Five important rules of land investment
Land price “fevers” help many investors make a lot of money. However, many people still wonder whether they should invest in land at this time or not? According to experts, investing in land is quite safe, but in order to get profit, you should be alert and follow the basic rules.
Investors should follow the basic rules when investing in land segment:
The first thing to consider is the real liquidity, which means real demand for transaction. In case that the price becomes higher and higher but there is only a few transactions on market, it is a virtual fever. In addition, you should choose land plots located in existing residential areas with quite high population, not secluded places.
Secondly, the land you choose must have a Certificate of Ownership, or “red book”. The most common risk for individual investors is to buy land without completed legal documents.
Thirdly, you should not use too high financial leverage. Especially when the market is too hot, do not invest an amount exceeding your budget.
Fourthly, invest in a team. When teammates join, risk will be reduced.
Finally, get profit when you buy land, not when you sell it. This means you have to buy land at or below the market price.
Mr Ngo Quang Phuc, Deputy Director of Him Lam Land said that the most important issue in land investment is legality. You should take the time to make sure the land you intend to buy is not in planning and have a red book.
Secondly, you need to consider location and potential development of the land site.
Thirdly, if you buy a plot of land in a well-planned urban area, pay attention to the developer’s capacity.