Investing in Land: The Pros and Cons

Investments are a great way to make your money work for you. If you’ve got some spare cash, the idea of investing and seeing your money grow might be tempting. But, it’s a little more complicated than deciding to invest and doing it. You can make a small investment, or you can invest everything that you’ve got. You can invest in multiple places, or put all of your eggs in one basket. You can invest and then sit back to watch it grow, hoping for the best. Or, you can make the kind of investment that takes work to become something extraordinary.

One of these such investments is land. Looking for a forest for sale, or investing in other large pieces of land comes with pros and cons, and if you are considering it, you’ve got a big decision ahead of you. Here’s a closer look at some of the pros and cons of investing in land to help you make it.

Pro and Con: Supply and Demand

Land isn’t infinite. It doesn’t just keep coming. We can’t create more of it, and, empty land, over time, is running out. This means that there’s not a huge supply, but there can be a massive demand. This is both a pro and a con. On the one hand, the limited supply might mean that you can’t afford to be fussy when finding the right piece of land to invest in. You might just have to take what you can get.

But, on the other hand, the limited supply and finite nature of land investments mean that the demand is continuous. This means that unlike commodities like gold, the price of land is unlikely to fluctuate drastically over time.

Con: It’s a Long-term Investment

Some investments, are made quickly. You decide that you want to invest, and you do it there and then. Then, when you can get a reasonable price, you sell, or you trade your stocks. When you invest in land, it’s a little more complicated. It takes longer to buy land, and even longer to sell it on again later. Investing in land is a long-term commitment.

Pro and Con: It’s a Big-Ticket Investment

Land is expensive. You can’t just buy a bit of it. Only those with a lot to invest can purchase land. You’ll need substantial savings to get started, and many people simply can’t afford it, meaning there might be a lot less competition and you might get a good deal.

It can also be hard to get a loan to buy land. Banks will happily lend people money for a mortgage on a property. But, the land itself is much harder to get financing for.

Pro: You’ll Have Options

When you invest in land, you are giving yourself options. You could keep it as it is. You could build yourself a home. You could use the land to start a business. You could build flats and rent them out to others. It’s a great chance to start something new and make more money in the future.

Pro: Full Ownership

When you buy a house, you rarely own the land that the house is built on. Many of us are paying leasehold fees for the use of the land. Buying your own land to build on, means that you own all of it. A lack of loan options for land also means that you’ll own all of it straight away. This land is a tangible asset, that won’t wear out or devalue over time. It’s all yours, and its value is stable.

Cons: Permits and Approvals

Just because you own land, and you’ve paid cash for it, doesn’t mean that you can do whatever you want with it. You can’t just go out and build on it or dig it up to create a new structure. You might not be able to build on it at all, and if you can, there are bound to be laws and regulations.

How long planning permission and approval takes to come through depends on where you live, your local zoning laws and when you apply. But, while you are waiting, you won’t be making income off anything that you one day hope to build on your new land. In fact, you can find that your land costs you a lot more than it earns for a long time to come.

Vacant land can be a fantastic investment, as long as you are prepared, have a plan in mind and know exactly what you are letting yourself in for. Make sure you do plenty of research first, and it could be an excellent investment for your future.

No comments