Although buying a plot and building a house is common, many simply consider buying the rental place they live in. This could be for a number of reasons: the owner might be selling at an affordable price or the tenants might be looking for a quick fix which allows them to save time looking for a new property.
To reduce the chances of fraud, Graana.com, Pakistan’s smartest property portal, has compiled a questionnaire for you to go through if you are considering buying your rental unit.
Did you look at other options?
It may be the case that you have been living in the same place for a number of years and you have good relations with the neighbours as well. Thus, buying your rental place can be a tempting offer. However, taking a step back and considering your options first is recommended as it will give you time to look at other places on sale in the same neighbourhood. You can compare the prices and conditions of various properties on the market – you might even end up getting a good deal for the amount you are willing to spend.
Is the owner giving you a head start?
As of 2021, there has been an estimated housing shortage of 11.4 million homes in Pakistan, which is estimated to grow to 17.2 million by 2025. Plus, as demand has outpaced supply, the costs of properties have also increased. In these circumstances, if the homeowner offers to sell you the house you are living in (instead of considering other potential buyers), this can be an easy and convenient option as you won’t have to go out and search around for an affordable and suitable place.
How good is the deal?
In most cases, the landlord may be ready to give you a discount because he or she is being saved from the lengthy and tiring process of dealing with a real estate agent and listing the property. But a discount does not always imply a good deal. A potential issue can be that the owner is trying to save some money on renovations or house staging.
What could go wrong?
If you have lived in your rental for a year or longer, you have a significant advantage over other buyers: you are aware of the good, the bad, and the ugly. Take a long, hard look at the pros and cons –- if the latter outweigh the former, you can go ahead with your decision.
What is the neighbourhood like?
Understandably, it would be difficult to give up your neighbourhood, your dry cleaner, the streets you walk with your dog, and your favourite little eatery just around the corner. If you feel like you can’t step out of your comfort zone at the moment, and the current place caters to all your needs, there is no reason to give it up then.
What are your relations with the landlord?
Knowing the landlord aids in the ownership/transfer process significantly. Tactical details, like finalising a time to meet or transferring cash, are handled easily as each party is driven and eager to be as adaptable as possible.
Can you afford it in the long run?
Whether you are buying the property through instalments or a one-time payment, it is important that you consider the hidden payments as well. Take into account the amount you will spend on renovating the place and, most importantly, if you have enough finances to sustain your daily expenses after purchasing the property.
What’s the market like?
Once you have taken a look at your finances, it is also essential that you check the current market trends too. For instance, if houses for sale in Karachi have higher rates at the moment, you should know what is influencing the flux. If future predictions continue to anticipate rising prices, it may be a good option to buy your rental place now (if you are getting a good deal).
For more guidance on the home-buying process, visit Graana.com.