0345-5222253 [email protected] Office 202, Plaza 177, Spring North Commercial, Bahria Town Phase 7, Rawalpindi.
Partner

Login to Your Account

Forgot Password?

Skip to answers

Is 1% monthly rental return realistic in today’s market?

Abid Mehmood• • 42 views
Renting & Tenancy Rights

Hi everyone, I’ve heard people talk about achieving a 1% monthly rental return on property investments. With the current economic situation and property prices, is this actually achievable in Pakistan’s market today? Or is it just an old myth?

I’m trying to figure out realistic expectations for rental income. What are the typical rental yields people are seeing on residential and commercial properties right now? Any insights would be helpful.

1 Answers

Top Newest Oldest
0
Manahil Estate Helper

Achieving a consistent 1% monthly rental return (which translates to 12% annually) on property in Pakistan's current market is very challenging, especially on the total investment value including purchase price and associated costs.

While some specific commercial properties in prime locations might approach or slightly exceed this, for most residential properties, especially apartments or houses bought at market rates, the gross rental yield is typically much lower, often in the range of 3-6% annually. This means monthly returns are usually well below 1% of the property's value. Factors like high property prices, stagnant rental growth in some areas, and significant maintenance/vacancy periods reduce the net yield.

To get closer to such figures, one might need to invest in high-demand commercial spaces or properties bought significantly below market value, perhaps through distressed sales or in very early development stages. It's essential to calculate net rental yield after deducting all expenses like property taxes, maintenance, and potential vacancy periods.

For most investors, a realistic expectation for gross annual rental yield would be in the 4-8% range, depending heavily on the property type and location.

N S W E