The land is indeed a commodity that is always expected and dreamed of by many people. From here then, many people commercialise the land by buying and selling. Even though it looks like a promising prospect, the land buying and selling business has a big enough risk. From this big risk in the business of buying and selling land, the threat of loss is also getting higher.
The risk in the land buying and selling business, of course, you must be able to minimise properly. But before trying to reduce it, you need to know first what the risks are that can arise in the business of buying and selling land. Now, here are some risks that you need to know in the business of buying and selling land.
Potential to be misused by others.
The first risk of a business buying and selling land is potentially being misused by others. Although the land is an immovable asset and does not require maintenance, uncontrolled land can be misused by people. Empty land can indeed be used for many things. Especially in big cities where the existence of land is something that is rarely found, the potential for abuse will be even greater.
Some examples of land misuse that generally occur are the construction of parking lots, planting plants, being used as a place of sale and can also be used as a landfill and other waste disposal sites. Therefore, those of you who own land, especially in urban areas, really need to supervise it. If necessary, you should create a fence or barrier with the road or other soil so that no one abuses it.
Not a Productive Asset.
The land is indeed an asset whose value will never go down. But if you want to turn this land into a productive asset, you will have a hard time realising it because vacant land is difficult to rent to other people. You can only benefit from this land only when selling it. Unlike when you own a shop or apartment, you can make this asset productive by renting it.
So while waiting for the best seller, you can rent out a shop or apartment early so you can still get a productive month’s money. Now what can be done in a shop or apartment will be difficult to do on vacant land.
Not a short-term investment because it can be a loss if it is sold quickly.
Further, the risk of the business of buying and selling land is that it cannot be used as a short-term investment. Those of you who want to benefit from this land must be patient to wait a few years. This is because, although the price of land tends to always rise, the increase does not occur in a short time. However, this increase in land prices occurred for a long time, namely yearly.
The longer you want to be patient, the higher the price of this land will be. So from here, the land is not a short-term investment instrument that can be profitable if sold in a short time. Some investment experts even say that if the land is used as a short-term investment, there will be losses. So never do land business if all you hope for is short-term profit.
It takes time to get the best out of it.
The risk of doing business buying and selling land takes a long time to get the best profit. Even though you have been patiently waiting for the price to increase in a few years, you may not be able to sell the land immediately. Because, with high prices, finding a buyer with the best offer is not an easy matter. You really have to find the best buyers who offer the most favourable prices.
You also need time and patience to wait for buyers who provide the best offers. Like gold and mutual funds, those of you who are in the business of buying and selling land need to be patient, waiting for the right momentum to sell it.