Real Estate

The advantages and disadvantages of buying land as an investment

Some say that land is the biggest investment a person can make. Every year more people are saving or borrowing to buy land. Some people buy it because they don’t have a roof over their head, while others buy land as an investment for the future. While buying land is very lucrative, there are some advantages and disadvantages to buying real estate as an investment, and here are some of them.

Buying land is advantageous because it is one of the few assets that experiences such an exponential increase in value over the years. The land is almost immortal and therefore is one of the few assets that is passed down from generation to generation. In fact, unless there is a great natural calamity, the owner of the land will always have a remuneration, even if his land is destroyed. Along with gold, land becomes the most expensive and valuable asset with the longest possible life.

Another advantage of buying land as an investment is the exponential increase in the price of the land. Every year, real estate prices experience a price correction that dramatically changes prices per square meter. This amount is arguably more than any amount of interest a bank would provide, or the returns from any small-scale business you have invested in.

Buying a property as an investment is also the safest, because this is a resource that will always be necessary and will never go out of style. In fact, some financial experts consider real estate to be a very valuable asset compared to gold, due to the ease of use that can be found for real estate. Whatever the financial situation of the country or the person, they will always need land to live and do business.

Along the same lines, owning a real estate property also has some downsides. The first downside is that even though the price goes up quite well, you will always be in a losing business when you sell your real estate, because you could have made a better amount next year, or even six months later.

Another downside is that the cost of real estate owned by a person can drop suddenly due to factors over which you have no control. For example, sometimes the cost can decrease because the land becomes landlocked and cannot be accessed by road, air, or sea. In other cases, land can become cheap because the government has not provided the right kind of amenities and services, reducing the livability of the place.

Yet another disadvantage is the cost of real estate. The cost is so high that people have few assets left to experiment with, forcing them to put all their eggs in one basket.

Due to these disadvantages, it is necessary for a person to research the area well before finally registering on the dotted line.