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Although not a short term solution, land property investment should be looked at like any other aspect of real estate investment. In my opinion, it is best saved as an investment tool until your portfolio is cash rich and you are looking to reinvest your profits.
In the UK, which ever government is in power is always calling for more residential building starts, but the land available is not in the "right place" for the new buyers in the market. The inner city areas, or Brownfield sites, are not where the middle classes are looking to buy their first home or to move up their own property ladder to house number two or three. These areas may be suitable for what is known as affordable housing designated for key workers, but they too will want to move on and up away from the area in the future.
Most people are looking for a leafy suburb in which to invest which usually means the outer reaches of the major cities. The problem here is that this type of land is usually designated Greenfield, meaning no new development is allowed. The Government is therefore continually being questioned by developers to release parcels of land in these areas which is then challenged by the environmentalists and local pressure groups.
So what is the solution and in reality is there one? The developers will keep pushing for green belt land to be released to meet the government's new housing requirements. The problem here is that no-one thinks or considers the impact of these new properties on the current infrastructure. When a developer builds, say, a 200 house estate, is he responsible for ensuring the additional water is available? Is he responsible for ensuring the existing sewage system can cope with the additional load? Of course not and then once he has departed with his profits, the local authority is left with trying to plug these gaps in the infrastructure as the problems arise.
Councils have released land near waterways in the past 20 or so years to get more housing and vast estates have been built there. Now, with increasing rainfall and rising river levels, these dwellings are being flooded out nearly every year. Here who picks up the tab for the increasing insurance costs, not the developer, but every person in the country who has insurance on their property will pick up a small part of these costs by increased premiums.
But land is still, and always will be, an important and valuable asset for the professional real estate investor. To look for the best opportunities in the UK, for southern land investments real estate opportunities will always be possible as this is the part of the country where the majority of people want to live and work.
Remember though the best way forward is always to use other people's money (OPM). Using this for capital property investors can continue to build their portfolio, but without the need to invest any, or at least not much, of their own money. And also remember that, at the end of the day, a balanced financial portfolio consisting of, say, a land company investments real estate and other multiple streams of income will ensure that you can ride the highs and lows of the current and future financial markets.
Dave P Thomas.
About this Author
Dave P Thomas built a million pound property portfolio in a few short months! Go to http://www.ResidentialPropertyInvestment.net and download a free video that explains step by step how anybody can do this and have their own residential property investment portfolio.
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