Understanding Short Term Investment & Long Term Investment; What to Invest in 2011

What is Short Term Investment & Long Term Investment, What to Invest in 2011:
A property that is bought and resold within six to twelve months is referred to as a a short term investment in the real estate market, whereas a property held for three to five years and then sold is referred to as a long-term investment.
Here is a closer look at the real estate trends that have emerged in Pakistan since 1995:

• 1995-2000: Investment was primarily long-term and property prices appreciated by nearly 60 to 70%.
• 2000-2005: Long term investment continued and investors enjoyed heavier appreciations as the economic landscape improved.
• 2006-Present: The short-term investment term began in 2006, when an unstable economy discouraged investors from investing in Pakistan; they opted for the Middle East instead. The people who choose to invest in Pakistan did so only for short periods of time (from six months to a year), after which they either made other short term investments to stopped investing in Pakistan altogether.

The effect of short-term investments in the real estate market include:

• Investors now prefer to sell their property as soon as it's value increase by six to seven percent; when prices decrease by even one percent, they purchase new properties.
• Continuous short-term investments eventually affect the long term scenario of the real estate market. Ideally, property appreciation at the end of a five-year period should be 25 to 30%. However, if short-term investment continuous, appreciation will remain significantly low, reaching only three to four percent.
• Ultimately, short term investments hamper the growth of the real estate sector and result in undervaluing the net worthy of the property. 

To discourage this trend, the Government should introduce value discount incentives for investors who hold on to properties for at least five years. This will encourage long-term investments, eventually rectify the problem and improve the current state of the real estate market.

Building Value In Your Property:Increase The Value Of Your Property

An emerging trend in real estate is constructing houses with value added features and using materials that are of a better quality, especially when reselling the property in question is a distinct possibility.
The following are some architectural measures and construction materials that can enhance the quality of your house's structure, making it stronger, more durable, easy to maintain and consequently increase its value.
1) Water Proofing: Nitrogen chemical, sealants and plastic sheets are used to water proof the plinth level at the time the foundation is being laid; sulphate resistant cement can also be used in foundations. Water proof paint used in overhead and underground water tanks can dramatically reduce water seepage and play a vital role in increasing the life of a building.
2) Insulation: Constructing with hollow blocks instead of regular bricks provides good insulation; they keep the structure cool and reduce air-conditioning related energy bills significantly.
3) Plumbing: Galvanized iron pipes are stronger and more durable compared to plastic ones. Remember it is easier to maintain pipes that are not concealed.
4) Roof: Laying tiles on the surface of the roof makes it a useable space and also provides heat proofing. Brick tiles are economical and ideal for this purpose as they are heat and water resistant and easy to maintain. If you have a higher budget, consider using marble tiles which also have a cooling effect.
5) Exterior: Embellishing the exterior with bricks, texture, and uncut maintenance free as opposed to painted walls.
6) Landscaping: Explore the possibility of 'hard' landscaping in the form of partially tiled yards and courtyards; these are easier and less expensive to maintain compared to a full fledged lawn.

DHA business zone:Business Hub

Located on Beach Avenue in Defense Phase VIII, the DHA Business Zone is currently under planning and promises to be a lucrative opportunities for investors. The development of the Business Zone is expected to begin in the last quarter of 2011 and experts in the real estate sector think that it will be an ideal venue for big brands and organizations looking for commercial office space or retail outlets that conform to international standards.
Here are the salient features for potential investors:

• Unlike other commercial areas in DHA, where the size of the plots are limited to 100 or 200 sq yds, the DHA business Zone offers plots measuring 333,666 and 5,000 sq yds. The Zone has a total of 54 plots: 19 plots measure 333 sq yds, 27 plots measure 666 sq yds and eight plot measure 5,000 sq yds.
• Plot prices range between Rs. 125,000 and 150,000 per sq yd; prices are expected to rise when development begins and the demand for property goes up.
• Building bylaws in the Zone differ from other commercial areas in DHA and include:
• Priority to office buildings.
• Retail outlets and restaurants may only be established on the ground and first floors of each building.
• Plots cannot be used for residential or educational purposes.
• Buildings must be disabled accessible and centrally air-conditioned.
• Minimum sizes for shops are 200 sq ft with a minimum width of 12 ft.
• Minimum sizes for office spaces are 1,000 sq ft.
• The Floor Area Ratio (FAR) is 1:5 which means that the built up area of a building can be five times as much the plot size. For example, a building on a 333 sq yd plot can have a built up area of 1,665 sq yds.
• Only plot measuring 5,000 sq yds and above can be bifurcated into two separate plots of the same size.