Advantages And Disadvantages Of Investing In Land

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A land is an investment option that can open many doors to gaining profit in the future. But like every option, there are some advantages as well as disadvantages to investing in property. Here are a few points to make a simple comparison.

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Pros

Never-ending demand- Land is the kind of property that has a growing demand. Due to its limited supply, demand for land is more than ever before. Investing in land ensures revenue if maintained correctly.

Low tax requirements- Empty land requires a very small amount of tax every year. This is why investing in land is beneficial. As the owner is waiting to develop the property, the maintenance cost is very affordable.

Ever-growing price- Land doesn’t lose price. The price of the property grows over time without any further investment. Many investors only purchase land and sell it after a few years, which results in generating an ample amount of profit.

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Cons

Hard to sell quickly- It is a time-consuming process to sell land. It takes a lot of time to fulfill various requirements to sell the property to another client. In an emergency when cash is necessary, it creates a burden. In addition, many formalities including preparing government documents are also time-consuming.

Risk of acquisition- Government has the right to take the property under their jurisdiction as compulsory acquisition. In return, the owner can claim the property price as compensation. But sometimes this process gets messy. The amount which the owner receives might not be satisfactory.

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The intrusion of property- legal rights over the land often gets jeopardized by other people. Which can result in litigation and unnecessary legal costs. The auxiliary expenditure can overweigh the main cost of the property.