Property Rentals on the Rise: Pakistan Property

Over the last two years, property prices have increased property prices have increased by 10 to 30%, while interest rates on home loans have increased by five percent. These two factors have inhibited residential sale and purchase in property Pakistan prices. As a result, demanded for rental properties has increased by 15 to 20% in the last two years and rents have increased by 30 to 35%. Although the annual rental rate of a property stood at three to five percent of the property's value two years ago, it now stands anywhere between four and seven percent.
If you are purchasing residential property Pakistan with the express purpose of renting it out, keep the following in mind: 

Houses 

• Select small to medium sized properties (200 to 500 square yards) in popular, secure residential areas because they are in higher demand, as a re properties located on main roads. 
• Look out for houses that can be divided into portions for higher rental yields.
• Choose houses that are well-maintained; you will be able to ask for a higher rent.

Apartments

• Apartments in complexes that are located on a corner plot facing a main road are preferable and yield higher rentals, as do apartments located on the first floor or second floor.
• Apartments in well-maintained and smaller complexes (with 25 to 50 units), usually have higher rentals compared to larger complexes (with 100 to 200 units)
• Although premium four-bedroom units may get you higher rentals, they are within the reach of many pockets; you are better off with a standard two- or three-bedroom apartment in a well maintained complex.
• Facilities including UPS', generators, overhead water storage tanks and windows grills are an added advantage.

Residentail Rising In Real Estate Pakistan

Image via WikipediaWhen the budget was announced this year, there was a good news and bad news for prospective property buyer in Sindh.
The good news was that Capital Value Tax(CVT) was reduced from 4% to 2%(However, from now on, CVT will be collected by provincial government, instead of the federal government when a property is purchased).
The bad news was that the provincial government increased the property rates in Sindh's valuation table, which translated into a substantial increase in property prices.
They valuation table divides area into different categories and assign rates based on size and location; rates apply to both plots and residential/commercial/industrial property.
Here is a look at two of the top residential categories:

Category A-1 includes some of the Karachi's most upmarket areas such as Bath Island, Clifton, DHA phases 1,11,V and phase V extension, as well Muhammad Ali Housing society and Sindhi Muslim Cooperative Housing Society.
In these areas rates for both empty and built up residential plots increased by 307.4%.

- Rates for empty plots increased by 11,205Rs per square yard(from 3.645 to 14,850Rs).

- Rates for built up plots increased by 17,430Rs per square yard(from 5,760 to 23100Rs).

Category I includes Abdullah Haroon Road, Burns Road, DHA phases IV, VI and VII, GUlshan-e-Iqbal Block 17, I.I Chudrigar Road, M.A Jinnah Road, North Nazimabad, and Queens Road.
In these areas rates for both empty and built up residential plots increased by 239.5%.
- Rates for empty plots increased by 6790Rs per square yard.

- Rates for built up plots increased by 8.370Rs per square yard.