FREQUENTLY ASKED QUESTIONS - FAQs
Q.1 - Should I invest in Property or Not?
Property investment is always fruit full and cannot return into loss if you have holding power. People are investing in Real Estate from centuries. In General property investment called as dead investment. Minimum investment for a residential or commercial property should not be less than 5 years. 10 years is more than enough time to get a hand some return in property investment.
Q. 2 - What is file?
which is not balloted yet or has been balloted and on ground or not on ground, and possession (where construction can be started immediately) is not granted by the builder / developer / Authority
Tips: Prices of files may fluctuate sharply (up and down) as per market conditions. Files are usually booked on installment plan for 3 years cost of land and 3 years for development charges in most cases. One should be clear before investing in file that how much time is required for holding.
Q.3 - How to verify a Society?
After selection of desired area of City where you want to live or invest, next step is “How to verify a Society”
Before investing / buying plot / home / commercial in any society you to have to consider followings:
a. Is Housing Society is registered with Securities & Exchange Commission of Pakistan (SECP) or Cooperative Department?
b. Is Society land transferred on Society name in Revenue Record?
c. Is Housing Society has valid NOC from Local Development Authorities (LDA / CDA / GDA / MDA / FDA as per approved map?
d. Is Housing Society has made arrangements for development work like Water, Gas, Electricity & Sewerage etc. on site?
Tips: Pre-Launch bookings are highly not recommended. You must wait for official launch of booking by publicly advertised in major news paper (s) with confirm location, booking schedule, installment time frame and tentative time for possession (year of possession). Before investing in any project you must keep eye on News Paper warnings ads by Local Authorities against projects which are not approved. Usually these local Authorities has a list of approved Housing Societies, as well as Unapproved Housing Schemes lists. You may also visit Local Authority Office and can verify about the scheme before investing. A marketing company / affiliates / agents may highlight a project which they are dealing with for their interest.
a. Is Housing Society is registered with Securities & Exchange Commission of Pakistan (SECP) or Cooperative Department?
b. Is Society land transferred on Society name in Revenue Record?
c. Is Housing Society has valid NOC from Local Development Authorities (LDA / CDA / GDA / MDA / FDA as per approved map?
d. Is Housing Society has made arrangements for development work like Water, Gas, Electricity & Sewerage etc. on site?
Tips: Pre-Launch bookings are highly not recommended. You must wait for official launch of booking by publicly advertised in major news paper (s) with confirm location, booking schedule, installment time frame and tentative time for possession (year of possession). Before investing in any project you must keep eye on News Paper warnings ads by Local Authorities against projects which are not approved. Usually these local Authorities has a list of approved Housing Societies, as well as Unapproved Housing Schemes lists. You may also visit Local Authority Office and can verify about the scheme before investing. A marketing company / affiliates / agents may highlight a project which they are dealing with for their interest.
Q.4 - What is a Society?
A Society can be defined an area having Urban planning with following amenities / facilities for residential cum commercial purpose:
Basic Amenities / Facilities:
✔ Electricity ✔ Water ✔ Gas ✔ Sewerage ✔ Road Network ✔ Commercial Area
Advanced Amenities / Facilities:
✔Parks ✔Play Area ✔Hospital ✔School ✔Any other features like Golf Course, Club, Gated Area, In House Security etc.
Basic Amenities / Facilities:
✔ Electricity ✔ Water ✔ Gas ✔ Sewerage ✔ Road Network ✔ Commercial Area
Advanced Amenities / Facilities:
✔Parks ✔Play Area ✔Hospital ✔School ✔Any other features like Golf Course, Club, Gated Area, In House Security etc.
Q.5 -What is a Balloting?
The term balloting was generally used for assigning plot numbers to the allottee for a said project in Pakistan Real Estate. In General Ballot mean “decide the allocation of (something) to applicants by drawing lots”. There are two types of Ballot in Pakistan Real Estate Market in General now:
✔Booking Ballot
Booking ballot mean, when a project is being offered on installment plan and people apply for the booking and ballot held for successful and unsuccessful applicants, called Booking Ballot
✔Plot Ballot
Plot Number Ballot mean a draw in which numbers allocated to each allottee against its file, in other word Map issued with plot numbers.
Tips: Now a day people are often trapped in the name of ballot by Agents / Developer / Builder / Authority. It is recommended to ask Agents / Developer / Builder / Authority before booking any project that it will be a confirm booking or there will be booking ballot, also when Plot Ballot will be held?
✔Booking Ballot
Booking ballot mean, when a project is being offered on installment plan and people apply for the booking and ballot held for successful and unsuccessful applicants, called Booking Ballot
✔Plot Ballot
Plot Number Ballot mean a draw in which numbers allocated to each allottee against its file, in other word Map issued with plot numbers.
Tips: Now a day people are often trapped in the name of ballot by Agents / Developer / Builder / Authority. It is recommended to ask Agents / Developer / Builder / Authority before booking any project that it will be a confirm booking or there will be booking ballot, also when Plot Ballot will be held?
Q.6 -Which location is best?
Usually in market Facing Park, Main Boulevard or Boulevard, Corner & locations near amenities are called as good locations, but in fact good location is whatever you can buy in your budget.
Q.7 - What is short term & long-term investment?
People often ask “Is it a long term investment or short term investment’? In general mostly people perceive that an investment which will give return in short time called as short term investment, and an investment which will give return in long term will be a long term investment. Where as there is no relation of gain for an investment to be called as short or long term.
An investment time frame can be define from its delivery period rather its gain. A project is going to be deliver in next 1 or 2 years can be treated as Short Term investment, where as a project going to be deliver in next 2 years or more will a mid term or long term investment respectively as per time frame.
Prices for any investment can be rise due to several reasons, so primary criteria to measure an investment time frame should be only its delivery. Next important factor is the pace of occupancy, we must analyze that if a project is located at long distance and being delivered by the developer / builder / authority in short time or mid time but how long it will take to occupy. This is also a very important factor to understand an investment. If pace of occupancy will be fast price will rise with consistent growth, if occupancy rate will slow then prices may come down or remain stable. It will vary from project to project and situation to situation.
Tips: Always ask your agent the delivery time of the project, or contact Builder / Developer / Authority for delivery time of a project.
Tips: Always ask your agent the delivery time of the project, or contact Builder / Developer / Authority for delivery time of a project.
Q.8 - When Ballot / Development / Possession will be held / started / completed / given?
Most common question after booking of plot / home / commercial by investors in any relevant society by Agents / Dealers. Usually to satisfy their clients, Agents / Dealers answer this question as per best of their knowledge (knowledge is always limited up to any extent). Agents / Dealers communicate with relevant society Front End Management Officials or Customer Relationship Officers (CRO) which usually are not aware of ballot date / development schedule / development status and development completion timings. In result investors get dissatisfied due to mismatch of information or bogus information.
Tips: Always contact Builder / Developer / Authority directly to get right answer for such queries like Ballot Date / Development Status, Completion of Development etc. Only Builder / Developer / Authority can have best answer for this question, only they can give exact or estimated date for ballot / development started and completion / possession etc.
Tips: Always contact Builder / Developer / Authority directly to get right answer for such queries like Ballot Date / Development Status, Completion of Development etc. Only Builder / Developer / Authority can have best answer for this question, only they can give exact or estimated date for ballot / development started and completion / possession etc.
Q.9 - How much holding time is required for an investment?
Commonly asked question by investors from Local as well Overseas. Although there is no set standard to define the time frame of property investment. Its vary from Project to Project and stage of Project. However generally we should have following time frame in mind for property investment after buying / of plot / home / commercial to get some return.
✔Minimum: 1 year
✔Reasonable: 3 years
✔Sufficient: 5 years
✔Enough: 10 years
✔More then enough: 15 years
15 years is more then enough to hold a property to get the maximum return at a specific growth rate. Mature projects has slow but stable and secure growth, where as under developed or newly developed projects has faster growth rate but more risky if market drop.
Tips: Before doing any investment you must be clear about your holding time. Do not make any investment with un clear holding time. In property the holder is the winner. If you have holding capacity you are in a win win position. Consult with your agent about your holding time. Do not invest in property if you cannot hold for minimum 1 year time period or other wise you must have to be in touch with daily market trends. If you have enough time to do so then think about less then 1 year investment other wise leave that option. If you are booking a plot or home you must be able to hold it till possession, pre possession sale may return into loss. If you cannot pay the installment please do not book.
✔Minimum: 1 year
✔Reasonable: 3 years
✔Sufficient: 5 years
✔Enough: 10 years
✔More then enough: 15 years
15 years is more then enough to hold a property to get the maximum return at a specific growth rate. Mature projects has slow but stable and secure growth, where as under developed or newly developed projects has faster growth rate but more risky if market drop.
Tips: Before doing any investment you must be clear about your holding time. Do not make any investment with un clear holding time. In property the holder is the winner. If you have holding capacity you are in a win win position. Consult with your agent about your holding time. Do not invest in property if you cannot hold for minimum 1 year time period or other wise you must have to be in touch with daily market trends. If you have enough time to do so then think about less then 1 year investment other wise leave that option. If you are booking a plot or home you must be able to hold it till possession, pre possession sale may return into loss. If you cannot pay the installment please do not book.
Q.10 - Which investment is better Residential or Commercial?
Definite commercial investment has more return in terms or value as well as rental income as compare to residential investment. Residential investments are for personal living or individual and commercial investments are for Business or Earnings.
Tips: Before making investment decision for Residential or Commercial first decide following things:
✔Are you going to use this investment for both purpose (residential cum commercial)?
✔Population size of the area specifically for commercial investment Amenities / facilities available in the society for residential purpose
✔Are you going to use this investment for both purpose (residential cum commercial)?
✔Population size of the area specifically for commercial investment Amenities / facilities available in the society for residential purpose
Q.11 - Which investment is better Cash Payment or Instalment Package?
Again, I do not have a one-line answer for this question. No one else can give answer for this question, only individual can answer him / herself about this question keeping in view the following factors:
✔Is your decision is for pure investment purpose to get some return
✔Are you going to use this property for your own residence or business purpose
✔When you need to construct home or building (after how many years)
✔Can you easily pay installments in time when due
✔Are you ready to wait until project get developed and possession granted.
Tips: Do not book plot or home if you are not able to mature it or cannot wait till possession granted. Investment may be risky and return into loss for pre mature selling (builder or agents / dealers are in “win win” position in this case, only looser can be the investor).
✔Is your decision is for pure investment purpose to get some return
✔Are you going to use this property for your own residence or business purpose
✔When you need to construct home or building (after how many years)
✔Can you easily pay installments in time when due
✔Are you ready to wait until project get developed and possession granted.
Tips: Do not book plot or home if you are not able to mature it or cannot wait till possession granted. Investment may be risky and return into loss for pre mature selling (builder or agents / dealers are in “win win” position in this case, only looser can be the investor).
Q.12 - How much do you need for a down payment?
Saving a huge amount for a down payment is the first step for purchasing a property. It can be hard for you to pay a huge amount at the beginning but it smooths the remaining payment process. Down payment may vary between 5% to 20%, according to the will of the property owner. You can negotiate the payment ratio but it will still be a huge amount.
To make it easier for you to pay a down payment, start with making the budget. Find a property and get information about the down payment ratio. Once you know about the sum of an amount you are going to pay at the beginning, start working hard to earn it. Make it your goal and stick to it.
Q.13 - How to get the best mortgage?
It takes a long to study and learn about the different rules, rates, and terms of mortgages. Once you have discovered your dream home, it is time to apply for a mortgage. For speedy mortgage finance, here are some tips:
1- Seek help from a specialized mortgage broker.
2- Meet a lot of brokers before finally involving with one.
3- Learn all the rules and regulations about mortgage finance.
4- Consult with different mortgage association before making a final decision.