Investors are constantly trying to find profitable investment options. Often the investors are competing for the same opportunities. Land investment has been around for some time now. With other areas of investment reaching saturation, it is getting popular. There is constant revenue to be earned in this sector. And if you are lucky, you could strike it rich.
Land investment can be risky. That is also true about any investment that you make. The trick is to make informed decisions and act at the correct times. There are some basic traps that you should not fall into. With a bit of assistance, you can be on your way to some healthy revenue earnings.
Land investment is a part of most investment portfolios. It is stable and quite resilient to the ups and downs of the economy. Missing out on this opportunity means you will have to invest in other, riskier ventures. Why trade in high and stable revenues for unpredictable situations? Start thinking about land investment right now.
The Positives – Land Investment
Let us have a look at some of the positive reasons for land investment.
- Limited Space: Land is limited. You cannot have any additional land. All available land is owned by someone. There are countries like Malaysia which are relatively small in size. The importance of limited, available land increases in such countries. The land can just exchange hands. You can make a multifamily home in place of a house. But you cannot do any such thing with land.
- Population growth: As the population grows, the cities start expanding. This growth requires land. Kuala Lumpur has a population of 6 million. It is expected to be 10 million by 2020. That is in 9 years from now. Can you imagine what will happen to the land prices around the city? Yes, they will rise exponentially in value.
- Low Maintenance: Land investment resembles a fixed deposit sometimes. There is hardly any maintenance that you have to do. You may want to have a fence around it.
- Easy to Buy/Sell: It is easy to buy or sell land. The survey papers are all you need. You probably got them when you bought the land.
- Tangible asset: Land is considered a tangible asset. It cannot be stolen from you. In times of economic crisis, the land price is the last to be affected.
- No insurance: There is no insurance required for land. You have no burden of additional costs.
- Constant growth: The chart of the land price is a story of strong and constant growth. There are breakout points when it becomes exponential.
There are some basic traps that you should avoid. They are not many.
- Title: Check the title to the property. Have a title-insurance. It will protect you against any title claims in the future. Squatters tend to favor empty land and make false claims.
- Lawyer: Have a strong lawyer on your side. Make sure that all dealings are done thru him or in his presence. Disputes are the only real danger for land investors. Good lawyers are the best protection.
- Property Agent: Deal thru a property agent. They will help you buy and sell at the right time. In land investment, there is a time of constant growth. Then there is a time of exponential growth. Dealers will approach you at the times of exponential growth, to sell the land and hence earn high returns. They are at the pulse of the local market. They earn when you buy or sell. The more money they help you earn, the more you will buy and sell. It is a win-win proposal.
- Survey: Ensure that the land has been surveyed properly and accurately. The land usage restriction is significant. Be sure you are ok with the usage policy.
- Bank: Involve a bank. Have a small mortgage out on the land, if not a full one. The mortgage ensures that the ownership fight for the title is never lost. Once the squatters know that the bank owns the property, they will move away. You may not have a squatter problem at all.
- Squatters: This is your biggest problem. When they see empty land, they tend to occupy it. Squatters usually belong to the lower social strata of the society. It becomes socially problematic. You should have a fence around the property. Having a brilliant lawyer and a bank loan are your best defenses against them.
- Natural Disasters: Ensure that the land is not in a region that is prone to natural disasters like floods and earthquakes. Try to invest in rich agricultural land. In the worst situation, you can lease it to be farmed.
Strike it Rich
As a land investor, you will have your stable revenues from land investment. There is a remarkable feature that accompanies this investment. Investors can get lucky and strike it rich.
- Mineral deposits: You may discover that the land you just bought has mineral deposits. This is a bit rare, but it does happen.
- Oil: Remember all the movies where you strike it rich because you find oil on your land. Well those are true stories. Oil excavation is an ongoing process. We never know where we strike oil. This is a rare occurrence, but it does happen.
- Usage: Let us say you bought agricultural land on the outskirts of the city. Because the city is growing, it needs more land. The city council announces a new area for development. Imagine that your land falls under that area. The change of use will impact the valuation of your land.
- Plan: You get lucky if your land falls under:
- Some government plans.
- An area that a corporation is acquiring for a purpose.
- Plans for corridor expansion for roads and railways.
- Your land is part of the area that a developer has chosen.
Land investment is a stable investment opportunity that is attracting attention. Timing the purchase and sale is most important. Smart investing, avoiding the traps, can fetch you high returns. Your property could soar unexpectedly, in valuation.
Can you still afford to wait around and not invest in land? Come, let us strike it rich.