When thinking about where to invest your money, one of the questions you will likely be faced with will be whether to invest in land or in stocks. The decision may seem challenging at first but in the long run you will quickly realize that it is a no-brainer. Using land as your investment vehicle is far better than using the stock market. Here are some of the main reasons why this is so.
Land is More Tangible
Land is considered a better known investment vehicle and as such people are much more comfortable with it since they can actually see and touch it. They know that it is theirs and theirs alone, and this, for many people is a very important psychological feeling
On the other hand with stocks you are more likely to be apprehensive and often you never really get to see a stock certificate yourself, since stocks are usually bought and sold via stock brokers who normally hold the documents.
Lesser Chance of Fraud
When you purchase land the likelihood of being ripped off or defrauded is highly unlikely. This is so because you can visit the property to verify its existence. Also you can do a check at the government land office to check the ownership and existence of the land in question.
It is easier to get ripped off when you invest in stock since you do not hold an actual stock certificate yourself most of the time. Also there are some unscrupulous brokers out there who may steal your money. It is more difficult to check on the authenticity of a stock and whether or not you hold that stock.
Over the years, the demand for land has seen an exponential rise as population increases and as more and more people possess greater discretionary income.
The demand for stocks tends to remain relatively the same over time as people enter and exit the market.
Increase in Value
The value of land has over the years increased in value and rarely do you see a dramatic fall in said value. Land such as agricultural lands generally are in great demand and this forces up their value.
Although stock can appreciate in value quicker than land over the short term, this appreciation is not guaranteed to happen. Most stocks tend not to show any significant appreciation over time and only a few will even show a small improvement in value. Stocks normally tend to fluctuate in value over time and when there is a massive sell off or a financial crisis they may even lose their value to the point of being worthless.
Hedge Against Inflation
As a hedge against the rate of inflation land has been a very good bet. To address this problem you can opt to rent out your land for certain uses. If there is a building on the land you can possibly get a higher rent.
Stocks are never a good hedge against inflation mainly because they fluctuate dramatically from day to day.
The main problem with owning land as an investment is that you may have to pay taxes on it. Also, if it is unoccupied there is likely to be maintenance, insurance, and other costs that you will have to pay each month.