Investing In Land: What Are Its Risks & Benefits
Real estate industry is growing tremendously throughout the world. Majority of the people are interested in investing in land. Land investments involve risks and benefits depending on how you play your cards. If you play your cards correctly, the benefits are substantial. This article exclusively goes through the risks and benefits of investing in land.
Benefits of Investing in Land
Investing in the land comes with various benefits. These include;
Investing in land gives you possession of a high on-demand asset. Buying a good land at a perfect location makes it a valuable resource. Even if you are not earning from it at that particular time, don’t sell it off. Its value keeps appreciating through the years, and it will give you huge returns in the long term.
For this to be more sensible, a land that was worth a hundred thousand ten years ago is now going for more than three million. The Arizona land partners give you perfect opportunities to buy land asset according to their previous values.
With them, you have a chance to invest in the more great Phoenix land. Buy the land going for low price and wait rather than wait and buy when the prices have already appreciated.
“Hands Off” Investment
Owning a vacant land relieves you some of the disturbing issues. You don’t have to stress yourself about tenants, fixing leaks, toilets, mould and other problems associated with possessing buildings or houses. Land is a good investment that will give you peace of mind. The land sits there, unchanged after buying it.
When looking to invest in land, the competition from other buyers is low. This gives you high chances to obtain a better deal easily as compared to investing in other assets. More so, with a small budget, you can be able to purchase now then build later.
Risks in Land Investment
Though possessing investing in a piece of land seems to have lots of opportunities, you should also be aware of the challenges and risks involved in land investment. Some of the significant risks include;
One of the major uncertainties about land is that you do not know what is beneath the soil. The soil may have high levels of asbestos or radon or may be unfit for building on. If the land is located in a flood area, it may be costly to get flood insurance and difficult for you to close a deal with an interested client.
Access to Facilities
A good land investment requires it to be near to essential facilities such as electricity, roads, internet, water and sewer. If your land is located in the very remote, areas, you will need considerable investment to reach the potential developments that you are aiming for.
Zoning Classification and Restriction
Each town has a plan on how the land should be used. You need to ensure the investing you are planning on the land fits the town use description such as residential, commercial, industrial or agricultural.
Other risks that come with investing in land include restrictions on land development size including height, floor area ratio, accessory building, lot coverage and setback requirements.
Before deciding on investing in land, you need to make proper consultations with a financial advisor. Weigh whether the benefits outweigh the risks. You can then go forward and make the land investment. Only invest if you know what you are doing.