.5 transfer fee +45k dealer=46.95 lakh and now i have offer 53 lakh means 6 lakh profit but i will not sell because my planning to construct house in future.
In same amount if you purchase shop or apartment then rent will be 20 to 23k means in one year=2.4 to 2.76 lakh.
If you like rent in every month then go to shops in CDA sectors in this amount G-13,15 or Bahria Safari homes single story in C or F sector.Price tag is 5 to 6 million depend on condition and location rent is 22 to 30k.
Shops or apartments are good for those people who can not work like handicapped or retired or some overseas who always afraid to invest in plots.
Regards
We are making a 10 marla home, with full open basement in E block in Bahria phase-8, 2nd roof done.
Dealers who are watching us working there, suggesting to put on sale at minimum of 30 lacs profit.
If one can take pressure of construction and can deal with contractors problem, making/selling house in phase8 is also very lucrative.
Phase8 construction activity is at booming level.
Our plot alone was bought at 44 and now more than 55 lacs.
"Shops or apartments are good for those people who can not work like handicapped or retired or some overseas who always afraid to invest in plots"
May be I am in the category of those overseas pakistanis :)
As a matter of the facts, increase in plot price at same location also increases the price of the house/constructed unit.
House = Plot + Construction
Added benefits
- monthly rent
- profit on construction (normally some standard fixed amount)
Extra requirements
- time and finance required to construct
All have different priorities, some like to construct at their own for quality and style as per their taste and to save the profit too of constructed units. Some like to save the hassle and buy already constructed.
Some of the biggest margins are on selling constructed units that includes profit on (i) appreciated plot price, (ii) profit from construction and (iii) it could be held up for some time to get the rent incoming.
It really depends on individuals' priorities!
Currently the best option, is to buy a shop (at front) in Defense Residency -Islamabad on GT road in DHA2. It will give you a regular income of 30-40K Rps and also your investment will appreciate. A very good location and secure also.
@ Abodul Qayyum sahib ! Buying a shop or house to rent seems to be the better option , as zakaat is not applicable on the principle amount; where as one has to pay zakaat every year if one keeps a plot for trading for multiple yrs.
Plus any idea about property tax on commercial property in CDA sectors, is it same like in CANT????
If budget isn’t an issue which CDA sector is better as far as ROI is concerned. Any comments on DHA residency and shops in malls? (i.e giga mall pros/cons)
Asif Sb.
Yes, buying & keeping an investment plot is bound for Zakaat every year whereas a shop is considered Zakaat payable on the rental income (some Ulemas have different point of view, though).
In CDA, as elite class himself gets affected, the taxes are not on par to the Cantt property (this is my personal experience as well, by the way). In cantt taxes are higher because of retired brass & so many other tax-waiver residents (among them I am all agreed with widows). Only the private residents pay for all elite class in cantt areas.
In DAH/BT, no state tax is payable, as of now but the govt “baboos” are readying up to put their teeth on this domain for quite some time. So far no success on the strong opposition of DHA/BT & the similar who provide all facilities from the societies resources and no govt bound expenditure at all.
In DHA/BT, there are monthly charges for cleanliness, garbage collection, security and so many other services. This amount is minimal, only few 1000s per month.
Giga mall is good as well as residency and Jinnah boulevard commercials in DHA-2 but the commercials in internal blocks are not worthy for rental as of now, mainly on the poor designs and being less attractive for shoppers.
See, in Chalklala scheme-3, there are only 900 plots and business is out of roof. Think of DHA-2 now having 9000 plots?
In CDA, G-11/13/14/F-11/F-10 are good for ROI. BT phase-8 could not be recommended as of now on the over supplied commercials versus residency!
Currently in Pindi, BT phase 1-6 commercial (civic center) is highest in ROI. Others like police foundations, PWD and several others are good for rental but there is spaghetti there and renter’s problem munch more that the DHA/BTs
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