What is Investment ?
Investment is one way to develop financial conditions in a better direction. The many types of investments available also make it easier for people to adjust their needs and abilities to invest. One type of investment that is quite popular and considered the most profitable is land and property investment.
The popularity that is present in the image of this land and property investment has been known since the past until now. Many people think that land and property investment is one type of investment that has minimal risk and is quite easy to manage. In fact, this assumption only comes from what is seen on the outside. As with other investments, the higher the prospect of profit that comes from investing in land and property, the greater the risk that you need to pay attention to.
Advantages of investing in land and property
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1. Can be used as a place of business
The advantage or advantages offered from land and property investment is flexibility. This flexibility refers to the ease with which land and property can be converted into other forms of business. You can turn your land and property investments into a place of business, such as a shop that you can manage yourself. If you feel you don't have enough time, you can also transfer management to another party.
In other words, you can rent out your land and property investment products to other people, either in the form of rented houses or land built for other commercial buildings. The advantages of investing in land and property are able to provide financial stability in the future, so you don't have to worry about financial conditions in the future. You can make land and property investments that you have as your main source of income or passive income.
2. Opportunity to generate capital gain
Behind the depletion of land availability in urban areas, it turns out that this is quite profitable if you have land and property investments. This is because land, houses, and other types of property are included in the needs that need to be met in social life. Therefore, with so many interests to meet these needs, the price of land and property investments that you own will increase over time.
The increase also often exceeds the initial capital you need to spend when you first acquire land and property investments. With the increase in the value of your land and property investment, you have the opportunity to get greater capital gains from time to time. You can sell land and property investment assets that you currently have, but still have the advantage of getting a promising replacement asset as well. However, keep in mind, you should not be careless when making transactions on land and property investments that you currently have, given the dwindling availability of land. Maybe the profits you get can't even be invested again in the type of land or property in the future.
3. Minimal maintenance and management
Both land and property investments have a fairly simple level of management. The reason is, you only need to pay attention to changes that occur periodically. For your own land investment, you only need to think about the neat and beautiful appearance of the land that you have not cultivated. You can occasionally incur maintenance costs just to clean your land investment assets from weeds.
As for property, there are many aspects that you should pay attention to as a maintenance step compared to land investment assets. However, basically you only need annual maintenance only. Although there will be times when the property assets that you own need a massive restoration or renovation in order to keep the building structure strong and beautiful to look at.
Lack of investment in land and property
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1. Non-liquid assets
You need to understand if your land and property investment assets are non-liquid assets. The category of non-liquid assets is a deficiency or weakness offered by land and property investments. One of the strong reasons why land and property investments fall into the category of non-liquid assets is that they are not easy to trade. So, when you need quick funds, land and property investment is not an asset that you can make as a solution.
In addition, if your land and property investment is in a less strategic location, it will also make it difficult for you to sell land and property investment assets in a fast time. Moreover, the location factor is also quite influential on the value of the assets you have. It is important for you to have other investment instruments outside of the current land and property investment in providing solutions to your needs in a short time.
2. Not suitable for novice investors
Another drawback in starting to own land and property investment is that it requires relatively large capital. Therefore, this type of investment in land and property is not a suitable investment instrument for novice investors. When you start investing, of course, the desire to get large profits is often present in your mind and head, so you decide to look for land and property investment assets in strategic locations or areas. Of course, with minimal capital, this desire will be difficult to realize.
If you choose to look for land and property assets in other areas that are less strategic, it also does not promise you to get the benefits that are in line with expectations. Therefore, in addition to the relatively large capital, in-depth and time-consuming considerations are also factors why land and property investment is not a suitable choice for novice investors.