By Dr Suvrokamal Dutta
There is no doubt in my mind that in last few years there is increasing interest in investing in land rather than constructed properties. I have discussed this phenomenon with a few real estate experts and most of them agreed that this trend has some merit especially when you take into account the fact that land value appreciates while the value of a construction depreciates.
All in all, one can safely say that buying land in growth sector always makes sense. Though, it is of paramount importance that one should approach such land purchase with due caution and proper research.
Theoretically speaking, it is worthwhile pointing that purchasing land as an investment normally pays off only as a long-term venture, with a minimum holding period of around five to ten years. “It is definitely not safe to purchase land without acquainting oneself with the local market and the legislative dynamics of that area,” pointed out Shraddha Nigam, real estate expert.
As an investor, always remember that purchasing land situated near a housing scheme calls for extreme caution, since one may inherit the covenants and restrictions applicable to the housing scheme.
In my opinion, while purchasing a plot as an investment, it’s an absolute necessity that you ensure reasonable proximity to pivotal roads and of course access to water and electricity. If experts are to be believed, one should be very clear regarding the kind of taxes you will incur and whether the plot has a permit for the raising of residential/ commercial structures.
More often, the value of a plot of land in any particular location depends on what the government will permit to be done there and on the success dynamics of the society in which the land is situated. Point to be noted here is that a plot’s value will appreciate if there are developments in the vicinity to make this happen.
It has come into the notice that quite a number of times, investors purchase land on the basis of anticipated value- something like a mall, multiplex or office block scheduled to come up nearby. In case if the anticipated development fails to materialize, the plot will fail to appreciate. On the other hand, land will also fail to appreciate if it is in danger of being taken over by the government for its own purposes.
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