Investments Explained: How to keep your feet on the ground when investing in land

"Buy land, they're not making it anymore", Mark Twain once famously said.

He was right, but investing in land is a field of potential risks. TheMoveChannel.com gives some tips on how to navigate your way through.

A large portion of land investments involve plots of land that are ripe for property development. These building plots are often located in an area where new development is required, perhaps due to growing populations or other reasons, but do not yet have planning permission. Land with planning permission is worth significantly more, which means that buyers can then sell on the plot to developers at a large profit – and with a finite supply around the world, the odds on planning permission being obtained are arguably fair.

But it is not always that straight-forward. Land with planning permission is already likely to be owned by developers, which lowers the chances of being able to sell on the land. Sometimes, the land is not even likely to obtain such permission: it is just a piece of field that has been divided up by a land agent to sell on to investors at a marked-up value.

With a lack of regulation from the Financial Services Authority, land investments are hard to police, meaning that buyers have to be especially cautious – as always in investments – of potential scams.

That's not to say a patch in a field is necessarily a bad thing to own: farmland , for example, has a raft of possibilities, from hiring or selling it onto a farmer to developing your own farm on the agricultural property.

Vineyards for sale are an equally worthwhile investment, with returns able to be generated through use of the land and its produce.

Land investments, then, depend on the type of land as to how reliable they can be. The FSA can only regular "collective investment schemes," when sellers also offer to manage the land and secure planning permission. Outside of collective investment, by notifying the FSA of any land deals carried out, buyers can help the authority can monitor activity and warn investors of anything dubious.

Combined with your own caution and research, land investment can still be a valuable investment – you just need to keep your feet on the ground.

For more information on property investment, visit http://investment.themovechannel.com

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