Purchasing a vacant piece of land has been a lucrative investment for many years in the real estate industry of Pakistan. Some investors take this as an opportunity to start from scratch and build a structure on it to sell it at a profit, while others let the land remain as is and rely on the fact that a land’s value increases with time. Besides glorifying profit, we’ve written this blog to help novice investors and property seekers make an informed decision by having prior knowledge of the pros and cons of buying land in Pakistan.
Here are Some Rarely Discussed Pros and Cons of Buying Land in Pakistan
The best thing about investing in land is that the value multiplies significantly over the years, and risks are relatively lower than other purchases in the property market. To begin with, the pros and cons of buying land in Pakistan are many, especially for buyers who think beyond expanding their property portfolio, but we’ll mention only the most important ones here:
- Appreciation and Affordability
- Zoning, Taxes, and Laws
- Freedom of Construction
- Supply and Demand
- Direct Ownership
- Capital and Investment
Appreciation and Affordability
Purchasing a vacant land in Pakistan is relatively easier than investing in residential and commercial units. However, plots vary in location, size, and category, so the price meter may go up at a much faster pace than the rates of a same-sized house or office building. According to real estate experts, the price of plots is highly dependent on the development that takes place in its surrounding area, let’s say if important buildings, malls, and public transport is present nearby. This will ensure a hike in the market price.
Additionally, investing in land doesn’t take a toll on your pocket due to lower maintenance costs, unlike other properties that require frequent renovations and fixes. One of the major pluses about owning land in Pakistan is that it is much easier to manage remotely than residential or commercial properties – no matter where the actual owner lives. Moreover, vacant plots in reputed housing societies face lesser-to-no incidents of vandalism and sabotage, which works as a magnet for every investor.
Zoning, Taxes, and Laws
Do you think buying land in Pakistan is the safest investment? Think again! Coming across cases and stories of land encroachment is not something new to our ears. In some scenarios, a landowner wins the case by completing the legal formalities, while in others, the legal rights of the owner are subdued by the encroachers. The latter cases mostly result in litigation issues, unwanted court hearings, and worst-case scenario, the land being taken over by the government as an act of compulsory acquisition.
On the other hand, zoning regulations are also a significant drawback of buying land in Pakistan. Typically, zoning places limitations on a piece of property, and it determines what you are allowed to do with the property. In a nutshell, you might have the freedom to construct how you want, but not what you want.
Additionally, taxes and approvals are also major concerns in this regard. However, the Government of Pakistan has already found a quick fix for managing your taxes by launching FBR’s Tax Asaan App.
On a side note, are you planning to sell your property anytime soon? Let our step-by-step guide to selling property in Pakistan help you out.
Freedom of Construction
Every local real estate market in Pakistan has its own set of pros and cons of buying land, but all of them have one thing in common: it is the opportunity to build and expand. Landowners have all the freedom to build a structure according to their needs, taking into consideration the zoning regulations. The subdivision of structure is in complete control of the owner after a required foresight. However, it is necessary to determine the best use of the property by studying the neighbourhood.
Supply and Demand
Purchasing land in Pakistan has always been a popular option for several decades due to the safety of the investment. Owing to the popularity factor, the demand might have decreased at times but has never regressed. So, even with the abundant availability of various properties and other avenues for investment, people tend to exchange their hard-earned money with land ownership papers. This intense popularity and increased demand have escalated the number of buyers, but the supply of land is still limited.
Unlike other assets such as office buildings, residential units, and commercial establishments, the prices of land in Pakistan haven’t experienced dramatic or volatile changes considering the various economic trends the country has witnessed over the years.
Furthermore, people investing in the land do not need to worry since Zameen.com has given a whole new level of comfort to sellers, agents, investors, and land seekers in Pakistan by introducing Zameen Helpline and Plot Finder. With such services now being in anyone’s reach, buying land has become easier than ever before.
Ownership Process
We cannot afford to mention the ownership factor while discussing the lesser-known pros and cons of buying land in Pakistan. Land ownership process is entirely hassle-free since buyers typically pay with full cash, which enables them to take charge of direct ownership. There are no lengthy and complicated processes in the possession process, even if the land is being bought at partial payments or installments. Buyers can be at peace outright after purchasing a plot knowing the fact that land doesn’t wear out over time like buildings.
On the plus side, an empty plot is far easier to cash if need be.
Capital Investment and Income
We cannot deny the fact that owning land in Pakistan is usually cheaper in terms of long-term investment for the fact that property taxes and other charges are often lower as compared to developed land. We can also not ignore the fact that developing vacant land requires a great amount of money. So, those with fewer savings at their end will have to sell their possession eventually since they do not have adequate options to develop the land further.
Without rental income, landowners cannot even enjoy monthly cash flow on undeveloped land until or unless they get creative to cover the expenses. Let’s take “using rights” and “selling parcel” as an example – landowners can sell a parcel of their land or give rights to other investors to enjoy some income for a while until they find another use for the plot in the meantime.
This was our take on the various pros and cons of investing in land in Pakistan. We had recently discussed whether properties near railway tracks are worthy of investment. Like many other people, you can also take assistance from our guide on buying properties on a main road.
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