Land Investment or Housing Investment?

In the world of investment, real estate investment is examined in two main categories: housing investments and land investments. Both types of investment offer different advantages and risks; but land investment has an increasingly strong appeal in today's dynamics. In this article we look at the main differences between the two types of investment and highlight the advantages that land investment provides.

What Is Land Investment?

Land investment is investment in the land itself, and it is the type of investment with the highest appreciation expectations. A road passes in front of your land, its value rises. Electricity and water lines come closer, its value rises. Infrastructure investments are made in the region, consolidation or zoning work comes onto the agenda, and its value rises again. In short, every nail driven into the region where your land lies is reflected in your land's value. What is more, there are no maintenance costs, tenant problems and depreciation costs as there are with housing: you buy the land and wait. We explained the reasoning behind this approach in detail in our why invest in land article.

How Can I Make My Own Land More Valuable?

Small touches you make to your land increase its value even further. For example, surrounding your land with a wire fence or a stone wall reveals the shape of the parcel, gives it a tidier appearance and provides security for what you build or store on it. Another example: you can level out a slope or hollow in a certain part of your land by bringing in soil from outside. Reasonable spending of this kind on the land comes back to you many times over at the sale stage.

Zoned Land or Agricultural Land?

The expectation from an investment is to get the most profitable return in the most suitable timeframe. Zoned land is more expensive than agricultural land and its appreciation happens more slowly, because most of the expectations (road, electricity, water, zoning) are already reflected in the price. Agricultural land, on the other hand, is far more affordable because it has not yet been zoned, and there is more expectation to be bought: every service that comes in the future means appreciation. For this reason, when profitability is concerned, we recommend agricultural land.

Which Are the Most Profitable Agricultural Lands?

According to your budget, you should look for the following qualities in your field: it should be close to a village, offer partial building rights if possible, and have frontage on an official road or be in a second-parcel position to a road. There are serious price differences between parcels with and without an official road; if the aim is the most profitable investment with the lowest budget, a second parcel to a road can be a balanced choice. The fact that electricity and water have not yet reached the front of the parcel is an advantage in that it leaves expectation to be bought.

What Is Housing Investment?

Housing investment is the type of investment usually made in ready-built structures, carrying the expectation of rental income and appreciation. But here many problems can be encountered: tenant problems, depreciation and maintenance costs, tax obligations, insurance expenses and so on. The length of tenant-landlord disputes can deepen the problems; even selling a home with a tenant in it is in itself a matter of value debate. The prominent advantage of housing investment is that it provides regular returns in the short term through rent; but when the total cost of ownership and the burden of effort are taken into account, land investment stands out for those looking for a long-term, trouble-free means of saving.