Buying land as an investment is generally viewed as a good idea. It is an investment that opens up opportunities to develop or to farm or, if in the right place, to ride the wave of market appreciation and to simply return a profit when you sell after a few years. But, owning land is not necessarily easy or cheap. The questions of what to do with it and how to help increase the value are very real. So, if you find yourself with some spare cash that you are considering putting into land, here are a few ideas that might help you to realise increased value on your speculation.
One of the most obvious things to do us to put a structure on the land – in short, build. The sad reality is that building is expensive. While buying land is one thing, paying for architects and builders is quite another matter altogether. The costs spiral very quickly. One way to offset this is to look at the feasibility of building kit homes. These solutions are becoming increasingly popular and cost-effective solutions. Easy to install and stylish to boot, this is almost like flat-packed Ikea furniture, but it is a whole house. It is hard to go wrong.
What is it good for?
Unless you are very comfortable financially you cannot really afford to simply buy land and leave it. You need to find ways to maximise the return on your investment. So, consider what can be done to derive additional value from the plot. Does it work as a place to grow vegetables? Could it be used as a camping site? Is it worth developing? What about using it as a place for neighbours to park their cars? Whatever the best solution, make sure that you are thinking about what can be done with the land. If it is not working for you and contributing to your monthly cashflow then it is almost certainly an asset that you need to get rid of.
Any piece of land that is not connected to municipal services and utilities is going to be cheaper than one that is. You don’t even need to make use of the utilities, just having them available is an immediate boost to the value of the property. And if municipal water and electricity are not options, then look to coming up with your own solution. It might mean installing a borehole, building a dam or hooking up solar panels. It could also mean the digging of a septic tank. Whatever it is that needs to be done, these are all great ways to add value to the land. In short, if and when you want to sell they will give the agent something to crow about. Additionally, you will be able to claim back as a tax deduction any costs that you have sunk into the property in an attempt to increase its value. So, don’t be shy to spend – just make sure that you don’t over-capitalise.