The Pakistan real estate market remained dynamic in 2024, with nearly 1.1 million transactions and a 5.7% price increase nationally. However, in 2024, inflation could impact this trend.
Despite this economic uncertainty, the Pakistan consider stone a safe bet, making it attractive for investment.
But with the rise in rates and the current inflationary situation, is investing in real estate in 2024 still wise? Are there niches that are more profitable than others in this sector?
Real estate investment in 2024: what are the risks regarding rate increases?
The current economic situation is impacting the real estate market. Despite the high stock market volatility, real estate continues to be considered a haven for savers. Even in periods of fluctuation, real estate constitutes a real buffer against inflation.
The value of Lahore Sky real estate continues to appreciate even in times of crisis, so investing in real estate remains profitable in 2024, even if borrowing rates are limited to a maximum of 3.5% for 12 months.
To make your investment profitable, carefully analyze the rate of real estate loans. Of course, the rate increase is less significant than inflation: for example, in 2024, the consumer price index increased by 6.2%, making real estate loans attractive.
Do not hesitate to subscribe to training to invest in real estate and properly analyze the market before starting.
Investing in real estate: the most profitable properties
Real estate offers a multitude of investment possibilities. However, not all investment models yield the same rates of return.
Here are the areas offering the best returns on investment:
Rental property (house, apartment or accommodation)
This investment is very popular, especially among individuals who wish to invest their money. This consists of buying real estate to rent it out to individuals, so you will receive additional income thanks to the rent; this also helps amortize the initial investment.
The rate of return depends on several elements:
- The nature of the good;
- Its location;
- Its accessibility;
- Its location about everyday services and shops;
- Its orientation
Please note that returns do not exceed 4 to 5% for rental real estate investment in large cities such as Nantes, Paris, and Lyon.
You can offer two types of rental:
- Long-term rental (between several months and several years, depending on the lease): for this option, the properties offering the best returns are located in large cities close to major cities. However, avoid investing in Paris and the Paris region because the rate of return is quite low there (unless you have acquired an exceptional property and can claim a high rent). The rate of return on long-term rental investment varies from 3% to 7%.
- Short-term or seasonal rental investment allows you to receive more income, depending on the occupancy rate of the premises. Its rate of return is estimated at 7%. Income increases during the tourist season.
Garages or closed parking lots
The investment rate is relatively low, while profitability can reach 8% to 10%. You can earn more if the garage or parking lot is in a large city like Paris or Lyon. However, the purchase price will be higher.
For example, in Lyon and Marseille, the rate of return does not exceed 10%. However, the return remains attractive compared to renting a house or apartment.
This type of property is quite rare, but it offers many opportunities. Indeed, closed car parks can be converted into storage units to attract more customers; this type of investment benefits from more flexible regulations than houses or apartments.
Private garages and parking lots also save you from regular maintenance work, which may be mandatory in homes.
Buying and reselling real estate
This involves purchasing a property at a price lower than its market value, renovating and beautifying it, and then reselling it at a higher price to make a profit.
This investment strategy can generate a significant rate of return, ranging from 10% to 30% in a short period.
To limit risks, choosing the goods to acquire carefully is essential: for example, houses and buildings located in fast-growing neighborhoods offer high resale potential. Renovation costs should also be considered before purchasing to maximize project profitability.
An expert must renovate to comply with current regulations. The materials used must be of quality to minimize the risk of poor workmanship so the house will have a beautiful appearance during a visit, and all its advantages will be highlighted to conclude a sale at the best price. The work must be completed on time to maximize profit and resale timing.
The most profitable real estate investments in 2024
Real estate crowdfunding
Allows access to a large number of investments previously reserved for large investors. Inspired by classic crowdfunding, it offers a 7 to 10% profitability rate, with an entry ticket starting at €1,000 on average.
With this investment, you contribute to financing a real estate program: you are a creditor, but the property does not belong to you; your capital will be reimbursed with a capital gain. The duration of real estate crowdfunding varies between 12 and 36 months.
SCPIs
This program allows you to invest without inconveniencing rental management and property maintenance.
Your investment is taken care of by an SCPI, which invests it in a real estate portfolio of offices, businesses, and residential accommodations. You receive monthly rent thanks to this investment system.
This is practical if, for example, you have assets that you want to make profitable to prepare for your retirement.
The SCPI allows you to benefit from a profitability rate of 4 to 5%.
Investing in new or old?
This question is crucial to profit from your real estate investment.
Although this debate is recurring, investing in new property certainly offers more advantages because it allows you to benefit from several elements:
- A property in excellent condition respecting standards (thermal, sound), so you are not obliged to spend more on renovations.
- The manufacturer’s ten-year guarantee in the event of construction defects. These guarantees are valid for ten years and allow you to benefit from support in the event of problems with the construction.
- Notary fees were reduced by half compared to the old one.
- Attractive accommodation for your tenants.
