UK land represents some of the best investment land available. These eight facts, presented by a land planning and land investment expert, will tell you what wise investors already know about investing in land
1) Investing in UK Land is a real asset
You can see, use, and most importantly, build on investment land. You hold the legal title deeds to your investment land as surety. There are no complicated concepts in land investment, just a burgeoning demand for a finite amount of UK land.
2) Investing in Land yields strong returns
A finite supply of UK land partially explains its historically rising value, and implies it is unlikely to depreciate. Mark Twain said, ?If something is unable to be manufactured and the underlying demand for it is constant, then its value will tend to rise.? Demand for UK land is, at the very least, constant. The property market increases reflect soaring demand for houses from an ever-growing population. Therefore, investing in UK land offers strong returns. It is reasonable to achieve the equivalent of 30-35% annually in a 5-year land investment project. This equates to compounded returns of around 400-450%. Such returns are hard to realise with other UK investments.
3) Land Investment is an investment in 'the real world?
The value of property assets is clear and transparent. This is not the case with all UK investments, such as derivatives. Even with traditional equity investments, the average investor rarely knows whether the equity is genuinely under-valued (buy signal) or over-priced (sell signal).
Stock market scandals resulting from accounting malpractice highlight the limitations of the average investor's understanding of their exposures. UK land investors are usually already active players as homeowners, so they already have some market experience.
4) UK Land has a lower entry point compared with buy to let
The price tag on a typical UK property is around £200,000. A plot of UK investment land that offers substantially larger relative returns is priced at just around £10,000! Remember that the Iron Law of Investment is diversification, commonly known as ?Don't put all of your eggs in one basket.? Because land investment has a significantly lower entry level than property, wise investors can more easily practice the Iron Law.
A typical UK investment requires around £200,000 but a diversified land investment portfolio could be created for less than £50,000! Investing in land, with its lower entry point, therefore gives the investor more 'chances' to pick a lucrative UK investment. However, it is by no means essential to build a huge portfolio of land investments: the key considerations for anyone considering investing in land are two-fold: choosing good quality UK land, and choosing a good land investment provider. The 12 Land Investment Guidelines, located at http://www.land-investment-uk.com/homepage/index.html will help you make these two choices.
5) Investing in Land capitalises on UK?s housing crisis
Investing in land is the most lucrative means of capitalising the UK?s housing crisis. Supply pressure is being felt in both affluent and less affluent areas up and down the country. The number of UK council homes has fallen sharply over the past 25 years, while homes rented from social landlords has increased dramatically, and owner occupation has doubled.
The combined effects of the above factors make investing in land a sensible choice when allocating assets in a UK investment portfolio.
6) Investing in land is passive and hassle-free
All UK investments demand careful consideration when entering and exiting the investment. However, some UK investments also demand active management during the life of the investment (e.g. equity and commodities trading). Land investment, on the other hand, is entirely passive, which makes it popular with many investors. Investment land is easily managed and investors should be fully apprised of their investment progress.
7) Land Investment has low volatility of returns
Volatility of land investment returns is an important consideration. It refers to the extent to which the value of the investment rises and falls in its lifetime. Less volatility makes it easier for the investor to know their wealth at any given time.
UK Land investing is not volatile and is actually relatively predictable. The value of a land investment tends to follow a linear path: in a 4-5 year project, the value of the land investment in years 0-3 will tend to rise relatively modestly by the effect of 'organic growth?, (what we commonly term 'inflation?). The land investment typically rises sharply in value during years 4-5 (should permission to build on the land be achieved). The land investment may be divested of at this time for maximum profit.
The wise investor knows that they can more easily estimate the future value of their portfolio with land investments than with other asset classes. The land investor can plan for critical future funding requirements such as school and university fees, retirement planning, and healthcare expenses. More concrete future planning may not be so easy if the investor has exposures that are more volatile than investing in land.
8) Investing in land creates real wealth by compounding returns
As we have seen, returns of 400-500% in a 4-5 year project cycle are entirely possible if an investor chooses good UK land and an experienced land investment provider. Therefore, an initial investment of £10,000 could grow to £50,000. If these returns are then reinvested into another land investment project with comparable returns, then the initial land investment could grow from £10,000 to £250,000.
Some of the most successful individuals are enjoying the financial benefits from compounding in land investment. This approach requires a slightly longer-term view, but the rewards are significant. Compounding in land investment can offer more than just good investment returns: it can create very substantial wealth!
Leonard Montgomery is a Land Planning and Land Investment expert based in the UK. He enjoys sharing his expertise with common men and women to help them avoid the pitfalls of land investment and land planning that he experienced first-hand. For more advice about UK Land Planning or investing in land in the UK, click here: http://www.land-investment-uk.com/ For more help navigating the many opportunities and pitfalls in Land Investment UK, including The 12 Land Investment Guidelines please visit http://www.land-investment-uk.com |
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