Tuesday, October 6, 2009

Real Estate Lands Spell Risk And Profits

By Jaso Myers

Many experts in real estate markets are against venturing on raw lands. Supporting their logic they point out that this type of investment will not yield a steady cash flow on short term basis but require years before making a profit if there is any to come.

The risks of investing in real estate lands mainly lies if the investors are confined with ownerships for a long time without undertaking developmental schemes in them. This may not curtail taxes on the bare lands and will burden the owners till they make necessary amendments to construct bankable projects.

Moreover, these lands are subjected to regional policies and to convert them lucrative many preliminary steps have to be consulted with the concerned offices. The local governments have the last nod on how to use the bare lands and it may consume some more time to clear environmental issues as well. These are the major issues that propel some gurus to shy away from embarking in raw lands.

Nevertheless, people are eager to own lands. Past proofs suggest that acquiring bare land was one of the main activities of people in the past. But today investors have other considerations to gamble with, real estate land bargains, which are primarily not gained by luck.

Demographic analyses are one such major source that provides the real value of acquiring raw lands. Certain locations are due to develop because of the growth in the surrounding areas. Population growth rate, road networks between major cities, isolated factories, and many other demographical and geographical reasons enhances the appraisal of real estate lands manifolds.

Though this kind of investment is involved with some risks, many investors are banking on acquiring them. Nevertheless, they always rely on demographical analyses before making a move to acquire them and they lose only marginally in the long term.

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