Buying a piece of land is not an easy process. It requires thorough research, analysis and huge investment.
One of the main reasons why people purchase stocks, gold, land, property, or flats is to secure their future and earn profits.
But not every investment is fruitful.
Some assets can depreciate because they have a finite life span, such as automobiles, electronics or machinery.
These assets contribute to the growth and development for just some time. They do not reach the actual value which they should by the end of the period.
On the other hand, financial investments and real estate properties are assets that experience appreciation due to their infinite life span.
What is Land appreciation?
The word appreciation denotes the increase in the value of any asset over time. Over a period, the cost of an asset is higher than its initial purchase rate.
It is also the value that is above the assets depreciable price. But often people get confused between appreciation and gain.
Appreciation is the increase in the value of the asset that is known but not converted into money.
Gain is the profit achieved when one sells their asset at the appreciated price. Some of the common reasons why land appreciation happens are:
a sudden increase in the demand, changes in the interest rates, a sudden reduction in the
supply of the asset, and inflation.
Everyone is aware that land is a limited resource and, with the growing population and increasing civilization, the scarcity of land has escalated.
Analyzing the appreciation:
One must calculate the value of their assets from time to time. Some of the methods to analyze the appreciation are as follows:
If you have an idea about the average appreciation rate, then you can estimate the value by using this rate.
If you know the past and present values of an asset, then you can calculate the average appreciation.
Here are some points to consider while purchasing a land:
Location: Many customers give the least priority to the locality of their land.
Always purchase land in a location that’s surrounded by lush green plants, near to emergency services like hospitals, airport, bus or railway station and in proximity to highways to attain high appreciation value in the future.
Economy: With the boom in the economy, more companies are looking forward to starting new ventures in our country.
Thus, it is wise to purchase lands that can be leased out to companies and startups to set up their offices and factories.
Builders: Another vital aspect is to maintain good relationships with the builders, brokers, real estate agents and architects.
These people are well-connected to the market and hence can help you to analyze your land’s appreciation value from time-to-time.
These people can also help you to connect to potential buyers who will pay you a great price.
Facilities: Also make sure that your land has ample groundwater supply, ventilation, proper dimensions and is capable enough to hold the septic system.
ABW properties is one of the top real estate websites that help the customers to find the best property and meet potential buyers who are interested in purchasing properties.