The value of land has been soaring over the years thus making it a highly profitable investment alternative. Because land is a finite commodity, it becomes more valuable as the years go by. So if you want a stable medium to long-term investment that offers the potential to earn astounding returns, then why not consider a land investment?
The continuously increasing population and migration of more people to towns and cities has brought about an ever increasing demand for housing. Because of the growing population, there is a need for towns and cities to increase in size, thereby leading to mounting demand for the development of the surrounding land. All these factors are what make land investment an appealing proposition.
The benefits of land investment
Investing in land has a number of benefits for those who want to take advantage of it:
* Price negotiation. When you purchase land, you have the opportunity to negotiate the price with the vendor especially if you’re dealing with a motivated seller. Oftentimes you can buy land priced below market value so you earn profits on the day of purchase.
* Low risk. Land is one of the safest investments there is. Because there is a limited amount of land, the price of land generally goes up over time. Since the number of households is set to grow rapidly, land remains constantly in demand.
* Strong returns. Due to the soaring demand for houses from an ever increasing population, land investment offers the potential to earn healthy returns. Investors with a 5-year land investment endeavour earn the equivalent of 30-35% annually which can equate to an estimated 400-450% of compounded returns.
* Passive income. Investing in land is completely passive which makes it a popular option with many investors. Land investment is easily managed thereby making it a passive and hassle-free strategy.You can even rent your land out to people who want to put horses on there for grazing or as a car park for example to generate an income in the meantime.
There is a significant demand for land for sale especially in London. As a result, there has been a rise in the price of land. The Government’s Valuation Office Agency pegged the increase at 23% – a rise that comes as the performance of shares and stocks go downhill. The agency predicts that land prices will soar by 8-9% annually in the next couple of years. Meanwhile prices of residential land for sale witnessed an astonishing eight-fold increase over the past two decades.
What to remember
Before you enter the land investment scene, it’s best if you have performed thorough consideration first. Be sure to exercise absolute care in your entry to the world of land investment because the quality of that entry influences your departure. Make sure that the land investment provider with whom you’re looking to make an investment with will provide you with a clear-cut entry to ensure that you will have a clear and concise exit strategy. Also be very clear on whether the land you are buying has planning permission or not and if not, then what are your realistic chances?
With a land investment, you do not have to be burdened with active management during its entire run. As long as you have made a wise choice by doing your homework beforehand, you will have the opportunity to enjoy an investment that offers the potential to reap soaring returns.