General Recommendations for Purchasing Land as anInvestment

Buying Land as an asset is unquestionably an important deal to a long terminvestor. Even though, it is very little maintenance and hassle-free; landoptimization is to something every investor needs to learn before buying aproperty. This solid investment will always be worth a lot of money, if done right.And yet, there's a slight chance for being stuck with it in the future.

Capitalization of profits on raw land might sometime need years of patience.Prospective land owners should be aware of all types of potential land investments:residential development land, commercial development land, agricultural cropland, for livestock, vegetable farm, timberland, mineral production, vineyards,plantations, orchards, and recreational land.

There are a few land categories that exist and offer no value or return. These aremostly prone to natural disasters, like earthquakes, volcanoes, floods; swamps, rainwater logging, snow laden areas, hurricanes, glaciers and many more. Governingzoning restrictions are even more critical and need to be adhered to while buyingland. Like always, a good solution is to hire a seasoned real estate expert.

Are These Your Land Sellers?

Land investment can be fruitful only, if you find an appropriate seller with anencumbrance certificate. Which is possible only, if he/ she is the original owner orthe proper power of attorney granted by all the owners of the land. Some sellerscome up with pre-approved financial schemes and bank loan for purchasing land.Some might be trying to get rid of their ancestral property as they have noeconomic interest in the village lifestyle. Along with the EC, power of attorney –one should enclose a verified patta that details length, width and other dimensions.Include a survey number of the property, and the authority approval of thegoverning council for land legislation. Just make sure it’s a genuine seller beforemaking the final signatures across the dotted lines of any notarized paper.

Why Speculate Land as an investment?

Some speculations to consider:

Land acquisition spurges cash flow situation due to ongoing property taxesaccrual.

The governing land legislation could change the zones that determine landusage.

Environmental analysis and policy regulations could further deterioratethe freedom of land ownership.

Land can be held onto for a really long time until a buyer arrives.

Sometimes – it can take years beyond the age of the owner to sell evenland parcels (parts of a big share).

Getting a civil engineer to test the soil before determining the use of theland is the most decisive move for an owner. The quality of land candeteriorate, if it is not looked after properly.

When to invest in land as a property?

Contract a highly motivated seller who has no strong interest in theproperty because he resides very far.

Invest in land of a seller, who doesn’t know how to optimize their land

No outbids are possible on the land as there is no competition – hiddengold unlike commercial property.

Have money to invest enough to buy 5+ acres and yet wish to avoid banksand mortgage syndicates

Very little capital investment required to buy a parcel of land just outsidethe city.

People not wanting to deal with upkeep and maintenance of structures

Need an investment to park your cash for your future? Then buy land as aninvestment

Why buy land as an investment?

Property is a long-term tangible asset

Does not devalue or depreciate, and nothing can get broken, stolen ordestroyed.

Scarcest commodities - we have even reclaimed land from the SEA…

Little differences bring value - might be better than a no investmentsituation

Man-made structures around can spring the rate card

There are several land possession opportunities and trade ventures proficient ofproducing adequate ROI for small investors. All the investor really needs to do iskeep an eye on the location, basic necessities like irrigation and security. Rest ofthe risk that is to be taken care of is the current market value. Yes, land like anyother investment is also susceptible to economic boom cycles and recession. It’sdefinitely, affected by the game of supply and demand. - There’s much riskinvolved.

What one even needs to weigh is the opportunity cost that is the loss of incurringno interest amounts, shares, or dividends in spite of maintaining the land foralmost 20+ years.

Land is a speculative investment – it can be contaminated, claimed by unforeseennatural disasters, have governing restrictions and several other problems. Thisinvestment cannot be undone that easily, and must never be made in a rush orsimply by going by word of mouth. The owner might have to suffer severeconsequences if found to have entered into a wrong deal. By means of onlinediscussions, and general guidelines, one could definitely understand a lot aboutinvesting in land schemes. And yet, when it comes to doing it right deep down,one needs an expert land Developer/civil engineer who knows the area in and outto guide the investor with proper foresight and knowledge.