7 'Golden' Rules for Safe and High-Profit Land Investment

During the unpredictable land speculation frenzy of 2017, buyers should equip themselves with basic knowledge to avoid risks when conducting transactions.

Here are some principles to keep in mind when investing in land plots for safety and high returns.

The firstBuy land in a location with moderately to fairly convenient transportation connections. As infrastructure gradually improves, the opportunity for price appreciation will increase. This is how to target the potential for price increase of the land.

MondayBuy in areas that have already formed residential clusters with moderate to high population density. Absolutely avoid "desolate" areas, even if the price is extremely low. Investors need to be wary of cheap price traps when buying land. Ask yourself why the price is so low, whether you should buy just because it's cheap, and what are the chances of the price increasing for such cheap land...

Investing in land plots is considered a channel that yields high returns, but it also carries significant risks.

TuesdayOnly buy land with complete legal documentation. Land that already has a land title, is not affected by zoning plans, and has a building permit is a safe investment. The biggest risk for investors is buying land with incomplete legal documentation. Two worst-case scenarios can occur in this situation: either it will take a long time to complete the legal procedures; or it will be impossible to obtain a land title (certificate) due to conflicting regulations and standards.

WednesdayIt's essential to conduct a land valuation before purchasing. Investors should seek advice from real estate experts and appraisers to determine if the price of the land they intend to buy is reasonable. A common valuation method is to compare the prices of neighboring plots of land in the most recent period. Only buy when the land price is equal to or lower than the market price. This is the principle of making a profit when buying, not waiting until you sell.

ThursdayConsider the actual liquidity of the land. Investors should conduct a preliminary survey of land transactions in the area they choose to buy. It's necessary to understand whether there is genuine buying and selling demand in that area. Only buy if the asset has good liquidity (can be sold quickly when needed), avoiding the scenario of having capital tied up indefinitely.

FridayDon't invest more than you have. Avoid using financial leverage; ideally, only use your spare cash. If you need more, only borrow within a safe limit (50% of the asset value or less). Before borrowing, consider the variable interest rate and how long you can withstand paying interest to anticipate potential pressures. Buying land during a market crisis, when prices plummet, is a golden opportunity. The hotter the market, the more cautious you need to be.

SaturdayInvesting in land as a team is advisable. Risk is reduced when multiple partners are involved. The land market is complex and full of pitfalls for inexperienced investors. Investing as a team has the advantage that the partners' knowledge of land will be combined effectively. Going alone only gets you a short distance; going together allows you to go far.

According to VNE