• ABC of Investing in Land
A. First of all, the person must find a plot that is fairly close to
future market drivers. Depending on which city one has chosen,
it is possible to identify the future location of scheduled infrastructure projects,
roads, educational institutions, hotels/resorts, townships/residential/business complexes,
SEZs, etc.
B. The investor must enquire into the legal status of the land and establish if it is
for sale, then locate the owners and make a purchase proposal.
C. For maximum future returns investing when entry costs are low is advisable.
D. Profitability depends entirely on one’s choice of location, the entry level(cost of property)
and one’s holding capacity.
E. The land should not be under litigation or earmarked for a government
projects, categorized as forest land etc.
F. In a growth sector with new market drivers coming in, a plot of sufficient dimensions
makes a lot of sense since it has equal potential for developers from the residential,
retail, office and hospitality sectors. As an area attains more and more market drivers
and begins to saturate, the value of plot increases manifold can be sold in a seller’s; not
a buyer’s market.
G. Every metro and tier-II city has its growth corridors.
In terms of residential land, one should consider areas beyond the currently
favoured housing zones (such as the suburbs) that are scheduled for residential
development in the future.
H. The documents to be checked are the title deed (a legal document proving a person’s
right to property), the encumbrance certificate (in case the land is not under any sort
of legal dispute), the release certificate (in case the land was previously pledged to some one
else). The surveyor’s report (to establish its exact dimensions) and, if the owner is an NRI,
the power of attorney that gives his representative the legal right to act on his behalf.