Stock Exchange VS Real Estate in Pakistan

The most demanding and challenging question in 2021 will be determining the best strategy to make money. The first question that comes to mind is: What is the difference between the stock exchange and real estate in Pakistan? In this article, we’ll help you choose the right solution for you. Should we invest in real estate and buy properties, or should we buy shares on the stock exchange?

Let’s look at the Pros & Cons of stock exchange against real estate in Pakistan and the safety and security of investment.

Real Estate Analysis from Beginning to Now

Pre-Time

People were especially interested in real estate after 9/11, while Musharaf was in power. The real estate market was booming. According to the FETF, black money was pervasive in the past, and the government did not supervise the real estate market. The administration did not change Benami’s law.

Benami is when you paid the property’s taxes, but you have no proof that your money was white. You register the paper in someone else’s name, and when the property’s value rises, the owner sells it without asking any questions. However, the benami’s law is currently in effect.

A few years ago, a property worth thirty lac was discovered appraised approaching a one-crore property, even though it is not in the owner’s name. He starts at the back and sells it out without hesitation for an extra five to ten thousand dollars.

Every property follows the rules to a tee. A chauffeur or a person selling fruits on a cart may be the owner of hundreds of crores in black money, but he is entirely oblivious of it. But that is no longer the case.

Currently Position

Capital Gains revised rates, and if your money is white, but you can’t prove it, the government will seize your property under three essential and significant real estate historical developments.

The real estate system has evolved; it is no longer possible to purchase a property today and sell it fifteen days later for a profit of one lac. You must either wait a few months to sell it without paying extra tax or pay extra tax if you want to sell it right away.

Reit (real estate investment trust)

Is the property rate higher when it is sold for a prolonged period before being delivered to the rightful owner?

During the selling and buying of plots, the rate usually rises with each sale. This approach is unique to Pakistan, as a 200 to 300 kanal area property is owned by a state developer after a thorough examination.

The companies that these developers form are known as reit. Pakistan also has one real estate investment trust (REIT) listed on the stock exchange.

If the property dealer gives the customer false expectation that buying and selling the property would be the same as it was in the past, they are mistaken. It is no longer as easy to make a sale in a short period with no investigation as it once was. Yes, you can purchase a rented property. However, plots are not recommended at this time.

Stock Exchange

When comparing the stock exchange to real estate, you must first assess the company’s current economic situation to become a good stock trader. The company in which you are intended to invest, after a year, examines the reasonable dividend they pay and aim to obtain a 6 to 8% payout.

In Pakistan, some corporations even pay a 10% dividend, which is a large yield compared to other countries’ stock markets. The stock exchange is unknown to the general public. It all boils down to not making a mistake.

 Well-managed Stock Exchange

There are two categories of investors: those who put money away for this business and solely rely on stock graphs. For example, a stockbroker who knows he needs to make at least one lac will buy and sell at every opportunity. He will take dividends on some of the money and buy and sell the remainder.

Risk of fraud in Stock Exchange

Extortion incidents on the financial exchange were also discovered a few years ago as the physical share system of stock offers and cash transactions. The crooks provide phony cash delivery.

Mr. Shokat Aziz, who had previously served as Pakistan’s prime minister and had recently invested in the Dubai and American stock markets, organized the Pakistan stock framework with New York and America at the time.

Extortion is far less likely now and primarily less likely if you open a CDC record. CDC is a self-administered organization where you can open an account without having to deal with a broker. Your money will be safe there for a long time.

The physical money system has been decommissioned throughout the country. Still anyone with old physical shares can contact the CDC, and their registrar will check and transfer your funds to the CDC account.

Suggestion

You want to invest in a company, so open your mind and research it. Examine the company’s three-year growth history.

Make sure you don’t make any poor choices.

Whenever you have to check and invest in a firm, start with a small amount so that if you lose money, it is manageable. Then ask for additional information and play your chance again.

Stock exchange ownership comparison with real estate ownership

Similarly, with real estate, feel that this particular property is yours; the same is true in the stock exchange. Every year, the stock market’s shareholders gather for an annual meeting.

You can write a letter to the company’s owner, indicating that you are a shareholder of ABC and would want to visit because you own a portion of the company. For example, if you purchase a share in a PSO petrol pump, you will be able to see the pump and can confidently claim to be a 10% owner of that pump.

Comparative Analysis

Stocks and business investments

For example, suppose you invest $25,000 in a friend’s medical business, and he provides you 25% of the profits every month. In the event of your death, where would you rather have your money: in a friend’s account or stock? Bad times occur in everyone’s lives. How could we trust others when people struggle for money and take control of other people’s property without any authority?

According to Islamic distribution, if a person dies in stock, the money is distributed to his children’s CDC accounts. Without a doubt, they are all independent owners of their divided shares.

There are a few more considerations to consider when deciding between stocks and real estate.

You can start investing in the stock echange market with as little as one lac and become a corporate shareholder. 

Suggestion

We’ve gone through the differences between the stock market and real estate; now it’s up to you to pick which is best for you. To have a look at  Real estate in Pakistan, you can pursue this.