Buying raw lands came up as hot topic in Singapore news as a group of investors have trouble with their investments with raw lands and other investment products.
When I was at the Asian Investment Fair last weekend, which was held at Suntec City, I also have an adviser sharing with me about the benefits of investing in raw land. The raw land project that was shared with me was situated in one of the state in US, quite far away from Singapore.
Through the discussion with the adviser and based on my limited knowledge of investing in raw land, I find that it can be very risky, although given the natural risk-return matrix, the absolute return can be as high as 25% compounded.
Some of the risks I noted is the following:
1) Change in zoning law
2) Litigation Issues
3) Population Trend/Potential Demand
4) The direction of development from the developed city.
5) Laws of ownership and form of ownership
Like all investments, there are a lot of things that investors should study when investing in real estate, especially raw land. I personally feel it is better to be down personally to do some scouting and research, before one commits to such investments. Now although the costs can be high, at least it buys some assurance and build your confident in the investment.
As like all investments, I urge investors to do as much research as possible before they commit their hard earn money. Investors have to note for every large return, there will be huge risk behind. Study hard and ensure that you have reduce that huge risk to the minimum before you commit.
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The Merger Dividend - July/August 2011
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