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7 Land is your golden investment in Real Estate

Every person who is thinking of becoming rich or increasing money/wealth should be prudent enough to buy land, which is one of the best investments one can every think of. It is generally misunderstood that only real estate companies buy many acres of land and develop residential or commercial property.

As the availability of land is less and the need for more land increases; the value of land goes up. The importance of a free market economy is its equation of supply and demand.

Land has a lot of potential for growth where as a house is normally bought and sold within the margins of its market value. Waiting for the right time to buy a house or a land is not right. It is always the right time to buy property.

Investment in Land bought for a few thousand rupees some 30 years ago, gains an income in crores if sold today. This is what keeps real estate investment thriving and happening. Like Mark Twain said "Buy Land. They're not making it anymore." This is the maxim of most of our real estate companies today. Real estate investments gradually become lumpy. To liquidate the investment is not easy as not many investors are very active in this respect. This action of not being active and liquidating makes it an advantage because the property's value keeps increasing and brings you compound returns.

Indian Real estate has a great potential demand in almost every field, that is, commercial, residential, hospitality, healthcare, retail and industrial, etc. The returns in this sector are great, but not exceptional like the proverbial golden egg.

Most Indians practice leveraging by purchasing a flat/house and being happy thinking that they have made a good investment. In the long run the value of the actual house depreciates. The value of the land alone appreciates and not the value of the building. There is wear and tear in the building.

Better connectivity and social infrastructure with healthcare facilities and education institutions is driving more and more people to buy land/flat/houses in and around the cities. There is a marked growth in project launching in the recent years and the steady capital value appreciation fully exhibits this trend. The steady increase in prices attracts many investors to invest in real estate.

Asset values range from Rs.2750/- per sq ft to Rs. 3450/- per sq ft depending on the location, developer, requirements and facilities offered in the project. The changes in returns vary according to the suburbs and the fluctuation in rentals in the market. You buy a house for 50 Lakhs and sell it for 1.5 crores, that doesn't mean you have made a profit of 1 Crore. While calculating returns on investment, you must keep in mind the amount spent towards repairs, maintenance, renovation, etc.

The real estate sector will continue to be an attractive investment option probably because there is the likelihood of property in residential areas appreciating. When you compare the returns from real estate with other sectors, there is a superior return in investment. Performance of IT and ITes will have a great influence on the success of the real estate market in the coming years. Without any trouble you can recognize and choose good investment areas in the present real estate market. Currently the real estate market rates are going at a good pace and are expected to remain so for the next 12 months. Investors can make the plunge without hesitation and make a good investment.

Return is the gain or loss of a security for a given period. Return consists of income and the capital gains relative on an investment. It is usually interpreted and calculated as a percentage. The extra risk one takes ensures a high return.

There are three things that govern investment on real estate.

  • It pays fair cash on cash return on your investment. To make this happen you have to be careful and buy only cash flow-positive properties that will give you decent returns.
  • It is not a risky investment. In order to remain at very low risk while investing in real estate you have to do a lot of research, analyze, test, and review reports, etc.
  • It does not require a lot of time or managing like any other investment. Some good properties can be rented to very decent people and you can stay rest assured that your property is in good hands.
  • Therefore, one can consider land investment as a golden opportunity and a very safe investment option.

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