Agents’ Take: What are the essential few things that first-time property buyers should be aware of?

REPUTED REAL ESTATE AGENTS FROM ISLAMABAD, LAHORE, KARACHI, PESHAWAR, GUJRANWALA, MULTAN, SAHIWAL AND NAWABSHAH GIVE US THEIR TAKE ON THE PROPERTY SECTOR

MAJOR (R) TARIQ MASOOD, TM ASSOCIATES, ISLAMABAD

The most important factor in property investment is the property’s location. I have come across some buyers who are tempted by lower property rates and they fail to consider the location of the property in question. A property with an unfavourable location and improper reach is difficult to sell later and it makes for a bad investment. So I always tell my clients to buy the property that has a central location.

A wise property investment is done according to the market’s situation. The rule of thumb is to buy when the market is down and sell when the market is up. Many first-time property buyers unfortunately sell their property out of need instead of with the aim of getting returns from a market high. The lack of holding power is the reason why many new real estate investors and buyers fail to reap the vast benefits that are particular to real estate sector.

Another bit of advice is that first-time buyers should avoid real estate scams by always dealing with registered real estate agents. They should also ask for the relevant documentation before signing any deal, verify these documents from the relevant department, and perhaps most important of all, never make a cash payment.

INVESTMENT TIP

As a registered real estate agent of both Bahria Town and DHA, I have been able to work closely with these top two developers of Pakistan. There are pros and cons of making an investment with either of these developers, but the fact remains that for stable returns and secure real estate investments, the projects of Bahria Town and DHA are the best available options for first-time property buyers.

If you have a relatively small budget, I would recommend Bahria Enclave, Bahria Town Phase 8 and Phase 8 Extension. All of Bahria Town’s projects in Islamabad are primed to give returns to the investors in the near future. In DHA Islamabad, Sectors L, M and P in Phase II present good short-term investment opportunities. For medium- to long-term investments, I would recommend DHA Phase IV to first-time property buyers.

MUNAWAR HUSSAIN, SULTAN SONS ASSOCIATES, LAHORE

For real estate investment, whether being made for the first time or as a regular affair, investors should choose the projects that are in the development phase. For instance, when investing in DHA Lahore, plots in developed phases do not promise returns as handsome as those offered by plots in under-development phases. In addition to that, I always tell my clients to be very choosy about the location of the property they intend to buy. The price of a plot in a fine location might be high, but the rate of appreciation would also be comparably quick. A good plot is just as easy to sell as it is difficult to buy.

While investing in real estate, first-time property buyers should also be careful about the project’s developer. Any real estate project backed by a single person is always going to be a risky one. By comparison, a project that is backed by a reputed organisation that has a portfolio of real estate projects in various cities is always a better option. Real estate development organisations working on hierarchy principles also protect their investors’ rights.

To ensure investment security, property buyers should always insist on arranging a one-on-one meeting with the seller. Knowing the seller’s demands would keep you from paying more than the market rate as well as the seller’s quoted price. To find out market rates, nothing works better than a market survey and no smart real estate investor begins without first surveying the market.

WHERE TO INVEST IN LAHORE

In Lahore, no project is a match for DHA when it comes to real estate investment. For investors with a budget around 10 million, I recommend Phase VII, and for an investment amount around 15 million, Phase VI is a good option. For long term investment, Phases VIII and IX could also be an option for some but the development status of these phases isn’t clear. There could be a huge profit margin in Phase VIII plots but that investment will take many years to mature.

BAQUIR ABBAAS, HMA CORPORATION, KARACHI

Before considering any plot or property to buy, first-time property buyers should always do a market survey in order to get a general idea about property rates in different areas. Missing this step could cause them to overpay for property and they would end up having to wait for a frustratingly long time to reap any benefits from their investment.

The next step is to keep their investments secure by staying as far away as possible from fraudulent estate agents. Talking to more than one agent and dealing through a registered agent should be the way to go about it. In Karachi, the real estate agents registered with their respective authorities are bound to work on fair principles, since they would otherwise be questioned by the elected members of the authority and their survival in the market would become very difficult.

Dealing with a well-reputed real estate agent can also keep first-time buyers safe from all sorts of real estate-related scams since a good agent knows which authority or department should be contacted to verify the documents of any given property. Normally, real estate agents do not charge extra to verify property documents, but if an agent does charge for it, it shouldn’t be a big deal because they are basically helping you make sure your hard-earned money doesn’t go down the drain.

INVESTMENT TIP

Being an agent dealing in DHA Karachi, I would recommend DHA and Clifton to first-time real estate investors since I know that these developments are completely secure for buying property. The construction by-laws are strictly followed in Karachi and living there is no less than a dream shared by many families in Pakistan. Honestly speaking, the demand for property in DHA Karachi and Clifton is the main reason why property investment in these areas continues to have the charm it does, and this charm is unlikely to fade anytime soon.

KASHIF JAVAID, ADAMJEE ESTATE, GUJRANWALA

Investment security is the biggest concern for first-time property buyers, and this concern is best addressed by well-known real estate developers. The rush created by newly launched housing projects introduces such a frenzy in the market that many people end up making a bad investment move by buying files and forms in projects that aren’t being developed by an established developer. So my strong recommendation to first-time property buyers would be not to invest in projects by relatively new developers.

The housing projects backed by full-fledged organisations should be preferred over those backed by a single person. The established real estate organisations work on set principles where the interest of investors are always protected. Buying property in projects of reputed developers shouldn’t be a problem since their property payment, transfer and allotment processes are very simple and the agents registered with these authorities walk their clients through the process.

If a first-time buyer is more inclined to invest in files instead of plots, they should first confirm if the respective housing project has acquired 100% of the land for their project.

INVESTMENT TIP

DHA has acquired almost 90% of the land it requires for its Gujranwala project. The acquisition of land has invited great interest from real estate investors. The survey team has also started its work at the site and it is expected that Phase I of DHA Gujranwala would be done by the end of this year. So anyone looking to invest in Gujranwala should go for DHA.

The face of Gujranwala’s real estate sector is currently being shaped by DHA. Early birds will be able to make good profits and since DHA Gujranwala is a chapter of DHA Lahore, I would recommend it to all real estate investors in the city.

ZAFAR IQBAL MUGHAL, SUNNY PROPERTY, MULTAN

The registry and transfer letter of any private property being considered by a first-time buyer should be verified with the respective patwari of the area. The fard of every property sold is registered with the land development authority, and a patwari visits the site to confirm if the khatooni and khewat number is the same as the one mentioned in the documents.

First-time property buyers should be aware of these things, and the fact that they can be verified from the local patwarkhana. The owner of the property should produce these documents to show that he or she is the rightful owner of the property being sold.

Buyers should always seek their estate agents’ help with this information, and they should expect the agents to help verify these documents. The education of first-time property buyers is also very important, because the chances of being scammed are high otherwise.

INVESTMENT TIP

The best place to invest in Multan is WAPDA Town Phase III, and the success and returns in the first two phases of the project are a testament to this fact. The per-marla rate of plots in WAPDA Town Phase III is currently PKR 140,000. The balloting of Phase III is expected in the beginning of the second half of 2015. As soon as balloting is done, I expect the per-marla rate to climb to PKR 250,000. So for investment in Multan, my recommendation would be WAPDA Town Phase III.

ALI KHAN BUNGUSH, SAOOD PROPERTY, PESHAWAR

A market survey is the first step to take when buying property. Many dealers in Pakistan are used to selling certain properties only to get their commission, and if you step in without having done your market survey, you are highly likely to end up with a bad investment deal.

Performing a survey of the market will not only give you an idea about the market rates but will also allow you to determine if the plot or house you want to buy is south-open or north-open, which is very important in the case of Peshawar since people here prefer to buy property that faces the Holy Kaa’ba.

Visiting the Peshawar Development Authority office can help you figure out if the property you have chosen is south-open or not. The value of north-open property in Peshawar is cheaper by at least PKR 500,000, and its demand is also limited.

INVESTMENT TIP

In case of Peshawar, real estate investment should always be made in projects approved by the Government of Pakistan, since there is no future for real estate projects of private developers in this province in my opinion, given the security situation.

Because of the recent announcement made by the Government of Pakistan about the cancellation of ID cards of Afghans, the value of the property they owned is dropping quickly. According to the latest announcement made by the government in national news, their IDs will be blocked by December 2015, so they have to sell their properties before that time.

The value of property owned by Afghans has already dropped by 60% and by the end of this year, I expect a further price drop of another 50%. So, anyone looking to buy some very precious property in Hayatabad, Peshawar at incredibly low rates, I would recommend them to be ready to make the move in the fourth quarter of 2015.

NADEEM SHAMS, SHAMS ASSOCIATES, SAHIWAL

The demand for property in any locality determines the market trends. Surveying the market and visiting various housing projects is the best way for first-time buyers to determine which project would the best to bet for their money.

After deciding on the project that sounds the most promising for investment, the property documents should be verified with the respective authority. The complications involved in patwari-related matters are best dealt with through real estate agents who know the system inside out. So, choosing a well-reputed real estate agent is also key. First-time property buyers should meet more than one estate agent to pick the right one who can help them make their investment debut.

INVESTMENT TIP

In Sahiwal, most of the buying-selling activity is currently seen in the areas around Mudari Road. The recent development in the area has made the idea of living in any of the housing projects along that road very tempting since schools, colleges, hospitals and shopping areas are all located at a short distance. One particular project that offers a gated, secure and facilitated premises to home-buyers and investors in Sahiwal is Razak Villas, so I recommend property buyer to secure their investment by buying property in this project.

SYED IMDAD ALI SHAH, AL MADINA ESTATE & BUKHARI BUILDERS, NAWABSHAH

Property buyers should thoroughly look into the infrastructure of any project along with the promised facilities and amenities. Once they decide on the project, they should visit the relevant office to verify the documents and visit the site to measure the plot’s actual size.

In most cases, the first-time property buyer is unaware of these complicated matters and, in an ideal situation, it is the responsibility of the estate agent to guide the client. Nonetheless, the first-time property buyer should always do their homework about what important matters are involved in property buying and selling. To make a fine real estate investment, dealing with a good real estate agent is key.

INVESTMENT TIP

In Nawabshah, there is currently high demand for property around Kumb Ranipur, Sakrand Bypass and Sanghar Road. Like all cities of Pakistan, Nawabshah is also expanding and the area around the Nawabshah District is currently the focus of the city’s real estate developers. In the coming years, I see a gradual and consistent rise in the value of property in these areas. I also recommend Farsi Bagh on Sanghar Road and University Colony for sound real estate investment.

This article was originally published in the May 2015 issue of Zameen.com Magazine. Please click here to subscribe to the magazine today!