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Lahore Real Estate Forum: Property News & Community Talk : ,

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   Chaudhry
Monday, March 14, 2016 06:40 AM 
Reply: >
AOA
Dear Experts
Would you pls tell me which one is better option for good earining. I have 8m.

1- Buy a plot any where in Lahore and wait for 3 to 4 years for good return.
2 - Buy a 5 marla plot and construct a house on it and then sell it .

Pls tell me after 4 years , earning wise , which one is better?

Thank you
Noman Ahmed replied on Monday, March 14, 2016 06:52 AM 

Dear Chaudhry Sb,

Construct a house and sell is better option. You will earn for your hard work also as well as enhanced plot price. Choose a location where demand of houses is high or houses are already constructed.
ABC replied on Monday, March 14, 2016 07:26 AM 

Dear Asif!

Please also add rental income. If we consider 10 months time for construction then rent = 38*35000=13.30 lacs + 104 = 107.3
Pakistan® replied on Monday, March 14, 2016 07:28 AM 

@Asif,
your results differ because for option 1, you invested 8M in land... and in option 2, you only invested 4M in land.

You also missed a big factor.....for option 2, if 5 marla house is constructed in 6 months and rented immediately on 40K per month.... then after 3.5 years.... you would have earned around 17,00,000 PKR as rent.

your total return would reach = 104 lakh +17 lakh = 121 lakh

I only assumed a humble 40k rent for calculation

my verdict --> build house
Asif replied on Monday, March 14, 2016 08:12 AM 

Hello ABC and Pakistan,
Chaudhry sab didn't inform that he will rent the house, he said he will build and sale.
Incase of rental income, its true that the total return will increase.
i don't think out of DHA , 5 Marla house rent is 40K.
Lets assume 30K rental and annual increase in rent is 15%.
Considering 3 years, total earning from rent will be (30000*12 + 34500*12 + 35175*12 ) = 1196100 PKR and excluding an average of 30k maintenance charges every year the total gain from rent will be 11,0610 PKR. and total gain on House including rental will be around 115 lax.
In case of building in one year and renting for 03 years. The gain is higher than only buying a plt of 8mio.

Further to Pakistan's question : In option 01 i have considered only one plot in DHA of value 8 mio.
and in option 2 the plot value is half (4mio for 5 marla) and half (4mio) for construction.
Asif replied on Monday, March 14, 2016 09:15 AM 

Lets take guidance from Allah about both these options. If you look at the concept of Zakat, it is mainly applicable to those assets which are not in use by the society.

By building a house you will benefit society in following ways and yet getting your own profit

1-You will create job opportunity for the direct labor
2-You will create a circulation of wealth and many people will get their livelihood when you purchase materials
3-You will put a piece of land in use which was otherwise a dead asset for society
4-You will create a housing unit for society where a family will live

By buying a plot for re-sale

1-You will block a piece of land which will not benefit the society
2-You will make it more difficult for the people to buy land for home
3-You indirectly promote new housing schemes on agriculture land which will increase food cost for the society.



Regards
Noman Ahmed replied on Monday, March 14, 2016 10:17 AM 

Asif Sb,

Well said.
Iftikhar Ahmad replied on Monday, March 14, 2016 10:19 AM 

Dear Mr. Noman Ahmed & Mr. Asif.

Kindly guide me the best location or societies where there is high demand of houses in Lahore (for construction of 5 marla house for rental income.

Thanks & Regards,
Noman Ahmed replied on Monday, March 14, 2016 10:28 AM 

In this budget I would say paragon or Bahria.
Asif replied on Monday, March 14, 2016 10:42 AM 

barhria, valencica, joher town, UET, Izmir
Rashid Rafique replied on Monday, March 14, 2016 03:19 PM 

Buy plot in LDA Avenue-1
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