Can I Invest in a Company That Buys a Property, Rents it, and Gives a Monthly Fixed Ratio Profit?

Answered by Mawlana Ilyas Patel

Question

I have invested my money in a company that buys a property (apartments) in a person’s name and rents it out. They give me the property’s rent in a fixed ratio every month, and the contract will expire after three years.

And I’ll get my invested money back, and they won’t give me money anymore, and if I want to own that apartment, I have to pay back the money I got in these three years, is this a halal investment?

Answer

In the Name of Allah, the Most Merciful and Compassionate

I pray you are in good faith and health. Thank you for your question.

Yes, this would be permissible and a halal investment subject to the terms being clear, and your profit ratio every month is clear, too. All parties must share the potential for profit and the risk of loss. Also, if you want to own the property, you must return the money as it will pay towards owning the apartment. [Taqi Usmani, Fiqh al-Buyu’]

I would like you to go through the valuable answers and links below. You will receive guidance and direction in sha Allah.

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I pray this helps with your question.

[Mawlana] Ilyas Patel
Checked and Approved by Shaykh Faraz Rabbani

Mawlana Ilyas Patel is a traditionally-trained scholar who has studied in the UK, India, Pakistan, Syria, Jordan, and Turkey.He started his early education in the UK. He went on to complete hifz of the Quran in India, then enrolled into an Islamic seminary in the UK, where he studied the secular and Alimiyyah sciences. He then traveled to Karachi, Pakistan.He has been an Imam in Rep of Ireland for a number of years. He has taught hifz of the Qur’an, Tajwid, Fiqh, and many other Islamic sciences to both children and adults onsite and online extensively in UK and Ireland. He was teaching at a local Islamic seminary for 12 years in the UK, where he was a librarian and a teacher of Islamic sciences.He currently resides in the UK with his wife. His personal interest is the love of books and gardening.