The ‘rent vs buy?’ The question is more relevant today than ever before with property prices favoring a buyers’ market, however uncertainty still remains among potential buyers around location hotspots, future return on investment, and short and long-term financial implications.

This article discusses the pros and cons followed by expert market analysis for prospective homeowners.

For prospective owners who wish to stop paying rent, it does depend on where the individual sits financially, but if they have adequate equity, it makes sense for them to contemplate paying their own mortgage and look at real estate as a mid and long-term investment.

Property in Pakistan Renting – the Pros:

• Less commitment: Despite having to sign a contract with a owner, you can commit to the exact length of time you require, however short this may be. Although you will be liable to pay an exit fee, you can end a contract with a owner at any time.
• Less short-term financial outgoings: By renting, you avoid paying upfront fees which as a homeowner you will be liable for, (DLD fees, registration, maintenance fees etc).
• Flexibility: If you’re planning to stay only a short time or aren’t sure about your employment plans, renting allows you more flexibility in terms of moving to different regions and is generally a good option if you need the freedom.

Property in Pakistan Renting – The Cons:

• Inability to make changes: If you enjoy making a house a home, you will be restricted to carry out any renovations within the property.
• More long-term expenses: Years’ of renting will build up significant ongoing costs with no tangible asset to show for at the end. By considering your longer-term plans and monthly rental payments, you can assess how much you will end up spending and make an informed decision that will best suit your financial needs. Since the recent decline of property processes seen across the region, many are now taking the opportunity to benefit from lower house prices rather than continuing to pay rent.

Property in Pakistan Buying – the Pros:

• Long-term investment: Whether you’re buying to live in the property, or to lease it, or even to sell it, you are paying your mortgage towards a longer-term asset.
• Ability to settle: Owning a home provides you a sense of stability and security, and aside from the usual fluctuating interest rates, your monthly payments will be more stable than a rental market.
• Opportunities: Unlike renting, buying a property presents you with a number of opportunities which could generate plenty of revenue. Some homeowners now live off revenue generated by property leasing, offering them even more financial gain.

Property in Pakistan Buying – the Cons:

• A number of recurring costs: Owning a home comes with a surprising variety of expenses that renters do not directly pay. These include maintenance fees, insurance fees, mortgage payments.
• Higher initial costs: In recent years, 25% in cash, 4% in DLD charges, and 2% agent fees add up to 31% of the net price which needs to be paid up front. However, by researching different developers you can find down payments as little as 5%.
• Fluctuating market: Like any market, fluctuations can cause some financial losses if the owner is leasing the property or if the value decreases.

To conclude, I must say that whether to purchase or to rent is a common question that residents usually face. However, the decision cannot be made abruptly or easily, and a lot depends on your requirements and financial health. Buying a house, flat or a commercial unit is one of the best investment options to grow your capital and gain financial and personal security.

Sapphire Builders & Associates provides buying and renting choices in their projects for their investors family. Sapphire builders and associates’ has an upcoming project by the name of OPAL Mall & Luxury Suites in which there are shops, offices, and apartments on a buying and renting basis.