Land Investments Are Profitable, But There Are Drawbacks Too!

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ACCURATE.CO The demands of every human life will continue to increase with age. Various important events will come to you from birth to old age. Like going to college, getting married, having a family, and even retiring. Not to mention other additional needs such as taking a vacation, buying a new car or house.

Without good financial planning, it is difficult to meet each of these needs if you only rely on savings and monthly salaries. In short, by investing, we can begin to prepare for future needs by utilizing the funds we have today.

One type of investment for the long term is investing in land.

Talking about land investment, it also has advantages and disadvantages. Although land prices did experience a multi-fold increase during the 2012-2013 property boom.

This is due to the increase in commodity prices at that time. In fact, the increase in land prices can be said to be irrational.

Over time, land prices have been correcting themselves more and more. This is a sign, land investment is now starting to get excited again.

Profit :

1. Land prices tend to rise

The increase in land prices tends to occur every year. Apart from inflation, this is also influenced by the scarcity of vacant land. However, the population continues to grow and development continues, thus requiring land or land.

The percentage increase in land prices depends on the location of the land. Generally, the increase reaches 20–25%. However, if the land is located in a developing area with good access and infrastructure, the increase could reach 100% to 200% within a few years.

2. Has Added Value

Having added value is the second advantage of land investment. If you have a large enough land, you can multiply the land investment you have.

The method?

You can create housing with a cluster system.

That way, automatically the price of your land will become more expensive and of course the profits you achieve can bear fruit because you can sell 5-10 houses.

Keep in mind that access to infrastructure still has to be considered so that the cluster you sell sells.

3. Does not require much maintenance

Compare when you invest in a house or shop. As an owner, you must prepare funds for repair costs or home maintenance costs. This does not apply when you invest in land.

4. Impossible to Lose

Unlike other investments such as gold which may be stolen or lost when your area is hit by a disaster, land investment is unlikely to be lost.

5. Can be used for other businesses

One of the advantages of investing in plots of land is that its designation can be transferred to other businesses.

If your land may be near a school or work place, you can use your vacant lot for parking.

Another option, if your hobby is gardening, you can also use the land for gardening while waiting for the maximum increase in capital gain.

Deficiency :

1. Need Big Capital

If you want to buy land in a good area, in the sense of being in a city or near a city, of course you need a lot of money to buy it.

2. Can become unproductive land

If you own land and leave it empty and unused, you won’t be able to get anything.

Therefore, you have to work around this by building properties on it.

3. illiquid assets

Liquid assets are assets that can be easily converted into money in a short time. For example gold and savings.

On the other hand, land requires a long time and process to sell it. Thus, land cannot help when you need money quickly.

4. Other Costs Drain Pockets

If the land is not used for anything and is only left for a long time, be careful that your pocket can continue to drain.

The high taxes, maintenance fees, especially if you neglect to pay and pay attention, it could be that your land stake will be reduced by someone else.

Worse yet, it is also possible that your land will be misused by other parties.

5. Selling power depends on location

One of the mistakes that are often made by people who invest in land is not being careful in “reading” the location.

Location is an important factor that determines the capital gain of the land you buy.

For example, land located in a squirrel-prone location usually has a low price.[]

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