It is highly important to take good investment decisions in life to attain greater benefits in the future. People often wonder where to invest money in Bangladesh. Due to economic and political instability, sometimes decisions taken abruptly can severely backfire in the country. As a result, people lose their life-worth of savings on bad investments.
Investors in Bangladesh choose from a wide range of options to inject large sums of cash. Typically, people invest in stocks, SMEs, start-ups, mutual funds, bonds, and real estate, thinking that the value of their money will increase over the years. However, not all investment options in Bangladesh provide the same sense of security and return a profit in the long run. Sometimes economic recessions can dramatically decrease the value of your investment. Hence, you should be making careful decisions on assessing risks and figuring out what could yield the best return.
Real estate has been considered one of the safest options to invest not only in Bangladesh but also all over the globe. It is one of the oldest and most popular methods of investing money while providing a great sense of security. Even though people in Bangladesh feel a bit reluctant as the investment amount is far greater than other available options, only real estate can guarantee a significant ROI for prospective home and commercial property buyers.
In the modern era of the local and global economy, investment is quite risky and uncertain in the majority of sectors. Hence, the investors can be redirected to one of the safest options available in Bangladesh, which is Real Estate. There are several reasons why you should invest in real estate. A few of the most important ones are:
REHAB’s data suggests that the price of land in Bangladesh skyrocketed, especially in Dhaka. For instance, the price of land in Baridhara increased by 733% in the 90s and increased a further 700% in the decade of 2000s. Moreover, lands in Gulshan witnessed a growth of 267% from the 90s to the 2000s. Staggeringly, it roared up to 1000% in the following decade.
As the price of land increased rapidly in Dhaka, the price per square foot in apartments also increased subsequently. For example, prominent areas in Dhaka such as Gulshan, Banani, Baridhara, and Dhanmondi apartments witnessed tremendous growth reporting 471%, 830%, 468%, and 483% respectively during the first decade of the 21st century. Flats that cost around 20 – 30 lakh taka in the late 90s in the Gulshan area have now exceeded the value of 3 – 4 crore. Overall, from 2000 to 2021, flat prices increased by 716% and land prices soared as much as 2740% in Dhaka.
Source: The Business Standard
As mentioned earlier, the real estate industry is one of the safest investment sectors in Bangladesh. Hence, you are expected to enjoy many benefits if you invest your hard-earned money in this field. Not only it will safeguard your deposit, but also ensure you are getting a high return on your investment. The following section will discuss the major benefits that you can experience by investing in real estate in Bangladesh.
If you rent the place after you have bought an apartment or a commercial place, you are expected to earn as soon as the project is prepared. Furthermore, you have control over the amount of rent that you want to set for that place. As a result, you are expected to generate a regular stream of money each month. Another benefit is if you have taken bank loans or borrowed money in other ways, you can start repaying the debts with the rent. Depending on the investment size, you can pay your debts within a few years. After that, you are expected to generate profit from your investment. Furthermore, the revenue will also increase with time as Dhaka is a highly populated region. Hence, demand for flats is only expected to increase in the future while the number of lands remains the same.
Unlike other investment options, real estate doesn’t experience depreciation. For example, you are expected to lose money if the inflation rate is higher than the interest rate if you keep your deposits in the bank. In contrast, if you invest in real estate, the value will only increase in the future. Generally, the value of property always rises with the course of time. If you carefully plan your investment in an area that is expected to witness infrastructure development in the future, the value of that place can dramatically increase, enabling you to generate a huge profit. Interestingly, you don’t need to renovate or invest in your existing property to increase its value in the market. If your property is in a renowned area such as Gulshan, Dhanmondi, Baridhara, Bashundhara, etc., then the value of the property is expected to increase over time automatically. Even when the economy experiences a downfall, the real estate sector in Bangladesh is the safest and best way to generate a huge amount of profit.
Investing in real estate has the highest potential of high returns on investment compared to the stock market, mutual funds, or bonds. You are almost guaranteed to make a profit each month for years to come. On the other hand, the stock market is volatile and economic recessions or global economic crises can severely affect the market. Moreover, small businesses can also suffer. However, even when there’s a huge economic turmoil, you are still expected to make a profit through real estate investment. As a result, it is the safest financial prospect to invest in, which also provides a high return on investment.
Generally, people save money their whole life by investing in big projects to secure their future. For example, you will require a huge sum of money to generate substantial profit from the stock market. Establishing new businesses also requires a significant amount of money, not to mention the associated risks with it. However, investing in real estate is much easier. Almost all banks provide house loans in Bangladesh. Some banks and financial institutions even offer significantly lower interest on house loans. Even if the idea of taking a loan might be scary, you can always pay it back by making intelligent decisions. Furthermore, you get to have a permanent property after clearing out your debts. One smart move is to rent out the apartment or flat that you have purchased by taking loans and start generating money as soon as possible. Use that income to pay off the loan periodically. After clearing that out, you will have a cash flow for years to come.
The real estate sector in Bangladesh currently stands at more than 6000 crores BDT. Medium-sized flats between 1200 – 1500 square feet have witnessed around a 40% increase in value in the span of the last five years. As the capital of Bangladesh, Dhaka experienced the majority of the increase in value, while Chittagong also saw a somewhat similar build-up.
Overall, the real estate sector in Bangladesh is booming. More and more developers are entering this market and the demand for land and apartments is increasing heavily in the metropolitan area. People are mostly opting for small to medium-sized apartments and the demand for them is expected to grow in the forecast period of 2023 – 2025. The government of Bangladesh has undertaken several megaprojects and is trying to urbanize more areas by developing important infrastructures such as roads, highways, bridges, expressways, MRTs, etc. Bashundhara, Rupayan City, and Purbachal are bright examples of how new areas are becoming the center of attention and why people should start investing in real estate right away in Bangladesh. Currently, if you make a significant investment in real estate, it is expected that you will be awarded handsomely in the future. For that, you can invest in ready flats for sale in Dhaka or upcoming projects that are expected to be completed in the near future.
Currently, around 40% of the country’s total population resides in the city area. This proportion is expected to increase in the future. The sector’s growth should be continued due to the increase in urban population, middle and affluent population (MAC), and rising per-capita income. As a result, the scarcity of land and housing in all major urban centers is expected to worsen as demand for housing rises. Hence, it is a wise decision to invest in real estate while the opportunity exists.
Inflation is a common occurrence in almost every country. When it happens, the value of money deposited in the bank, purchased gold or silver, and invested money in the stock market all suffer depreciation. However, hard assets such as land or apartments are not quite vulnerable to inflation. Amid economic downfall, the value of land and apartments usually rises instead of falling. As a result, you are almost always guaranteed to have a secure future.
When you invest in an apartment or a flat, the total value of the flat will increase over time. Additionally, you have the opportunity to boost the value of your property by investing in its quality or appearance. For example, you can use luxury paint, expensive lighting, decoration, and modification or alterations in the interior or exterior to enhance the value of the property by several times. Basically, you can reinvest money in your existing property to repair any defects or enhance the living conditions, which can increase the total value of your property. Hence, you can leverage this additional value and increase the rent of your apartment or the value of your property when considering selling.
Real estate is a type of investment that can serve you for a long time. It is durable, reliable, and secure to pass on to multiple generations. So, your children or even their children can inherit the asset from you. Some people love the idea of a legacy and real estate can bring you that. Furthermore, real estate can be a great method of getting a secured retirement policy. Generally, people have an inherent will to own their abode, where they can pass their time after retirement without having to worry about paying rent or debts. If you plan strategically and invest in real estate, you can have the ability to enjoy such freedom and peace of mind.
Unlike other assets, real estate is prominent and visible. Many real estate developers are building world-class apartment complexes and luxury flats in Bangladesh, equipped with top-notch amenities. Owning such a property is a marvelous way of climbing the social ladder. It is regarded as a matter of great pride and honor to own properties in prestigious places in Dhaka. However, you should know a few things before buying luxury flats in Dhaka, as it might not align with your plan. Nevertheless, investment in real estate can help you to take a step further in Bangladesh.
The government imposes a lower tax rate for long-term investment in real estate. Insurance, maintenance, repair cost, and mortgage interest payment are sometimes the reasons why tax is reduced or exempted. Hence, lower taxes on real estate can significantly increase your profit.
The real estate sector in Bangladesh has a very promising future. More and more people are recognizing the potential of this sector and making wise decisions in this prospect. However, it is also easy to get swayed away and invest in real estate that does not have a future. This means not all real estate investment projects can bring you benefits, rather thoughtful consideration is required before you take the big decision. You must consider several factors such as the prospect of the future, currently available amenities, roads, transportation system, and future value before deciding to invest in land or an apartment. Nevertheless, real estate is still the most secure and profitable sector in Bangladesh for investment. Careful consideration and wise investment can change your and your family’s future entirely.
Ans: The benefits of investing in real estate include passive income, stable cash flow, tax benefits, diversification of assets, and leverage.
Ans: Real estate is the safest sector to invest money in Bangladesh.
Ans: The pricing of flats can vary greatly depending on the location, amenities available in the apartment, and the quality of materials and design. The price can range from 30 lakhs to 1 crore or more.