Selling all property to buy a single home

[iqbal.a.alvi (Invest&Repeat)]

Salam. I am looking for advice so please read the full post and reply accordingly.

We have been living on rent for almost 15+years. During this time, we bought a small flat and 2 plots and now that their value is good enough, we are planning to sell all the property and buy a home so that we can break the vicious cycle of paying rent.

Recently, we entered a part payment agreement for our flat … but with all the instability in the country and political situation and the hints that Pakistan might go towards bankruptcy, should we sell the plots as well and buy a home? The process will of course take a few months and I am scared that the money we are getting from selling the flat will somehow get ceased in the banks if the country goes bankrupt. You may call me stupid to think like this, but I am not finance or economics or real estate pro.

I need serious advice on how to approach this situation. Should I hold the plots and money from the flat for now or be fast in selling the plots too and buy the single home we are looking for before the situation worsens.

[Its_ImtiaX_88]

A few points to contextualize

• PAk had a worst context back in May-98, Nuclear Tests that had the possibility of PAK going bankrupt due to economic sanctions, frozen accounts and certain bans on exports. This are not ideal but much less worse than that.

• Panic is more due to Sri Lanka’s recent bankruptcy, with IMF program stalled and KSA/UAE/PRC/ADB needing IMF endorsement to finance it put PAK reseves under heavy stress.

• Now with Petro increased by PKR 30, next tranche of 900M USD will he released and that will follow aforementioned countries to finance their part.

• In worst case scenario, it’s the foreign currency accounts that get temporarily frozen (to stop sudden outflow). Freezing local currency doesn’t matter and further strangle the local economy.

• PAK Army, biggest stakeholder in system, can never afford that due to defense imports and all other expenses.

• This is like, at times we individually run the riks of going out of finances as the month end approaches but with salary/returned amounts give a life for next month and so on.

Basic Point

• No, local currency accounts are highly unlikely to be frozen. It’s the USD primarily that matters and worst case scenario have to be applied to foreign currency, more specifically USD.

• Budget is around, IMF program apparently going to get resumed (hint: Petro increase that was the only hurdle). I wouldn’t be surprise if in coming days PKR and PSX gain a bit!

[iqbal.a.alvi (Invest&Repeat)]

Thanks for your reply, sir. So you are saying that the likelihood of Pakistan bankrupting is low. And that the money we have in the local currency would not be affected and will be safe?

And what is your advice on holding or selling the plots?
Another option is to use the money we get from the flat to buy another flat or plot so that the money is safe.

[Its_ImtiaX_88]

• Yes, bankruptcy was a probability also it’s not happening is a probability. We live in a world of probabloties. After IMF deal that risk has faded. If future risk, IMF would not had agreed to release next traance and possible additional 2B. With budget in eslry June it will fade away, so to speak for Fiscal Year 2022-23, as things stand now.

• Yes, in such cases, if account to be frozen that happens to foreign currency accounts not the local. We need to have reserrves in USD and people need PKRs to spend and not fully strangle the economy. External world don’t need any of our PKR.

• Well as far as avoiding rental to get a house it’s always a good idea. Rest, I am not much aware of your real estate assets and their future prospects to sell or retain …

[yousafnoor (Abdul Qayyum)]

Dear sir
This govt brought with a purpose and will be asked to fulfil all promises they have made. These are now obvious if you follow the Americans statements on international media.
1: Recognise Israel
2: Give bases so that Afghan could be killed.
3: Allow airspaces to USA to bomb Afghans.
4, Slowdown CEPEC & eventually schedule completion for decades not years.
5: Stop talking Kashmir & surrender to India.
Do all above in such a way that incoming govt not able to change the agreements.
Now if they do not do what was agreed before regime change, Pak economy will be in termoil & everything will be down.
We will need min 1000 Rs to buy even a single time food…
If they do all what was agreed then PKR will get some life & may reverse down to 170 or do but if they do not fulfill then the picture is too bleek even with IMF some loan.
So better sell all & get a house before situation get worsened at least come out from the vicious circle as you say…
Fazloo had already said to make India & Pak as a confideration and Pak being under Fazloo, Marium, Bugtee, Daward, achac zaiees . .
Kia Gul khelain ge only Allah Knows, sir?
Ye mafia tuo bhag jae ga jidhur pehle gas they lekin hamara kia ho ga…
Allah Pak Karam Furmain…Aameen.
Buy a house sir before it is too late …
Before it was strong understanding that establishment will rescue us but now it is obvious after this mafia is brought on helm…

[iqbal.a.alvi (Invest&Repeat)]

I am fully aware of the situation and how these corrupts are again eating our country alive.

That’s what I am planning to do. But buying a house takes time and that’s what worrying me. THat’s why I explained the situation and asked for advice.

[sohail.ahmed1 (Sohail Khan)]

Brother Alvi,

Please remember living on rent is bringing you freedom to choose and change, The primary house that you will built by selling all your assets will not bring you any more benefit of appreciation or income generation as that will be your requirement to live in there and not to sell for profit making, it will become your liability and not your asset.

However the other properties you mentioned in your post are your asset and can be liquidate to put in business when ever required or kept for further appreciation.

The rent you will save by buying your own house will be negligible compare to what you can earn by appreciating in value of plots and flat.

If you do not have more sources of income or funds to invest in business, then continue on rent and keep other properties for rainy season.

[raheel.haider9 (raheel)]

I think you should go for single home as the value of plots will not increase in case of bankruptcy or bad economic conditions while rate of constructions items and that of homes will increase
PS: i wanna comment that US do not want our bases to kill afghans if they want they have bases in Central Asian Muslim states and all over Middle East. They have fleets standing in the gulf so we should stop selling this CHooran & Without good relations with our neighbors specially India we cannot thrive economically ever this is the thing every Pakistani should understand

[isloo1]

@iqbal.a.alvi dear, you are partially right. Pakistan’s economy is in critical condition, but with the new regime, I have good hopes, they have the ability and past track record to save the day for us.

So my advice would be to buy the house now if you can. Construction cost is going up by the day, so the price parity between empty plot and constructed house will increase with every passing day. You’ll never regret buying your own home.

But make sure you make sale and purchase deals simultaneously, otherwise, time lag might throw house prices out of your reach.

Again, for the economy, don’t worry, it is in good hands. Take my words for it.

[sohail.ahmed1 (Sohail Khan)]

Here also same lateefa, economy is in good hands

So why we do not become Singapore in last 35 years as economy was in same good hands… ???

[Its_ImtiaX_88]

GDP projectile!

35 years! Never forget

• AK Niazi (Surrenderd in Dhaka)
• IK Niazi (Surrendered in Kashmir)

Plans for Next Tenure

Pakistan could split into 3 parts & also lose its nuclear deterrent...