The Advantages and Disadvantages of Buying Land As an Investment

Some say that land is the greatest investment that a person can make. Every year, more people are saving up, or applying for a loan to buy some land. Some people buy it because they do not have a roof over their head, while others buy land as an investment for the future. While buying land is highly lucrative, there are some advantages as well as disadvantages of buy real estate as an investment, and here are some of them.

Buying land is advantageous because it is one of the few assets that see such an exponential rise in value over years. Land is almost immortal, and therefore is one of the few assets that are handed down from generations to generations. In fact unless there is some great natural calamity, the owner of the land will always have remuneration, even if their land is destroyed. Along with gold, land becomes the most expensive, valuable asset with the longest life possible.

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

Buying real estate as investment is also the safest, because this is one resource that will always be required and never go out of fashion. In fact, some financial mavens consider real estate to be a much worthy asset as compared to gold, because of the ready usage that one can find for real estate. Whatever be the financial condition of the country or the person, they will always need land to live and to conduct business.

In the same vein, owning real estate has some disadvantages too. The first disadvantage is that though the price rises quite well, one will always be in a loss making deal when they are selling their real estate, because they could have made a better amount next year, or even six months down the line.

Another disadvantage is that the cost of real estate owned by a person may suddenly decrease due to factors that they have no control on. For example, sometimes the cost may decrease because the land becomes landlocked and nobody can access it via road, air or sea. In other instances, the land might become cheap because the Government has not provided the right kind of amenities and services, thereby decreasing the habitability of the place.

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

Because of these disadvantages, it becomes necessary for a person to research the area well before they finally sign up on the dotted line.

Source by Keshawn Vaughn