The ‘rent vs buy?’ The question is more relevant today than ever before with continuous fluctuating prices in property in Pakistan that is favoring 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 and explains the pros and cons in depth followed by expert estate market analysis for prospective homeowners or willing investors.
For prospective owners and investors who are willing stop the hassle of paying rent every month, it does depend on the factors like; where the individual sits or how much they can afford financially. Can they afford a place including essentials and maintenance? But if they have adequate equity and handsome amount in hand, it makes sense for them to contemplate paying their own mortgage and service charges. Let’s look at real estate as a mid and long-term investment.
Property in Pakistan Renting – the Pros:
There are many advantages of renting in estate market. These are some of the pros related to rent or buying.
Less commitment: Despite having to sign a contract and agreeing on terms and conditions with the owner, you have the permission to commit to the exact length of time you require or how short the contract may be. It can be short as 4 to 5 months and long as 10 years. Although you will be liable to pay an exit fee but you can end a contract with owner at any time. Renting gives you another plus which is the benefit of changing places as you desire.
Less short-term financial outgoings: By renting places, you avoid paying upfront fees. which as a homeowner or buyer, you will be liable for. Renting as financial point of view can be easy for pocket if you have smooth flow of cash. It excludes you from DLD fees, registration, maintenance fees etc.
Flexibility: If you are planning to stay only for a very short time period or if you are not so sure about your employment or investment plans, renting allows you more flexibility in terms of moving to different regions in short time period and is generally a good option if you need the freedom and solace .As buying home will bound your flexibility of changing homes or apartments. Renting is more preferable as you can explore as much as you can without limitation of looking after or preservation.
Property in Pakistan Renting – The Cons:
Now, let’s talk about the disadvantages of renting. Some of the basic cons are as followed:
Inability to make changes: If you enjoy constructing or building a house or home, you will be restricted in renting to carry out any renovations or alterations within the property.
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 and deteriorating of property prices and processes seen across the region, many investors are now taking the opportunity to benefit from low house prices rather than continuing to pay rent for home.
Property in Pakistan Buying – the Pros:
Long-term investment: Whether you are 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 any property or home provides you a sense of stability and security in life. It actually becomes asset and aside from the usual ongoing fluctuating interest rates, your monthly maintenance or payments will be more stable than a rental market rate and their ups and downs.
Opportunities: Unlike renting, buying a property presents you with a number of chances which has the capacity to generate plenty of revenue in future for you. 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 as well as expensive variety of expenses that renters are not supposed to pay. So, the property owner is obliged to pay them. These include maintenance fees, insurance fees, mortgage payments etc.
Higher initial costs: In recent years, we saw the increase of about 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 in advance. However, by researching different developers or associates, there is chance of finding the down payments as little as 5%.
Fluctuating market: Like any market, estate market also depends on trends, inflation, ups and downs of economy. Fluctuations can cause some financial losses to property owners. And if the owner is leasing the property or if the value decreases.
To conclude the whole blog in a word, I must say that whether to purchase or to rent a property. Both requires cost and good research and this is a common and crucial question that investors, buyers and residents usually face. However, the decision cannot be made abruptly or easily. It requires patience and research, and a lot depends on your requirements, demands and financial status. 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, if you invest at right time with right strategy.
Sapphire Builders & Associates provides buying and renting choices in their projects for their investors and clients. From many projects 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. With easy long time investment plans or rental plans, you can own a property in the beautiful and prime location of Bahria paradise complex, Phase 4, Islamabad or you can visit our official website.