The Tax Publishers

Investment in Land, Building and Other Assets

1. Importance of investment in land and building

An unproductive asset does not, in general, appreciate but it has been the experience of every one that land and property are such assets which have steadily appreciated in the past two decades, far in excess of the inflation rate. The appreciation has been particularly sharp in big cities. The reason is very simple. The total area of the land available is fixed. The increasing population has been generating greater demand but the extent of land remains the same. Scarcity of land makes its prices jump disproportionately. There may not be a regular yield or income from the land, however, its appreciation makes it attractive for the investors.

The twin factors of scarcity and demand vest land with the attribute of reasonably good appreciation rate. Further, land remains within ones own control. The investor does not run the risk which even a bank deposit may have, in that a chance failure of the bank will be the failure of investor. The company deposits or investment in shares and debentures also carry attendant risks.

If one does not purchase a land today for construction of his own house, he shall have to go farther away from the heart of the city to purchase a land at affordable price and this will create problem for every member of his family. If the aggregated cost of time and conveyance of all the members is taken into account, every wise man will go for a nearer residential site from the place of business even if it comes at a higher cost.

It is always a wise investment to purchase urban land or developed lands on the edges of the city or land in the suburbs which are sure to appreciate tomorrow. If anybody has a little idle money he should definitely invest the same in a piece of land for his family so that he may be in a position to beat the inflation in land prices. Such a procurement may be quite difficult for the person when he intends to build a house ten years hence.

2. Residential house

A residential house in a prestigious locality is not only an investment but is also a status symbol and provides satisfaction. One should plan to have a residential house in an area nearby his place of business or that of his service so that he and his family members may be at a convenience being in a position to avoid the daily waste of time, risk and cost. One should plan his house in an area which is well developed and has the necessary facilities of schools, colleges, hospitals, markets and other amenities. Regular water supply is another factor he should look at while going for investment in a house site.

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