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What Type of Land Should You Invest In?

Gregory Akerman
 


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Investment in land is one of those investments where the chance of it going bad is practically nil. There are different types of land that can be invested in. You can invest in residential, commercial, recreational, agriculture, and timber land. It is your selection of which type of land should you invest in, and that is likely to be challenging. You have to choose land according to your present and future needs, and at the cost you are willing to pay. Always remember that land assets have three characteristics i. e. scarcity which cannot be created, durable and immovable. Each land type has it positives and negatives. Here are some things to keep in mind when deciding what type of land to invest in.

Residential lands

The first thing you should do before buying land for residential purpose is to make sure that it is close to a commercial location, public amenities, and schools. So, look for the following features before you go for buying one.

  1. First of all see whether it fits your home plans or not. Show your land and home plans to a good architect or a planner who can give you good advice. It will be better to change the home plans according to the land type and size.
  2. Secondly, make sure that the facilities like gas connection, schools, hospitals, and airports etc. are available without much difficulty. If the land has any private roads, look for the common maintenance agreement and check whether all owners are signed mutually or not. This will allow you to apply for the loans without any difficulty.
  3. Before the final paper work and payment be sure that you have carefully checked all the boundaries and documents. Besides, confirmation of land's approval is very necessary because residential lands are lands within an urban boundary or within a designated residential area.

If your intent is to develop the land for residential purposes or as a way to make some money by selling it to a developer, then you should invest in residential lands.

Commercial lands

Commercial lands must be selected according to its location and suitability for business purpose. While selecting commercial lands, look at the present day benefits as well as calculate and determine the benefits to be had in the future. After your selection, you should employ a good architect for the construction purpose as well planned and well organized buildings will be sold quickly.

Before you invest in commercial lands, obtain an expert opinion on your land selection. The return from your investment in commercial lands is what matters a lot. Moreover, the price of the land is calculated by estimating the present value and the future net returns from the land. So for the best commercial lands see the following features:

  1. Location of the land.
  2. Future development.
  3. Demand at present.
  4. Value.
  5. Financial subsidy.
  6. Approval by the authority and
  7. Returns.

The productive factor, technological improvements and other related conditions also determines the land price.

Agricultural lands

If you are buying land for agricultural purposes then you have to invest in the fertile agricultural lands so that you can get good returns. As housing pressure is high buying agricultural lands near existing housing will be a wise decision. In the future you have the option to convert it for housing purpose.

Before buying agricultural lands, you should check the geographical location, soil condition, biodiversity, carbon sources, electricity facilities, water sources and other facilities in detail. You should also look for:

  1. Nearby water sources like rivers or canals etc.
  2. Land clearance.
  3. Land classification.
  4. Land quality.
  5. Deforestation farms.
  6. Echo systems.

Pricing

Another thing to consider when choosing land to invest in is the price. You cannot purchase land you cannot afford. You must know what amount of money you are willing to invest to purchase a piece of land. This will be determined by what your reasons for investing are and whether or not it is worth it. Also the price may be determined by adjustments of demand and supply in the land market. The relevant socio-political and cultural activities also affect the price of the lands in the land market.

Your decision on what type of land to invest in must be driven by what your investment needs are and what your long term goals for the land is. The cost and the different procedures must be known and carefully gone through. All in all your decision must be an informed one.

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