The demand for commercial plots has increased by 15 to 25% in the last three years. This is because purchasing vacant plots has proven to be a lucrative option for investors, since these plots require minimal maintenance and are relatively easy to resell.
If you are thinking of purchasing a commercial plot, here are a few guidelines that you should keep in mind:
¤When purchasing a plot, make sure that the ownership title is in the name of the person you are buying it from. The seller’s name should be on all relevant property document; these include the transfer or allotment letter, tax payment receipts, and receipts of conversion fees, if the plot was initially a residential one and later converted for commercial use.
¤In order to prevent any future objections with regard to ownership, place a notice in a newspaper that conveys your intent to purchase the plot in question. If no claim to the plot is made within 15 days to publishing the notice, a clearance certificate will be issued by the concerned authorities (including Cantonment, DHA, LDA and KDA). This certificate is essential for the transfer process.
¤Have soil testing conducted by qualified surveyors; the results will define the quality of soil and its characteristics, which will dictate type of construction that is possible.
¤Check the construction of saleable area (COS) ratio; this determines how much construction is permitted on the plot. In most neighborhoods, the ratio ranges between 1:3 and 1:5.5. The higher the COS ratio, the higher the permissible square footage of the built-up area.
¤One of the most profitable uses for a vacant plot is a paid parking-lot; this option give a substantial ROI (return on investment).
¤Do not leave a commercial plot for too long. Being construction work within six months or have boundary wall constructed to keep it secure.
By Muhammad Shafi Jakvani. The writer in CEO, Citi Associates, Karachi.