It isn’t smart to jump right in when making a big investment. You need to take into account many important factors. Check out these great tips for investing in land for profit.
Location
One very important factor to consider when investing in land is the location. This is an important determinant when appraising the value of this type of asset. One key factor you need to consider is whether the land is located in the countryside or in an urban area. A rule of thumb is, properties in an urban area would have greater value than those in rural areas. This is mainly due to the trend brought about by supply and demand.
Since a smaller portion of the population would be interested in purchasing land property in rural areas, those properties would be available at a lesser price. As more buyers compete for urban lands, it is the sellers that would then have the leverage to be able to price higher and wait for the right offer.
Surrounding Environment
A good location is not only about whether the property is in a rural or urban area, you would also have to consider the surrounding environment. A residential land located in a run down area of the city would certainly be less valuable.
You would also want to consider if there is a church, a school, or a supermarket nearby, as they work great at increasing the market value of your property. In addition, the proximity to landmarks, parks, playgrounds, libraries and historic areas is also important. Also, the value could be hurt if the land is near a prison, jail, adult club, power lines, train tracks or other similar places.
Existing Routes and Availability of Transportation Facilities
Existing routes and available modes of transportation are two more important factors that determine the value of a land property. Not only would they be viable residential lands, it would be easier to get planning permission for building properties when transportation facilities are already in place.
Electricity and Water Supply
Whether you are looking to purchase a residential land or an area that you wish to develop, considering availability of key services is important. An area with a poor source of electricity and water supply would be a bad place to set up your residence or would be costly to develop.
Resist the Impulse
Keep in mind that purchasing a piece of land is a major investment move, and this is not something you would want to do impulsively. You should never make an offer without thoroughly inspecting the property, lest the seller mistake you for a lenient decision-maker. Purchasing land requires that you have good negotiating skills and that you are good at leveraging your position.
While the banks are trying to cope with credit dilemmas and the values of stocks may continue to face uncertainty, you are shielded by the security that can only come with a tangible asset. Unlike paper value that’s always subject to high risks, you rarely lose when investing in land. This is especially true if you follow all the necessary precautions to make sure you make a wise purchase.