I am planning to build a 1 Kanal house in Bahria Town Phase 8 for rental income. My goal is to become financially free and I would like to live on rental income which I can generate from the 1 Kanal home.
What income can I expect per month? How achievable it is?
Your real income will be “rent minus maintenance” so the most important thing is to build a house that has the lowest maintenance cost possible. This means when finishing the grey structure whatever you select should be biased towards maintenance and not looks.
Also, when renting always do proper legal agreement so that it is enforceable by law in worst case scenario. Do proper meeting with tenants before giving house to them. After tenants have moved in, do visit the house every 3 months to see if all looks good.
In terms of rental values, you can easily use zameen.com to get an idea about the market rate.
Best of luck!
I calculate rent of a property by multiplying the price of the unit with 0.004. That gives me 0.4% percent of the amount. I don’t how others calculate but correct me if I am wrong.
Toofan sb, you are quite right in calculation as generally speaking:
For every 1 crore invited in constructed house you are expected to get 40 - 45 hazar per month in projects that still have juice left in terms of appreciation (BTs, CDAs atc.).
For matured projects where land/house appreciation will be less, it can easily touch 50+.
For apartments it can go to 50-55, furnished ones can go to 60-65 per 1 crore. Apartments yield good monthly return but can give one a hard time to sell it on lump sum.
Outside the housing societies and CDAs, like Satellite Town and parts of ISB, open Abaadi, you can go up to 3 - 3.5 floors of building to have more income
Any individual can scale those numbers to calculate how much to Invest (X) to get specific monthly return (Y).
If you ask me, yes rental income is good, steady but times are fast changing, people are investing in Forex (please note Forex and Crypto are not equal, Crypto is 1 trading entity in Forex Basket). People with Bullet Proof Save Forex Trading easily get 7 - 10%, if you are a risk taker and can give time to trading, the monthly yield can easily be stretched to 35+ percent. (in this case just make sure when it falls, you have already made the exit).
Fall will not be like from 35+ to 0% in a second, it starts to come down gradually and than its up to the individual to pull out or wait and seek more risk for more return.
Man I have seen people with 1 Crore Property making 4000 per month and I have seen people with 2 lakh making 4000 per month. Its up to an individual which one they prefer …
Investing on residential property for rental income is not a good proposition. Rate of return is 4-6% per annum that becomes negative with high inflation. Plus your house gets deteriorated with mis-use over time, also depreciates in price the older it gets. Unless their is substantial increase in land price, you capital gain on house is negative to marginal.
A better option is to invest in commercial shop in a good project.
Another option is to invest in stock market and buy solid shares with high dividend. Some of them can give you 15-20% annual dividend.
Crypto and Forex, as suggested by Imtiaz, are not for average Joe. You may end-up loosing your hard-earned money. So avoid that.
My two cents!!!
Not sure about Crypto, but Forex (having Crypto as one possible option to trade in the overall basket) has something for every one.
Crypto is more volatile, either a Jackpot or Sharp Collapse.
Ones that like to play safe, trade the safest on tech stuff/companies, gold when its tide is upwards, and many more - take home 7 - 10% per month while retaining capital in your digital wallet. Yes its an investment aftrall and if Its Investment and Risk = 0, you are doing that all wrong.
Ones that like to play hard and party hard can go up to 35+ but are quite high risk. One can explore it with little amount lets say well, anything from 5000 - 25000 PKR or whatever to start with …
I agree with other respected members of this forum that building a residential property for rental purposes is probably not the best investment at the moment. I personally know somebody who did this in Bahria Town P4 and after 2 years decided to sell and get out. Since the owner was living overseas the tenants did not care much for the property and it was wrecked badly. I think investing in a commercial project is better but choosing the right commercial is difficult without local know how,
Instead of building a kanal house, better buy a couple of apartments in limelight areas of Islamabad and rent them on Air BnB. You can make a good income out of this.
Yes Arshad sb, in general Apartments can give better Renta yield. However, in time of financial emergency apartments are hard to liquidate unless one devalues them to quite some extent.
Moreover, Air BnB and alike can give quite good income but it’s short term and On and Off basis, requires high maintenance and in country like ours it always carries extra risk.
Its good to see that Airbnb is in discussion in Pakistan. I second imtiaz and others that investing in residential property for monthly return is not a good option, Rather buy a commercial land in suburb’s of Rawalpindi and Build a plaza over that and then rent out the shops.