Land investment does provide benefits, in the midst of a place that is getting smaller day by day the price of land always rises every time. It is not strange that parents used to tend to choose to buy land over luxury vehicles. But what about plots of land? is it still profitable? The following will review the advantages and disadvantages of investing in plots of land:
Advantages of Plot Land Investment
Investing in plots of land certainly has several advantages and disadvantages. In this section, we will review what the advantages are first as follows:
1. Vital Location
In general, plots of land exist in an area that is intended to be a place of housing. In order for housing to be in demand, of course it must be in a vital place so that it can attract people’s interest to own property in that housing. There are many housing estates that only sell plots of land that are ready to be built and have good access.
2. Capital Gain
One of the properties that have a significant rate of increase in prices is land. The increase will be quite felt as time goes by. It is said if the increase in land can touch 20 to 25% per year.
Of course, this has become the most interesting thing for some groups, especially investors in the property sector. Although it cannot be felt, this increase will be felt in the next few years.
3. Can be Directly Created
When buying a plot of land, the construction of a house can be carried out immediately without the need to wait for time. Once the purchased plot of land is purchased in installments, the owner can build a house on it. Just think if the house is made quickly, the price will continue to increase. Not even if it is contracted, passive income will continue to flow.
4. Investment Gives profit
The property sector is one of the promising investment gardens. Profits can be obtained up to many times the capital issued. In addition, investing in a plot of land will provide far more benefits than investing in a house. It is enough to add or create a cluster because of that the price can quickly go up.
Disadvantages of Plot Land Investment
Apart from that, there are many advantages, as previously mentioned, plots of land have several disadvantages. Here are some of them:
1. Not a Special Source of Income
A plot or plot of land has a high value and is increasing in price. However, the increase in prices does not feel immediately useful if it is not sold. New plots of land investment can generate profits if the land is marketed and makes the difference between marketing and buying.
This will be difficult if it will be used as the main income. Land owners have to wait for the land to be sold first so that they can feel the benefits. On the other hand, if a building is built and rented out, the money will flow through the rent you get.
2. Non-Liquid Assets
In contrast to other types of assets that are easily traded, land is an illiquid asset. Compared to gold, some people want to buy gold as an investment because it is not so constant and expensive. This is different from land which is difficult to sell because few people have the opportunity to buy land.
The difficulty of land marketing can also be due to other factors, not only focusing on price. For example, the location factor, plots of land outside housing tend to be more difficult to sell.
These are some of the advantages and disadvantages of investing in plots of land. Land investment does provide benefits, but it will not always be like that. There are many things that can be taken into account before investing in a plot of land.