Land Investment - Buying and Selling Land For a Profit
For hundreds of years, Land Investment has been used as a vehicle to earn money, but it was often reserved for the rich. However, today, with the emergence of new cheaper land markets and the ability to invest in small parcels of land, the market has opened up to an entirely new category of investors.
It is essential with the investment in land that people do not get carried away by the simple purchase of cheap land. Obviously, a piece of low-cost land may seem attractive, however, it is important to remember that your earnings will only come from selling the land and, therefore, there must be some reason for the land to increase in value. A cheap land investment is excellent, but if you have no reason to increase the price, how do you expect to make a profit?
Therefore, with Land Investment there are some important factors to consider when looking at a plot of land, no matter how big or small. The first to consider is obviously the price. Is the land you are investing worth the price you are asking for today? Second, it is how long you intend to maintain your investment. Then you must compare that time with a realistic projection of what your land will be worth when you intend to exit the investment. For example, if you only want to retain your land for 3 years, but projections show that the land values ​​in that area will probably not increase much during the next 5 years, then you are investing in the wrong land investment.
Most importantly, you should consider what makes your investment in land potentially profitable. Are you simply buying a piece of cheap land and waiting for it to increase in value or have you done your homework? If you are investing in an area that has reason to increase its value quickly, then this is the true investment that generates big profits. Therefore, look for the factors that could contribute to this. For example, is your land inaccessible at this time but is it likely to change in the next few years with the introduction of a new road, rail access or air route? Maybe it is cheap at this time because the area is quite unpopulated or unattractive to tourists, but the area is beginning to win an increasing amount of tourism each year and is looking to become a hot spot in the future.
Investment in land can be very simple, but the simplest thing is to forget about the price you are paying and focus on the cost you are going to sell and how realistic it will be to achieve the returns you are looking for from your land investment. If you can not see a reason why the value of the land would increase, you are probably investing in something that will not give you the performance you expected.
If your investment in land involves growth in the future, make sure you are paying the best possible price and consider how other costs could affect your performance. For example, a large portion of land with a reasonable price is no longer a large portion of land with a reasonable price if you have to add 60% to the price to cover legal costs, transfer fees and other associated investment charges in land.
Investment in land can be one of the easiest and most financially rewarding investment types that exist. The secret is to keep a cool head and select the correct area by not seeing what makes the land good at the moment, but what makes the land look much better in the future!