BUY Land, they are not making it anymore. That’s the advice given by many property gurus and season investors. They reasoned because land is limited and depleting resource, and with the HUGE population increase in the upcoming decades, more land is going to be needed to built house where people need to live in them. (Thats a mouthful) Basically more people means more houses needed, and that means more land needed.

And I agree with them, in fact i bought some pretty cheap land back 6 years ago when the Crazy Boom years. RM7000 per acres, CL, even its quite remote, still pretty cheap by any standards. But these days i prefer to buy commercial properties, or properties with rental yield. Not only do I get to leverage on Others People Money (OPM) but I also received rental income when the property is rented out.

A lot of investors want to get maximum return for the money they invested but investing in Land is not exactly buying vege at a local market.

1. You usually have to Buy Cash for land because borrowings for land is generally comes with a high interest rates or low margins. And that also depends on bank valuation.
2. Even though you can rent out land, the rental yield of 1 or 2% is considered good. Expect to cover the extra mortgages cost if you are borrowing.
3. If you need to sell the land to raise cash, it going to take WAY longer than your typical Condos or Terrace House. Even you do manage to sell there is no guaranteed the sale will go through since Land transaction involves lots of legal process and uncertainty (if you get my drift)
4. Complex and often confusing land titles and legal process means Buying Land is often time consuming process. This can run up cost and interest especially if you are intending it for development purposes or Land Banking.
5. Land invest carries more risk, if the said land is not going to be developed, and there is no catalyst nearby then the invested amount might be stuck there for a Lonnnnng time.

If you intend to purchase land please consider the holding cost, for most investor who have limited cash, this can eat up your savings. The HUGE return you are hoping for might not Materialized so soon.

Propertykid. Always Learning. Always Investing.