The market offers various options for those who have the intention and capital to invest. The real estate sector, in addition to offering stability and security, is one of the best options that exist to make your money grow.
There are several ways to obtain returns with real estate, either as a developer, lessor or investor, directly or through the Pakistani stock market.
Each option carries its own possibilities and risks, but when it comes to investing, buying land is the favorite option for those who want to recover their investment safely.
Currently, Pakistan offers excellent opportunities in the real estate market, and proof of this is the increase in foreign investment. Since the purchase of properties is not only limited to Pakistanis, foreigners can buy properties in Mexico.
So that you do not miss out on the opportunity to become a great real estate investor, we have prepared some essential recommendations for buying commercial land.
How to be a Good Investor?
The idea that only big investors can generate income is a thing of the past. Currently, there are many ways to invest without having a large capital.
Every good investor must know where they want to go and what they are looking to obtain, and —above all— they understand that one must be patient to see the results of the investments made.
Here is a list of factors to take into account to make successful investments.
1. Set Clear Goals
The first step to making a good investment is to set the goals you want to achieve. It is important that the objectives are clear and achievable and are in accordance with the type of investment. Having this clear will be a key piece to choosing the best strategy and growing your capital.
For an investor with experience and who knows the financial market, this does not represent a major problem. However, it is a step that the first investors should not overlook.
2. Determine the Capital Destined to Invest
Depending on the profile of the investor, the capital can come from various sources, for example, as a result of previous investments, retirement savings, and bonuses, among others.
People always talk about the importance of diversifying assets in different types of markets. However, it is not convenient to spend all your capital on it.
This is because all investments have a level of risk. Whether high or low, the possibility of losing money exists, and therefore, you should not have all your capital in operation.
To complement this topic, we have prepared an article that will help you evaluate the risk factors of investment.
3. Set the Type of Investment
As we mentioned, the financial market offers a wide range of options that suit the type of investor, as well as the capital allocated.
Determining the type of investment indicated according to your age is one of the strategies that work best.
Among the favorites are:
- Fixed Income Investments
- Equity investments
- Stock Exchange
- Real estate
- Foreign exchange
- Raw material
Why is real estate the best option?
Very simple, in addition to being a medium-risk investment, the profitability of this type of investment is attractive and safe. Not only that, it is one of the investments that should be made at any age, so it is always a safe bet.
4. Know the Market where you are Going to Invest
Great investors thoroughly study all the factors that influence the market where they have chosen to invest. For example, if it is the stock market or in shares of a company, you must take into account the stability and returns that they have provided in recent years.
In the case of real estate, there are very few investments that do not work out and this is mostly due to the fact that a previous investigation was not carried out.
To choose the right terrain , key points should be considered, such as:
- Services and amenities
- Type of land use
In the case of not having experience in the real estate sector, you can always hire professional advice from companies —such as Sky Marketing— dedicated to real estate projects with high capital gains.
5. Consider the Investment Time
The time of an investment can be classified into:
Choosing the right one will depend on the objectives you have determined, as well as the type of investment. For example, investment funds can be for one year or for as long as the investor wishes to leave their capital in it.
In the real estate sector, it is considered that the investment can be in the medium or long term. It is related both to the form of purchase —cash or credit— as well as the type of property in question.
The advantage of land is that you can obtain extra income while the necessary time elapses so that the return on investment is what we expect. Leasing land is an excellent option when you don’t want to build, as is renting for franchises, which is good business.
6. Pay Attention to Investment Movements
In most cases, it is not just about waiting to obtain returns. It is necessary to be aware of how the investment you have made evolves.
It is advisable to take one day a week to verify the status of your capital. In the case of real estate, if it is not being rented or used for a project, the ideal is to keep the property clean and visit it constantly to avoid skydivers or mishandling.
Why Invest in Various Commercial Land?
Commercial land provides many benefits; for example, it is ideal for any type of investor, it has a high return on investment, and its wide variety of uses provides various ways to obtain extra income, among others.
Next, we will talk about the advantages of investing in commercial land and some strategies to obtain greater profits with them.
1. Know the Characteristics of Commercial Land
The land or lots may have residential, commercial, industrial or mixed purposes. This will depend on the type of land use assigned to it. A commercial lot is intended to carry out a commercial project on a larger or smaller scale, that is, from commercial premises to a shopping center.
Commercial land represents a great opportunity to obtain high yields —especially— if they are located in areas of high added value and both vehicular and pedestrian traffic.
The price of real estate is always on the rise. Sometimes this appreciation can be slowed down by some characteristic of the market; however, real estate is a sector that is in constant demand.
Knowing the characteristics of commercial land will make the difference in carrying out a successful investment. These characteristics will be determined by the type of business or undertaking that you wish to carry out.
For example, if you want to rent to franchises, you must previously inform yourself about the requirements that they ask for. On the other hand, there are other ways to start a business or undertake by buying land.
If you want to know more about this topic, we invite you to read our articles: 7 business ideas to earn money when buying land and How to earn money from a land without investing more?
2. Anticipate the Commercial Boom of an Area
The behavior of a specific commercial zone cannot always be predicted, but in places like Pakistan, the real estate boom —both commercial and residential lots— has remained stable and constantly growing.
The ideal is to buy in advance, that is, buy when the area is in an initial moment of commercial and housing development. This will make its cost lower and the capital will allow the acquisition of more for less.
Buying in pre-sale is one of the key points to investing in commercial land, as it allows you to obtain higher returns by anticipating the potential of the property.
3. Plan a Strategy before Buying Commercial Land
At the time of the search for commercial lots to invest, the commercial plan carried out prior to said search allows us to define what characteristics we are looking for.
All finance experts advise spending time analyzing personal finances and planning investment, business, equity strategies, etc.
When real estate is going to be acquired to increase investments in this area or to diversify them, it is convenient to plan a commercial strategy prior to its purchase.
This strategy will depend on what we want to do with the land, for example:
Build a shopping plaza
A shopping center or plaza can be as small or large as we imagine it to be, but if the entertainment and shopping offer is wide and varied for the public, they will feel more attracted to visit it.
The cost of building a square depends on factors such as the type of foundations, materials to be used and —above all— the conditions of the terrain, the type of land, whether it is flat or uneven, the structural requirements and the level of the finishes.
Whether we also invest in the construction of the plaza or find investors to take charge of it, if there are a good number of commercial premises to lease, the yield will find its equilibrium point faster with respect to the maintenance costs of this type of developments.
Schools, medical centers, hotels and others can also be built on large tracts of land, but we must remember that these must meet very specific characteristics from their design and construction.
For this type of large-scale projects, it is advisable to acquire a macrolot.
Lease a Piece of Land
Some investors make opportunity purchases of commercial lots at a low cost. Acquisitions that subsequently add to your equity with no intention of building on them soon, merely as a long-term investment strategy.
Those who want the ROI in a real estate business to start more quickly choose the lease of the property not yet built.
There are corporations that —according to the development plan— look for land for construction, from a convenience store (in small or medium-sized lots) to shopping centers with movie theaters and ample parking lots.
4. Buy more than one Commercial Land
Why do large investors buy several commercial lots?
The answer is simple, by having a larger area of land, the greater the number of premises or parts of the land that can later be rented or sold.
If a high-value commercial development has been found, it is best to secure the capital by investing in more than one piece of land. Such is the case of projects such as Lahore smart city commercial .
If you do not have the necessary budget to purchase the extension of land or the number of lots needed for a project, you can always consider investing in a partnership, taking advantage of the co-investment business model or real estate crowdfunding.
Commercial Land: the Best Option to Invest in
Now that you know the benefits of buying several commercial lands and the key steps to being a good investor, what follows is to find the ideal land to start building your wealth.
The land is a good that does not devalue and protects your money from inflation; it is always increasing in value. It is the best way to prepare for your retirement and ensure income in your retirement years.
Approaching experts in real estate issues is key to making good decisions, especially when more capital will be invested in several lots together.
At Sky Marketing, we have 25 years of real estate success and professional advisers who will guide you to invest safely. All our projects have market studies that guarantee the growth of the area, in addition to having additional advantages as they are urbanized.