Land or Property: Which Is The Best Real Estate Investment?
Real estate investments come in all shapes and sizes. The first thing you tend to think of is property – like houses, apartments, and so on. Interestingly, land is also considered real estate. Here, you have two investment ideas that are similar, yet very different at the same time. Investing in a house or other physical property can yield different benefits and disadvantages to investing inland.
This starts the debate: Which is the better real estate investment?
Should you focus on buying properties, or look to invest in land instead? Comparing the two options and looking at their pros and cons is the best way to understand which one comes out on top.
Property Investments: Pros
Starting with traditional property investments, what are the main advantages
- More accessible – It’s a lot easier to invest in houses and buildings because there’s more of it around. You are also more likely to find schemes and grants that help you buy a house, rather than ones aimed at helping people buy a plot of land. For the average person, it’s a more accessible investment.
- More variety – Likewise, there’s more variety to your property investments. You can buy houses, apartments, condos, offices, warehouses, retail units, restaurants; the list is endless. With land, you don’t have much variety to choose from; it’s more a case of just finding the plot of land that works for your needs.
- Quick gains can be made – A huge advantage of property investments is that they let you make some very fast gains through property flipping. In the space of a few months, you can buy a property, upgrade it, then sell it for an overall profit. You can’t really do this with land at all; money comes in more of a long-term format.
- Multiple ways to make money – As well as property flipping, you can make money from your investment by renting it to other people. Residential properties can be rented to families or converted into multiple apartments to rent to numerous people at the same time. Commercial properties can be rented to businesses, but the bottom line is that you can make money through monthly rental income.
Land investments: Pros
Moving onto land investments, what are the key benefits of this type of real estate investment:
- Can be cheaper – Sometimes, land investments can be more affordable than property ones, even when the property buying schemes are taken into consideration. Buying land might be cheaper than buying a house, and it can also be cheaper to then build a house on the land. This is because you have control over how the house is built, managing all the costs.
- Larger gains can be made – While property investments offer quicker gains, you can potentially make more money from a land investment. Many investors will buy land and then charge property developers to build on it. You could have a large patch of land where numerous houses are built, meaning you make a fortune from it. Or, you could build the houses yourself and own them all, meaning you can rent them all out and make even more money.
- Many ways to make money – Like property investments, land investments give you a plethora of ways to make money. You could build a new construction dream-home on the land, creating something that’s worth a fortune and sells for big bucks. As mentioned above, you can make money by selling some of your land to developers or building on it and renting the new properties to other people. You can even make money by installing things like solar farms or wind turbines on your land. Energy companies often pay a lot of money to put their things on your land, so it’s another avenue to make money. If you wanted, you could also start a farm and make money that way; there are so many possibilities.
Land vs. Property: The Final Showdown
So, which option is better? It’s very hard to separate them as they both have a lot of advantages. Mostly, the disadvantages of one are the advantages of another. It is harder to find land investments than it is to find a property, but they are generally more affordable. Ultimately, you have to look at both real estate investment options in terms of what you gain from them. In both cases…you can gain an awful lot.
Therefore, it’s impossible to say that one idea is better than the other. It’s more a case of picking whatever is available to you. If there’s some land selling in a great location for a great price, it is worth looking into. Likewise, if there are properties that look perfect for flipping, you can’t pass them up!