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.

Obtaining The Right Value Assessment: Property Prices

One of the most common misconceptions that property owners have is that property prices will keep rising regardless of the effect on the market of factors such as the political and economic situation in the country. The reality is that after every boom in the property market, property prices go through a period of 'correction'; they adjust to actual values rather then speculative ones; the span of such corrections can last for a very long time.
As a result, most property owners have no idea what the current market values of their property is and end up consulting a number of estate agents who in turn provide their own assessments of the property's value. In most cases there is a wide gap in the estimates provided by different estate agents, which adds to the confusion of the property owner in terms of what price to demand and they end up listing their property with the estate agent who quoted the highest value. Yet, a number of estate agents deliberately and incorrectly quote higher prices just to ensure that the owner lists the property with them. This is a unethical practice which does nothing more than make property owners happy for a short period of time.
1) Ask the estate agent to give the current property price assessment on company letterhead; but be prepared to pay a fee for this service.
2) If you plan to have an assessment done from different estate agents, do not look only at the highest value; rather consider the lowest assessment given to determine the actual value of the property.
3) Any estimate that is over two to three years old is no longer valid as property prices fluctuate depending on a number of factors which in turn end up keeping investors away.