INVESTING IN LAND NEEDS DILIGENCE REAL ASSET
There is increasing interest in investing in land rather than constructed properties. This trend has merit, since land value appreciates while the value of a construction depreciates. In other words, buying land in a growth sector always makes sense. However, one should approach such land purchase with due caution and prior research.
Investment horizon
Purchasing land as an investment usually pays off only as a long-term venture, with a minimum holding period of between 5-10 years.
Safe purchase parameters
In general terms, it is definitely not safe to buy land without thoroughly acquainting oneself with the local market, and the legislative dynamics of that area.
Buying land situated near a housing scheme calls for extreme caution, since one may inherit the covenants and restrictions applicable to the housing scheme.
Ø While buying a plot as an investment, one should ensure reason able proximity to key roads and access to water and electricity.
Ø One should also acquaint oneself with the development plan for the chosen area – this can be established from the local administrative body.
Ø One should be very clear about what taxes one will incur and whether the plot has a permit for raising residential/commercial structures. Raising large structures is not an option on agricultural plots, which are cheaper and have a lower tax burden. If the plot is the agricultural kind, one should establish whether its status can be converted for construction purposes later on, or not.
Ø Before purchasing land, one need to investigate possible multiple ownership issue and zoning restrictions such as CRZ, NDZ etc.