I have an investor willing to inject around PKR 5 million in Islamabad’s rental market. I have been suggesting him to put his investment in a commercial property. What do you experts think? Is the commercial rental market in Islamabad a safe investment? Or is the residential rental market a better bet? We’re open to suggestions regarding good investment opportunities with this capital. Another thing, what is the current situation of the rental market in Islamabad with the ongoing COVID-19 pandemic?
On ground commercials should only be considered
Thank you for your advice Khalid sb. However, would you be kind enough to suggest some of the on-ground commercials that you deem fit as profitable investments?
Dear Hasham,
You may consider physical existence properties in G-13, G-15 and New City Wah in this budget. Never go for the commercial projects which only exists in dreams. Only go for commercial properties you can touch and feel physically and give yourself on rent or in future you may establish your own business.
You may also get a good rental return on apartments. You may research on G-10, G-11 PHA Flats or BT Phase 4 Civic center area apartments.
Never buy the apartment / shop etc. Which only exists in the documents the key is to buy on ground property.
Thank you for these great suggestions Khalid sb. I think you are right about being wary of the projects that haven’t yet materialised. One can never be sure of their prospects and value. I will talk about these options with my investor. As for the apartment rentals in Islamabad, it seems to be a very cut-throat market. You mentioned PHA flats. Are they really a sound investment? I wonder if, like other government projects, it’s just a lot of hassle?
1st question is, is anything available in 5million in Isb?
Yes it does, sir
You can have a basement shop in F-11 Markaz.
But you have to increase from 62 to 65 Lacs.
Rent would be around 25,000 per month with 10% annual increase.
If 5 mil is absolute limit, I say a 1 or possibly 2 bed apartment (though rare) in Gulberg Greens (somewhere between 600 - 650 sq. ft.) in range of 45+ lakh is best bet for me.
Rental yeild in range 22 - 25 per month. Getting it furnished (6 to 9 lakh) can increase the rent upto 30 - 35 range. However, furnished ones are mostly acquired for shorter durstion of time (1 - 3 months frame typically).
both options shared by AQ Sab and Imtiaz sab seems very good, let me add few more options:
- B-17 ready possession shops on ground portion, only in developed blocks.
- Faisal town ground level shops again in developed blocks.
- D-12 markaz lower ground shops.
In Shaa Allah, I will assist tonight on the query of respectable member.
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I have seen flats for sale in DHA 2 (Defence residency etc.) within your price range. You can search for sale flats in DHA 2 on zameen.com and also use the "Rent"option to find out possible rents/returns.
AOA, I explore this topic further and found following few options, will appreciate if experts shed light on most suitable ones among all, keeping in view the property value appreciation also.
- PHA flats in G-11/4, 3 BED , around 80-95, rental income - 35K, too old, not sure what is the life span left and if possible to sell out in future.
- Bharia phase 4 civic center various private buildings, 2 bed, around 60-65, rental income 30-35 k, used mainly for company employees, private owners, doubt full on service and maintenance.
- Bahria Heights phase 1 (serviced and managed by Bahria itself), noticed it is also in big demand for rentals, 1 bed costing around 95-90 with rental value of 45k if unfurnished and 65k if furnished, 2 bed around 155-165 with rental income of 60 if unfurnished and up to 100k if furnished.
Suhail sb
Do not go for flats for rental income rather go for shops for rental.
Shop is an investment but an apartment is a liability.
Flat when vacated, it will give you heart attack on maintenance but a shop just repainting.
I do have flats, Alhamdolilla, in bahria civic center with good rental but now selling them, one by one, to convert in shops in the same civic center.
Yes Yousaf sb, but I feel personally and could be wrong that in country like Pakistan with huge population there is always increase in demand of residential properties resulting in inflating resale values on top. The flats percentage of rental is not bad if the resale is also gaining, what do you think.
Also flat is kind of big shop or office, the outside and common areas is any way responsibility of the building, you only to re-paint inside with few touch ups.
Suhail sb
My personal experience is against flat. I bought several in bahria civic center, still there with good rental income but, for example, one of them I bought at 63 Lacs 7 years before and now I am selling but hard to sell at even 65 Lacs!
I bought a shop at the same time & put it on rent…now shop is in net profit of at least 20 Lacs.
Civic center is very hot & rent is also very good of both residential & commercial but for long term benifits shop is the best option.
Flats after renter leave may have serious damage to the drain system & sometime you need to do a massive correction as they adopt easy ways to clear blockages like pouring acids in high amount damaging concealed drainage.
Plus so many other damaged to wood work and washroom tiles & fixtures…
Plus in Pakistan, no one even the reputable constructors use proper stepwise damp sealing on the overall drainage like regulations in the developed countries & flats develop overheard leakages with the passage of time.
I have seen in DHA-2 big towers water ingress everywhere with big developers. You can see even from outside on the main structure of the towers in DHA-2.
Plus we know that old houses sell on plot price only…that explains: Plot appreciated organically being an investment but house lost its money value being a liability…
If residential is a house with plot ownership no problem as you have option to re-construct the house but with an apartment being inside the plaza???
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Thank you ! appreciate your input always.
in twin cities flats dont appreciate well, my friend bought a flat in G-11/3 10 years ago for 55 lac, at that time in G-11 7 marla plot was around 45 lac. Now that plot is more than 2.3 crore but the price is flat is around 95-100lac. Even F-11 and F-10 flats are not rising. Totally agree with Qayum sab buy a shop instead of flat. No maintenance, good appreciation, good rent less hassle.
Have been dedicated discussion about Flat vs Plot based Investment, will reiterate the main points. Yes, Apartments do give good rental yield but hard to liquidate on lumpsum.
However, instead of a generalised statement, need to see it more objectively, point by point. Let me be the devil’s advocate.
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Apartments do yield excellent rental income sometimes beyond 0.005 to 0.007 per month of investment.
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Apartments being quite hot in KHI (like INDIA) had been a No Go in Punjab but trends are changing.
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Buy on lumpsum might not be lucrative book and on installments (pre-launch) can get someone a good deal. I have seen people booked at pre-launch and made exit at right time with handsome profit.
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Apartment based living can give you the best possible life style in that particular society. For Example a Person with a 1 Bed Apartment (35 - 45 Lakh on Average) in Gulberg Greens can enjoy same infrastructure, greenery, security and amenities that will be enjoyed by someone having a 4 Kanal Farm House worth 6+ Cror just for the land.
Times are changing, yes still hard to liquidate but it depends on project to projects. I still believe, Apartments can be quite profitable and best choice, if:
- Main purpose is Rental Yield
- Book at pre-launch and exit nearing ti possession
- One likes to enjoy quality life in best part of particular housing project.
My picks: Greens, Top City projects will gain further traction.
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Capital gain and rental appreciation of Apartments are dependent on 3 Major factors.
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Location
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Design
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maintenance
Residential apartments are feasible in communities like DHA and Bahria town appreciation in Karakoram encalve F-11 was quite good
However yes from an investors point of view commercials are always most valued