Salaam,

Yes it is a good investment in terms of rents , I do think it may lack in capital gains as such owing to its location and that can be a big set back. You can also look at https://www.imlaak.com/new-projects/downtown-residences/ which is right in the heart of Gulberg with 7% rental return which can be increased if we do not enter into an agreement with developer.

The issue you need to realize is that the developer is paying you 10% on the price you are paying him on day one, not on the price of the property the day it starts operating. So if a property is at 23000 per sqft today it will be around 30000 atleast on possession so you will be getting 10% on 23000 not 30000 per sqft.

Jazak Allah

Dowtown is kind of expensive. As for ramada its rent does increase by 20% every 3 years. About capital gains how much do you think it will be worth in 9 years when i would sell it? Plan is to get back all the money i spent through rent then sell it. What do yiu think of this plan? And So lets say a room for 80 lakh now will be worth how much do you think in 9 years? Thank you.

Salaam,

They are also offering you 10% rental right away if you can pay the 100% amount. However if you can not pay it and have to take on installments than the rentals will begin after posession, the 20% increment is only applicable after 3 years of possession.

We have 505 sqft 1 bed executive suite, 490 sqft and 341 sqft deluxe apartment available. I will recommend 505 executive suite.

Price of 505 sqft will be 114787000 or approx 22700 per sqft, however we can negotiate further on the price.

Also remember if you can pay 100% amount upfront within 4 years 40% of your capital will be returned to you in terms of rental.

In addition after 4 years the Capital gains on the project will make it very lucrative as i expect the price to reach 15000000 to 16000000 atleast.

Jazak Allah

505 sqft Ramada payment plan

Total Price 11487000

after discount 7.5%  10625475

30% DP  3187642

48 Monthly installments 88545

20% on possession 2125095

Thank you for your detailed response. Thing is i only have around 85 upfront so i was more interested in the 372 sq ft room. Please tell me the numbers about that how much you think it’ll be worth. Also why in particular did you mention the 505 sq ft one is that the only one worth investing in or is the 372 one good too?

There are a lot of things that need to be considered for one how can the developer pay rent while the building is still under construction ? The solution is to fix it in the bank where you are getting up to 12 to 13 % per annum. Now you can do that yourself if you are comfortable with savings account.

Now coming over to capital gains, your rent will be fixed at 10% for 7 years or more as you can not use this building yourself the price will always be relatable to rent you are getting so for the next 7 years you will only get approx. 30% increase in price in 7 years.

Now after 7 years add a 20% rental increment and approx. 20% increase in gains as well so over all you are expected to get rentals for 9 years which should cover your investment and a 50% increase in price atleast in 9 years. So over all you can probably make 3 times your investment in 9 years which includes rents.

The only problem I foresee is that as you will be in a long term agreement even if the property prices in general area increase manifolds, property price of your apartment will not.

Exactly why I suggested you Downtown Mall, you can choose to remain free from any agreement and enjoy Capital gains as per the free market , the price difference is very minimal considering it is in the heart of Gulberg 3 the most expensive place in Lahore and it is fully furnished by wing chair. So 22000 per sqft vs 24000 per sqft in downtown mall.

It will be much easier to discuss this over the phone , I will call you tomorrow at 1300 hours PST my number is  +92 333 1717170.

Jazak Allah

Thank you so much for your detailed response. I think i put in the wrong number but I will call you tomorrow at the given number for sure. In fact one day in the near future i would also like to visit you in your office if thats possible as i am very seriously planning on investing in either downtown or ramada and i would love to get your expert advice even more as to the pros and cons of both projects. Thank you so much once again.

You are welcome, imlaak takes pride in being a consultancy firm and we always give an unbiased opinion regarding real estate developers and investments. I hope to hear from you soon.

Jazak Allah

Hello sir, what time is convenient for you for a phone call/visit. My brother and I wanted to have a chat with you regarding downtown.

You can call me between 2pm to 8 pm PST .

Jazak Allah