Land Investment
It goes without saying that land is a limited resource and as demand for good quality, well-located land reaches unprecedented highs, the supply is diminishing and naturally the value of such land is soaring. As government backed actions to remedy the current housing shortage take effect over the next twenty years, new development areas will need to be found. A large proportion of this land may have to be sourced from areas that dont currently hold planning permission, and at that point the value of such land would dramatically rise.
For many people land has become and accessible and affordable investment option and the popularity of land investment is going from strength to strength. Large tracts of investment land are now available to private investors at affordable rates and this land can have a variety of uses from grazing to outdoor pursuits. Additionally you can purchase good quality plots of strategically located land for as little as around £10,000. As the popularity of investment land rises more and more people want to be a part of it. However, even if they want to, not everybody can afford to part with a lump sum of £10,000.
Land investment companies have begun to recognise this group of people who are keen to complement their investment portfolios with land but dont want to part with a large sum of money. A new concept in Land Investment has been developed, that is said to deliver land investment opportunities to a wider range of investors and unite the benefits of equity market and land investments.
These types of companies own large acreages, with strong potential for future development, in strategically located sites where housing targets are the highest. Like equities, investors buy shares in the company and receive dividends (which are usually drawn from revenues such as farming rent and land options from property developers). When the land is eventually sold, investors receive a lump sum reflecting the lands final value.
Land is a strong investment and general increases in land values over time can be very lucrative. But if the land is given planning permission in the future then the returns could be very high indeed. The best land investment companies only deal with land that has been assessed by a chartered town planner and deemed to have high development potential in the future. In this way, the land banking company is attempting to boost the chances of making windfalls for their investors.
This option gives you the characteristics of both land investments and equity markets in that investors can add land to their portfolios but they also have the freedom to choose the exact size of their investment
- James M
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