“Land is the only thing in the world that amounts to anything, for it’s the only thing in this world that lasts. It’s the only thing worth working for, worth fighting for…”
– Margaret Mitchell, Author, Gone With The Wind.
The land is one of the most sought-after assets in the world and for all the right reasons. Land is one of the tangible assets whose value appreciates over time. If you are looking for an investment opportunity in Pakistan that will give you financial freedom in the future, we suggest you invest in land in Pakistan.
This blog brings you a concise yet informative list of things you need to know about land investment. To explore more about investing in vacant land in Pakistan, keep on reading.
Do your due diligence:
First of all, ask yourself: should I buy land?
Before investing your money in anything, make sure you do your due diligence. Before finalizing any piece of land, you should make sure that these factors are considered. To give you a general idea, consider the property’s zoning, demand for that type of land in the location,
the land’s current value, future prospects or value, annual property taxes, public access to the property, amenities, taxation policies, facilities such as water, electricity, and sewer.
Also, make sure you do not ignore the potential restrictions for the area based on local zoning laws.
Know the place:
There are certain essential things that you should consider before finalizing your purchase. You should look for certain things in a parcel of land, and there are some red signs and warnings that you should acknowledge and resolve at your earliest.
First of all, check the ground and see if it is solid enough to accommodate your building plans. Then, check the utilities such as water. Is water accessible via a well or city water system? If you are an investor, make sure you also consider the nearby properties and see the condition of surrounding properties that might affect your property.
On the legal side, make sure you double-check and verify all the land documents and owner details. See if the seller has any agreements with them?
Moreover, also consider the infrastructure of the place. Ask yourself: Is there road access? Will you be able to get any large equipment you need into the property? Are there any zoning issues that could hamper your future plans?
Last but not least, do not overlook the feasibility reports of the land. Hire professionals and get topography, soil, drainage, and other similar words done.
Rethink about loans:
Buying land is more complex than buying a house. This is because the land is not the buyer’s primary residence, and it is pretty easy for the owners to move on from the property during financial crunches.
Speaking of financial institutions, most banks require a 20-50 per cent down payment, and the interest rate is also higher for land. Land investment is best suited to people who have a diverse portfolio of real estate projects.
Take into account the additional expenses:
When you invest anywhere, always consider the indirect costs associated with your best land investment.
It is a myth that land does not come with indirect costs. For example, there are development costs associated with the ground. Even if you do not develop the land, you will still incur expenses to maintain and upkeep the property. You will have to pay for the raw materials used to make the boundary of your land; you will have to spend money on general land maintenance regularly.
Remember the taxes:
If you are into buying and selling land, you might face a different tax bracket. In many countries, investors are eligible for small business and self-employment tax credits.
But if you are not into buying and selling land, the tax bracket might be different for you. Usually, noninvestors face more taxes than investors. In these cases, even if you are not making money through your best land investments, you still have to pay property taxes.
Of course, there are a few tax deductions that make the whole thing easier to swallow. You just need to make sure you meet all the requirements and itemize your deductions on your tax return.
Know the laws:
Before putting your hard-earned money anywhere, it is essential to know the rules and regulations about real estate. Most importantly, learn as much as you can about the easement. An easement is a right which the owner or occupier of certain land possesses, as such, for the beneficial enjoyment of that land. An easement is a nonpossessory right to use and/or enter the real property without having it.
In short, this means that local utility companies, neighbours, or the general public may use the property.
Before investing in a parcel of land, make sure that you know whether the land is under easement or not.
Liabilities towards injuries:
Some properties are located in dangerous areas or sensitive areas. In such cases, you might also be at risk for a lawsuit if someone becomes injured or dies while on it. To keep yourself away from suits and such circumstances, install “No Trespassing” signs on the property. Also, make sure you know any injury risks on the property and take measures to repair them. Another way to secure yourself is comprehensive property insurance. Interestingly, land insurance costs are low as compared to insurance on the occupied property.
Emotions play a role:
“Be practical as well as generous in your ideals. Keep your eyes on the stars, but remember to keep your feet on the ground.”
― Theodore Roosevelt.
In real estate or any other form of business, make sure you take control of your emotions and do not let your feelings play with you. Human beings are emotional creatures. They use their feelings to guide their decisions. They are not always right. Wise people always use logic and facts to back their findings. Think of your land as purely a business investment and logically negotiate to get the best possible price.
Go for low-cost land:
If you are a new investor, we suggest you go for low-cost land as your first investment property. Real estate investment requires knowledge, skills, and abilities, and it is always a good idea to go for properties that lie in the lower to mid-range price. This thing will keep you far away from additional risks and frauds.
Know your partners:
As a first-time investor, you need to be extra careful while choosing your partners – such as how comfortable you are with them and the implications of a partnership agreement. Choose your partner wisely to stay away from fraud and other financial losses. Partners affect the business significantly. You could earn a good amount of money, or it might turn into a disastrous experience leading to financial loss.
So, these are some of the things you need to know about land investment. Buying land as an investment is the perfect way to secure your money. It is safe to say that land investments and owning land allow you to gain financial freedom.
We hope this blog will give you crucial land investment tips.
Give this blog a read and know all the ins and outs of land investment in Pakistan. If you have any other suggestions or queries, please feel free to leave a comment in the comment section below.