Azad Chaiwala provided misleading Information on real estate

The real estate of Pakistan is one of the most growing sectors of the economy in Pakistan. The construction sector spending in a year is $5.2 billion. Many more billions are invested in the purchasing of residential and commercial plots.

Worth of Pakistan's Real Estate

Real estate is a significant contributor to the growth of the Pakistan economy. According to the World Bank estimation, the total size of country real estate assets is around 60% to 70% of a country's total wealth. If these are applied to Pakistan, then the real estate sector of Pakistan would be worth $300 to $400 billion. Due to financial crises, economic and political instability, the real estate has not performed at its highest in 2019. There are significant expectations for growth in the real estate sector in the year 2020.

Where To Invest? The misleading Information

Today, we came across a video content of a video blogger who owns a YouTube Channel and has a subscription of 595k. In his video, he provided misleading Information, which was based on his personal experience. The name of the emerging YouTuber is Azad Chaiwala. In his video, he has discussed how to plot investment is not a sufficient idea for many investors. Instead, they should invest in Bricks purchasing or be a manufacturer of bricks. Many people ask him for advice as he has a fan following of thousands of people, but he never encourages anyone for plot investments. In this blog, we would highlight your audience's genuine comment to spread awareness about the feedback you have received from this video. Some comments are the answers to your wacky ideas.

We strongly disagree with this point that he does not prefer plot investments. Purchasing residential and commercial plots for resale at the highest price is a common trend in the property market of Pakistan. Numerous investors buy property at the initial stage and then wait for a while for property appreciation. Once the property appreciates its value, the owners sell it for favorable prices and make beneficial profits.

DHA City Example,

Let's talk about Pakistan's most top-class and expensive housing society, Defence Housing Authority DHA. It is a hot and blind investing spot for investors from around the world as it is the most authentic and profitable housing society in Pakistan. In Karachi, DHA has Phase 1-8 within the city, and for their Phase-9, they introduced their project towards M-9 Superhighway in 2009, when the plot selling was initiated, a 125Sq. Yards plot was available under 4 lakhs rupees, many investors strike this deal and purchased their plots in this lucrative housing society. If we talk about appreciation, the plot price increased after a few years and reached the market price of 60-70 lakhs in 2016, due to FBR Tax policies, the market fell down and the same plot in the year 2020 has a market price of 30-35 lakhs. To bring it into your Information, DHA has not started construction at the moment. Still, the plot selling is hot, and investors are demanding to purchase in this project since the future of Super-Highway is bright in terms of residential properties.

According to Zameen, which is the #1 online property portal of Pakistan and has its presence in 40 cities in the entire country has shared that 21.9% of investors in April 2019 purchased residential plots in Bahria Town Karachi. It was the most demanded real estate search for residential plots only. The buying and selling market of residential or commercial plots is always in business because many investors are looking to make profits through it.

We would like to correct your concepts on investment in real estate.

REDBOX Estate expert economist and property analyst Shakeel Anwer Kamal have something to share with you based on the ideas of real estate,

Plot prices increase over time, and you can double or triple your investment within a few years. Many plots are purchased with the intention of investors to save their money and earn lucrative profits. Even if a person is buying a plot to build a house, before starting the construction, the land value goes up.

Short term or long term plot investment

When you plan to invest in real estate, it provides you two options. However, the selection is on your own aims. You can purchase real estate land for a long-term investment or purchase real estate for the short-term. As the fellow YouTuber said 5 years, 10 years or 15 years. It is a long time for investment. If you choose the right developer, then you do not have to wait longer. Let us provide you a genuine example,

5 10 & 15 years

Many developers are completing the projects within two to four years. To know the completion date, you can check the NOC for construction; it is a genuine document that tells you the project is allowed to start construction work. If you blindly trust a developer who has not yet been authorized to construct, then your investment may take longer than expected. Some outstanding projects have delivered excellent housing communities. One of the best examples is Bahria Town Karachi,

BTK society started on 26th January 2014 and received a hugely positive reaction from within Pakistan and outside Pakistan. There is no other society in Pakistan that has performed in an excellent way like BTK and its other projects. The first 1000 apartment’s possession was given to owners by 2017. Within 4 years, the project delivered with excellence. The value of apartments reached its maximum worth, and people who invested in the off-plan time have benefited a lot from this project.

Purchasing an apartment or shops can be a good source of additional income. However, it has several disadvantages attached to it. Apartment investment is high-risk, and in a city like Pakistan, you may face tenants who do not pay the rentals on time and expensive property maintenance. If we talk about selling the apartment in the market, it can be time-consuming as every buyer has his own point of view. You may have a four-bed apartment, but the market demand is two-bed as most small families prefer a little place that is easy to manage, so you have to wait a long time to find the eligible buyer.

Plus, you cannot earn maximum benefits in an apartment as it has already gained its value. The shops are the same concept; in the commercial market, the location of a shop matters the most and the field area of selling. Maybe you have a shop that is suitable as a mechanic shop or a welding shop, but nearby you have a commercial market for clothes. It can be challenging to find a tenant or even run the shop in such an area.

8 Years

The YouTuber shared a personal experience in his video. He told the audience that he might have purchased a plot through rumor, which was next to an outstanding location in the city of Islamabad. The plot was purchased at an unimaginable price with a vast size. As of today, the scheme has earned 3x it’s price, but there is no buyer in the market. Every realtor from a big scale and the small scale knows about this plot. However, it's been 8 years, and it's not selling.

As property consultants, we would like to tell you that there are few legitimate mistakes that you have done while purchasing,

• The plot is next to an expensive location. But not in the outstanding location. It felt like saying that you have purchased a property next to Bahria Town Karachi, but not inside the BTK. Your plot will have its value, but not it's worth in this case. 
• Developer, the plot you purchased might not have any future. Just like there are many lands for sale near the airport that people have bought. The worth is unbelievable, but airport authorities can never allow you to construct it. Which means the land has its value but no use.
• Investors and genuine buyers focus on amenities these days. Your property is not suitable for the market trends of today.
• The demand for that plot would not be too much as people would be searching for other options.
• Your selling price is too high. Since the value has increased 3X, no investor or buyer would be interested in purchasing it on its peak price. What would they earn? What would they do it? You should consider lowering your profit since you made 3X maybe sell it for 2X or 1.5X. Even then, you will not face a loss.
   
• Research area, before investing, the research plays a vital part in making sure your investment is successful. The background of the developer, the previous project, the market value of the future, all of these things needs to be in mind when thinking about purchasing a property. In a country like Pakistan, even Garbage is not usable, but it sells. Then how cannot your plot sell?

We have told you all the mistakes you may have made during your investment. Further, the YouTuber says many people face loss during their investment but do not share to save themselves from embarrassment.

First of all, you shared your story; you can share but cannot advise people based on personal experience to not invest in plots only because you faced a bad experience. Secondly, these days, people are non-tolerable with fraudulent activities. Let's have a look at the most popular scams of all time. The NAB took strict action on it after the protestors made screaming noise, which included genuine buyers from good backgrounds. Here's the story,

Invest in bricks?

Being a YouTuber with subscribers of 595k is a success, but it comes with a lot of responsibility. Genuine buyers who invest in real estate can be related to professional fields such as, lawyer, doctor, corporate person, an employer or employee. In the busy world of today, people choose less stressful investment options. Time is money for everyone, whereas you presented the idea to all of your audience who are overseas or expats or within Pakistan to invest in bricks instead of real estate, which is well-manageable.

Small Capital

One brick was for 1 rupee almost ten years before; it is undoubtedly a construction item without building houses that may not be possible. But let's take an excellent example which we received from within your video,

At the starting of the video, you said, one person from Lahore, who is currently in Saudi Arabia, has asked you for advice on where to invest his capital to secure his saving. You answered him; don't invest in plots. If we think it through a logical mind, how can a person in Saudi manage selling bricks in Pakistan, which requires a lot of hard work, labor dealing, bricks storages, credit selling, and recovery of money? Pakistan has a trend of credit selling on bulk items.

Some of your audience responded,

In your video, you have yourself explained that there is a season in which the prices increase, known as Monsoon, well in real estate, your property value does not depend on seasons but increases independently.

The prices never go down, but they do not increase as well every year. One of the audience provided a logical explanation; let's have a look.

Real estate is a tangible asset, and it is known for decades. Bricks selling is a business, let's take a recent example, in the times of Covid-19, the bricks were not selling, and the lockdown applied to all business sectors. The labor, the material, the storage, everything can result in your business towards loss. Whereas the landowner or property investors did not have any effect on the prices. As land has more robust stability, and it does not get affected by environmental or economic changes.

Your land value has increased 3X in 8 years, even if you did not invest in the right property. However, it is not undoubtedly possible to make 4X without bearing a loss of money in the brick business.

There are a lot of risks attached to the brick business, and there is no safety. You can expect a loss even if you failed to provide a proper storage environment for the bricks, and if you own a brick oven, you cannot play safe as it is not football where you can cover your knees. It requires the knowledge of how to create bricks if you fail to understand or do now have experience. Your business can result in loss.

In real estate, it requires a little knowledge and a small capital to get you started on the billionaire journey. Your audience provided some logical arguments within your comment section. We have the same feedback for you.

Go for Bricks

We strongly disagree with Mr. Azad Chaiwala. After listening to your entire video, we felt you lack knowledge in the real estate business. REDBOX Estate welcomes you to provide professional consultancy free of cost to help you know better about the real estate. In the end, we would like to say 90% of all millionaires become so through owning Real Estate. More money has been made in real estate than in all industrial investments combined. The wise young man or wage earner of today invests his money in real estate. Andrew Carnegie, a Scottish businessman who had a net worth of US$475 million, said before his death in 1919 when the time was not so advanced, and today we live in a developing world fast every day.

--Iqra Ghani
Redbox Content Writer