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Real LghneadTravel suitcaseThe demand for guesthouses has increased substantially over the last three years, mainly because they provide a cheaper alternative to hotels, especially if they are used for long-term stays. As a result, an increasing number of investors are opening guesthouses across Pakistan.

Here are a few guidelines to keep in mind if you are thinking about opening a guesthouse:

In the northern regions, serene and scenic spots are ideal locations for guesthouses, while in the urban centres, areas in proximity to business districts, recreational and commercial areas as well as shopping malls are the most suitable.

In the cities there are guesthouses in Clifton, DHA and PECHS in Karachi; DHA, Garden Town and Gulberg in Lahore; and Sectors F-6, F-7, G-9 in Islamabad. In northern Pakistan, there are guesthouses in Abbotabad, Chitral, Gilgit, Kaghan, Murree (and the Galiyat), Naran, Shogran and Swat.

The minimum size of a plot on which a guesthouse is built is usually 1,000 square yards; this size is ideal for a five- or six-bedroom house.

Although most guesthouses offer basic bed and breakfast facilities, a few offer shared facilities including laundry areas, kitchenettes and meeting lounges. Therefore the setup and operating costs are not very high.

Fancy amenities such as swimming pools, spas, executive lounges or libraries can be added if the owner is planning on opening a    high-end guesthouse.

The ROI (return on investment) on guesthouses usually ranges between 10 to 14% per annum.

When converting a residential property into a guesthouse, one needs to find out if the area allows commercial activity or not. If commercial activity is allowed, the concerned authorities (KDA, LDA and CDA) need to be contacted for conversion of the property from a residential to a commercial one.

– Aleena Habib
Information provided by Eternal Real Estate, Lahore and Younus Zubair Associates, Karachi.

First published in the Real Estate Section of The DAWN National Weekend Advertiser on May 25, 2014.