What is residential real estate investment

1. What is Residential Real Estate Investment? Residential real estate is a necessity for everyone. These properties are typically occupied either for living or to be rented out to other people who are looking out for places to live. The key to making successful real estate or any sort of investment is having an understanding of it. Even if you are taking help from a professional entity such as a real estate agency, still it is important to have at least basic knowledge. Knowledge will lead you to wise investment decisions. What are the major differences between commercial and residential real estate investment? What are the best options for residential properties? Is this investment worth it in the current economic climate? Here is the deep insight into residential real estate investing for beginners to help you gain knowledge, make informed decisions, and to help you find the worthy prospects in Pakistan where you should allocate your capital. Difference between Commercial and Residential real estate? As evident from the name, residential real estate (RRE) are those which are acquired or owned for residential purposes. But there are further subcategories of residential purposes. Broadly, it is divided into the categories of: 1. Single-family homes - dwellings/homes with no shared walls, occupied by one family or household 2. Multi-family residences - properties that are occupied by several families living separately i.e. apartments 3. Townhouses - these are multiple properties adjacent to one another but share separate entrances. Townhouses feature multiple stories 4. Condos - often referred to as condominiums are somewhat similar to apartments, but the primary difference is that condos are owned by residents not rented. These privately-owned individual units within a community of other units In contrast, commercial real estate (CRE) is purely for business purposes. It comprises all types of properties in the market such as retail, office, and industrial properties. Apartment complexes, gas stations, grocery shops, hospitals, hotels, offices, parking facilities, restaurants, shopping malls, shops, and theatres are all examples of commercial properties. CRE prices and returns on investment are significantly larger than RER. Residential real estate investment is better than a Commercial one? If CRE is offering higher returns than CRE, then it is a better investment option. Right? Well, there is no straightforward yes or no answer. Which investment will work for you solely depends upon your investment needs.

2. Generally, there are two purposes behind a person buying real estate. Firstly, need i.e. building a home, starting a business. Secondly, for returns, whether in the form of passive income or for the sake of profit. Both options are absolutely valid but vary from person to person. But to reach out and figure out the correct investment goal, there are several other factors an investor should consider. Goals and the risks involved, like with any investment channel, are the deciding elements in determining the success of investing in commercial real estate vs residential real estate. Instead of going for what are the common practices in the market, assess the risks as per your local market or the area where you are looking forward to putting your money. For example, commercial property is relatively expensive but it is not workable if you buy a warehouse or a property for a factory set-up in the neighborhood of homes. How much time you can invest in managing the property is also very critical. Either go for CRE or RRE, it will come with the responsibility of management. RER comparatively requires a lot more involvement of owner/landlord than a commercial property owner. With that, when it comes to upkeep, the advantage of CRE property is that in the long run, it is less expensive than residential property. For example, a property owner creates a contract before leasing his CRE that puts the maintenance duty on the tenant who is going to use the space for business to conduct all maintenance work. Despite this edge, CRE is of no use if you are looking for a property to build a home. And last but not the least, never go for an option that is more than what you can afford. It can cause big trouble in the future. Assess your finances realistically and then start hunting your options. It will also save you a lot of time when you will be looking for property. Takeaways about Residential real estate ● Both commercial and residential are real estates but their purposes are absolutely different from each other ● Which property is best for an individual solely depends upon the outcomes he/she is looking forward to from his acquired property. ● Generally, real estate investment can work best for beginners as it involves less paperwork, does not have strict government regulations, and relatively less monetary volume is involved from an investment perspective. ● Even in the neighboring areas, the market varies from one to another. To ensure the safety of investment, or for real estate investment for beginners, we recommend getting assistance from a reputable real estate agency operating in that area. Residential real estate investment in Pakistan With 220 million residents and a labor force of more than 60 million, Pakistan is the world's fifth most populated country. Residential real estate has long been valued in Pakistan. Besides, real estate is one of the major industries in Pakistan and makes up a major part of the country's GDP.

3. Moreover, it is one of a handful of options that actually guarantee returns on investment in a country. So, if you are thinking about putting your capital in residential properties, it can be highly profitable. The top three residential real estate investment options in Pakistan are: 1. Park View City Lahore: Located in one of the largest cities of Pakistan, this housing society offers a luxurious lifestyle and high returns on investment. Park View City Lahore NOC is also approved by LDA. 2. Capital Smart City: Located in the heart of Federal Capital Islamabad, CSC is the first-ever smart city of Pakistan and the 24th in the world. It features amenities that are a rarity in the country. 3. Defence Housing Authority: Owned and administered by the Pakistan Army itself, DHA housing is one of the most secure and safest investment prospects in Pakistan. Moreover, it is the oldest real estate developer operating since the 70s. Conclusive Overview Realistic assessment of goals and finances is the key to making a successful investment, whether residential or commercial. Overall, residential real estate investment is totally worth it.