The appeal of investing in land is understandable. After all, land is tangible — you can see it, touch it and even live on it. It’s also relatively stable, with prices generally moving up over time. But like any investment, there are pros and cons to making land investment in India.
Pros of Investing in Land:
Stability of property values — Over the long term, real estate prices tend to increase. By contrast, stocks and bonds can be volatile, especially during periods of high inflation or recession. However, this doesn’t mean real estate investments are risk-free — there are no guarantees that property values will rise over time.
Land values tend to appreciate faster than the rate of inflation over time because the supply of land is fixed while demand for space grows with population growth and technological advances. This means that when demand for land outstrips supply — such as in major cities where people want to live — property values will increase faster than inflation (or even grow at a rate higher than inflation).
Low maintenance costs
Real estate owners don’t have to spend money on routine maintenance costs like lawn care or pest control like homeowners do. Unlike rental properties, which require regular maintenance and repairs, land doesn’t require any upkeep once it’s purchased — except for taxes and insurance premiums on the property itself. This makes owning land more passive than other types of investments such as stocks or mutual funds because there are fewer things for you to do day-to-day to make money from your investment portfolio.
Low correlation to stocks and bonds
Land is generally not correlated with other investments, so it can be useful as an asset class in your portfolio. Its low correlation to stocks and bonds makes it a good diversifier.
As an investor, you know exactly how much income you’ll earn from renting out real estate properties. You don’t have to worry about the stock market crashing or interest rates rising — it’s more stable than other types of investments.
An asset that appreciates over time
Land is an asset that can appreciate over time. If you buy property at the right price and location, you could see significant increases in value over time. For example, if you buy a piece of land for $50,000 today and sell it for $150,000 five years from now, your return would be roughly double what you originally invested.
Also Read – Why Land Is The Best Investment Choice For NRIs In Real Estate
Cons of investing in land
One of the biggest drawbacks of investing in plots in Lucknow is that it can be very risky. For example, if you buy a parcel of land and there’s a problem with the title or someone else claims ownership rights, you could lose your investment.
It may take years to sell:
Selling land can take a long time because buyers usually want to see the property before they buy. If you’re not willing to wait for months or even years before selling your property, this may not be the best investment for you.
There aren’t many buyers:
There aren’t many buyers for raw properties; most people want houses or condos rather than raw tracts of land. This means that it might be difficult for you to find someone who wants your property quickly and at a good price.