Land investment - Simplifying the Myths

You must have often listened to statements like “Invest in land, only when you have lot of disposable income”, or “Only the rich can invest in land”.

But what if we told you, that all these statements are completely false, and you can invest in land as well? Wouldn’t it be a moment of pride to create your own land bank?

Let us make it simple for you by talking about some myths, when it comes to investment, especially in land.

Myth no. 1: Land is a costly affair

It is definitely true that land is costlier than any other normal investments like fixed deposits, mutual funds or gold. But this has a twist to it. Let us take a simple example. Imagine that you have to buy your dream car, probably a BMW. Is it possible for you to go out and buy it tomorrow? No, right? You will probably consult your financial advisor, check your balances, think of some future expenses, evaluate all options and ask few of your friends; before actually buying the car.

The land that you can own, is similar to your dream car. It is not possible to buy it without having enough knowledge about it. Here, your land developer, or land investment consultant comes into picture. As we always say, never invest in anything, without knowing it thoroughly.

So yes, land is costly, but so is your dream car. With proper planning of investments and balances, you can start to create your own land bank.

Myth no. 2: Too many trips of government offices!

This is one of the most common myths that one comes across. That there is too much red tape, when it comes to buying/investing in land. On the contrary, with the new rules & guidelines in place, buying land is as easy as investing in a mutual fund. If your papers are in order, and in accordance with the guidelines, buying your first piece of land is a cake walk. Make sure you have someone knowledgeable with you, who knows the ins and outs of land investment. The best way to learn, is often from another’s experience. Remember, it is not your job to buy land, it is your job to just commit the investment. A good consultant is someone who keeps his client well informed and takes care of all the necessary paper work needed to create your land bank. To be on a safer side, make sure your land consultant has had an experience of dealing in varied types of land in varied geographical areas.

Myth no. 3: Land is a dead investment.

Contrary to the popular opinion, land is an investment which will keep giving you for life. Unlike certain other investments, land is limited. It cannot be increased in any possible way. Therefore, it naturally has higher demand. Something, which is scarce, is always wanted by many.

Make sure you stay away from this myth. The value of the land you buy always, mark our words, always appreciates. Buying land is not hunting, it is more like farming. It takes patience, persistence and decisive thinking. As it is often said, “Great things take their own time”. Investment in land is not for quick winners, it is for those with a long term vision. You will immediately get food, once you hunt, but the taste of self-grown crop beats the best hunt!

Myth no. 4: Why buy land, when I don’t want a second home?

Before making any investment, we always ascertain the purpose of our investment first. For example, we take out a policy for our child’s education, another policy to make our retirement better, and another to ensure our goods/property. Though the primary form of investment is insurance, the purposes are many. It is the same case, when it comes to land. It can be bought for sale after appreciation, building a second home, cultivating on the land, or even for a commercial purpose like a resort or a hotel. You need to ascertain your purpose first. Once your purpose to invest in land is clear, everything from selection to utility to sale, gets in order.

We hope we have demystified land investments a bit for you today. Patience is the key in every investment you make.

A notable investor from the US once said, “Never wait to invest in land, rather, invest in land and then wait.”