6 Reasons Why Owning Land is a Smart Investment

6 Reasons Why Owning Land is a Smart Investment

Investment Real Estate

Finding a good investment is a step to building your wealth. Don’t be content with the earnings from your day job, take courage and invest your money. There are several investment options from which you can gain considerable returns. Real estate is one of them.  

In real estate, buying and selling houses is a popular means to make money, and you can earn a significant amount of money with this investment. The only catch is that the housing market is now very saturated. That’s why some real estate investors turn to the land market.  

If you have some doubts about investing in land, here’s a list of reasons to convince you why it’s an excellent investment. 

Land is a Tangible Asset

Unlike stocks and bonds, land exists outside of an account balance or financial statement. The tangibility of land means that you can hold and measure it physically. In times of economic unpredictability, having a tangible asset like land serves to give you security and a hedge. 

There’s also the potential of improving or developing your land to generate higher returns on your investment. You can develop it for agricultural, residential, or commercial purposes. You can also earn cash for land by renting it out or selling it. Indeed, there are so many things you can do to make money if you own land. 

There’s Little Competition

In a housing market, you have to deal with too many competitors. Just looking for an affordable house for investment can be quite difficult to attain since sellers are more likely to take advantage of the high number of homebuyers and increase the price of a property. 

In comparison, the land market is not that saturated so there’s little competition. Buying a piece of land can be at your advantage because you won’t have to compete with too many buyers. It’s also much easier to find low-priced land that’s great for investment. The affordable properties in the land market can give you higher returns. 

Land is Affordable to Own

Since a land purchase is not that expensive, you can pay it with cash and avoid taking a mortgage and making monthly payments for it. There’s also the possibility that the cash you pay for the land is all that you need for your investment. 

Paying for the insurance and property taxes won’t also be a huge burden on your budget. If you want to improve or develop the land, this is only when expenses enter into the picture. But, overall, owning land is inexpensive compared to owning an apartment or a house. 

Maintenance on the land won’t require you to shell out a significant amount of money. You can hire people to clean up the property or you can do it yourself if the land isn’t that large. You can also have plants and ornamental flowers in it to make it look more appealing. If there are eroded parts of the land, you can fill it up so as not to turn off potential buyers. 

Potential for Value Appreciation

The value of land can increase over time, and there are several reasons why this happens. The more the area prospers economically, the higher chances that the value of the land appreciates. Land buyers want a property in an area where there are more employment opportunities and new infrastructure projects. 

Land value can also get impacted by the change of zoning laws in the area. For example, land that’s zoned as agricultural can increase in value if it’s turned into a commercial or residential property. 

Land is an Excellent Long-Term Investment

If you’re looking for a long-term investment, land is a good option to consider. You can hold the land as long as you want and sell it when its value appreciates. To make an income while you own the land, you can rent it out in the meantime. 

Estimate the potential income you can earn from renting the property out. You should see to it that the expenses that you’ll incur while holding the land don’t exceed the potential rental income. Pick an area where land appreciation is high, and make sure that there’s a high number of prospective renters in that locality. 

Now, when it’s time to sell the property, you should think of the potential profit you can get from the sale. 

Land is Easy to Purchase

It’s easier to purchase land than a house because many land sellers sell their properties privately, meaning they don’t publicly list them. Private sales make the price of the land affordable, and there are no strict credit checks. Most of the time, you can even avail of affordable financing offered by the land seller. 

Takeaway

Are you looking for a wise investment? If yes, you should invest your money in vacant land. The advantage of investing in land is that it’s a tangible and valuable asset. It’s also easier to buy land because there’s low competition in the land market. Plus, you have several options about what you can do to the property to generate income and profit.

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