Confused between 2 options of investment

ahmed.shaikh1133 (Ahmed) 2020-01-14 09:24:54 +0500 #1

Salam All,

With around 5 million in hand, what would be the best & safe option to choose for investment in Karachi.

Option 1: Buying a Toyota Hiace and rent it out to ride hailing services like Swvl/Airlift, which will generate 70 to 80k per month income, the Hiace can also be used for inter city tours on weekend which may generate additional monthly income. As far as I think the risk associated with this investment is, vehicle can face accident; shutting down of these companies in future and depreciation in vehicle value with the passage of time.

Option 2: Buying an apartment and rent it out; it will generate 20 to 25K per month income and with the passage of time shall appreciate its value. I don't see any major risk associated with this investment besides that one could confront with annoying tenant.

Any input in the matter shall be appreciated.

PS: Presently I am doing a regular job, so above investment is just to increase some additional cash flow with less involvement from my side.

Thanks.

ali01 (ali01) 2020-01-14 09:54:06 +0500 #2

Appartment may not appreciate as well as peace of land like plot in some recognized society because appreciation of appartment is dependent on maintenance and cleanliness of that building . As far as options 1 is concerned, the transport business need time & involvement of the owner.... If someone leave the vehicle on disposal of driver, the investment depreciate v quickly due to lack lo maintenance. Otherwise Toyota Hiace is a solid investment.

anon36782927 2020-01-14 10:24:34 +0500 #3

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ahmed.shaikh1133 (Ahmed) 2020-01-14 10:31:54 +0500 #4

Your suggestion is good, although plot will appreciate in some time but will not generate monthly income.

uzeemujeeb:

any wise person will invest such amount only in real estate, in Pakistan. Gold, real estate and prize bonds are the only safe investment which never depreciate.

hilux will starts to lose the value with passage of time. any business which is not monitored by owners' slow down in terms of profit after 18 months of healthy upward graph.

apartment(s) never lose value. buy an apartment and put it on rent with a carefully drafted rental agreement by a legal firm., not a road master table chair footpath office lawyer. remember the apartment shall be properly documented in your name for all legal frame work and income tax returns. tenant shall be responsible for payment of utility bills and maintenance charge levied by building residents. You shall be taking care of property tax etc.

Thanks for detailed reply, your suggestions are indeed very well thoughtful. Thanks buddy.

abid110 2020-01-14 10:33:43 +0500 #5

transport business is not for normal people like you and me - its a very different story once you enter this field. you need to hire a driver, and believe me it is an extremely difficult thing to find one. someday he will be sick, absent etc and all your commitments with Airlift/SWVL etc will be disturbed and in the end you will not be able to cope. its a big mafia, as you know what i mean being a Karachiite.
new flats are extremely inflated in prices. in 5 million, you will be able to get hold of a flat which will be too old, too small, and not in a very good locality. maybe down inside Jauhar you are able to get one, or FB Area, or North karachi, but the rents will be 25-30k max.

My suggestion:

Scheme-33 is an open investment - in this amount, get hold of a plot of 120-240 yards, buy at a place which is trusted as in whole karachi chances of 2-numberi are too high. Scheme-33 is Gold believe me. after living 34years in FB Area, we are moving there too very soon - peaceful and high demand. think about it

anon36782927 2020-01-14 10:39:16 +0500 #6

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abid110 2020-01-14 10:43:00 +0500 #7

cross sohrab goth - on the left there are tens of societies - search google maps. Teachers Society, Merchant Navy Society, State bank Society, Gulistan Society, Gwalior Society, kaneez Fatima, etc etc....

anon36782927 2020-01-14 10:46:25 +0500 #8

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ahmed.shaikh1133 (Ahmed) 2020-01-14 13:27:28 +0500 #9

Thanks @abid110 for your valuable suggestions. Much appreciated. Will consider both options flat & plot before making any decision.

SER_GTR (SER_GTR) 2020-01-14 13:40:54 +0500 #10

Option 2 considering you randomly keep check and find a good tenant and know how to tackle...

khurem (khurem) 2020-01-14 15:03:35 +0500 #11

Invest that amount in mutual funds. Much better and risk free option currently than everything else.
Since you do job, you will also earn significant tax credit (tax amount will be upto 20% lesser than what you pay in tax currently).

Massive_One (Massive_One) 2020-01-14 15:27:24 +0500 #12

how about Meezan Bank investment ?

haroon47 (haroon47) 2020-01-14 16:35:43 +0500 #13

I have also heard about it. One of my friend has done investment and according to him its safe. The margin keeps on varying from 10 to 12 percent keeping in view the Islamic mode. You can with draw the profit monthly, quarterly, yearly or you can even invest the profit with your capital amount to earn more.
Genuine investors are requested to please step in and give their feedbacks related to Mezan Bank Investment scheme.

Massive_One (Massive_One) 2020-01-14 16:39:24 +0500 #14

yes, and 10 percent of 5 million means investor can get around 40-50 thousands a month, which is pretty handsome amount considering the safe investment!

haroon47 (haroon47) 2020-01-14 16:48:06 +0500 #15

Yes actually. Lets see if we come across some genuine investor who can guide us better.

ahmed.shaikh1133 (Ahmed) 2020-01-14 17:03:39 +0500 #16

That's one more good option of investment. If the return on investment is actually this much. Let's see if an experienced Pakwheeler guide us on this.

Massive_One (Massive_One) 2020-01-14 17:05:49 +0500 #17

You can actually call Meezan helpline and tell them you have money to invest.. they will not let you sleep in the nights by calling you again & again to invest with them : ) and you can ask the details from them (and if you do, let us know too : ) )

ahmed.shaikh1133 (Ahmed) 2020-01-14 17:10:47 +0500 #18

Haha, I have experienced this once. Don't know from where a sales representative got my number, I was not even interested in such investment at that time. He used to call me every other day..

A personal experience is usually different than what a sales person tell you. So it's better to wait here

khurem (khurem) 2020-01-14 17:12:03 +0500 #19

If you are finding this 10-12% return high, mutual funds returns are even higher (around 12-14% on fixed income ones) and there is tax benefit too. Invest in an income fund if you do not want to take risk, if you want, then equities or a mix of the two. Most major banks have their asset management companies running a host of mutual funds.

If due to the above posts you like Meezan bank, then invest in Meezan's Islamic money market fund. You would need to call Al Meezan Investment management company which is Meezan's subsidiary. You can check HBL or UBL funds too.

Procedure is simple, just need to fill a form and your money is invested. You can take out the money any time you want. Ask someone from them to visit you and tell about everything including how to get tax credit.

SER_GTR (SER_GTR) 2020-01-14 17:29:01 +0500 #20

Money market is safest with low risk and good returns..varies up down as per market but its good and safe

major problem for most of people....is that amount of 5 millions are shown in tax returns ..if yes...its best option

if not you cannot invest as you won't be able to open your investment account anymore with them as you don't have income tax return for such amount or source of income...