Some say that land is the largest investment a person can make. Every year, more people save or apply for a loan to buy land. Some people buy it because they don’t have a roof over their head, while others buy land as an investment for the future. Although buying land is very lucrative, there are some pros and cons to buying real estate as an investment, and here are some of them.

Buying land is advantageous because it is one of the few assets that experiences such an exponential increase in value over the years. The land is almost immortal and is therefore one of the few goods that is passed down from generation to generation. In fact, unless there is a great natural calamity, the owner of the land will always have remuneration, even if his land is destroyed. Along with gold, land becomes the most expensive, valuable and longest-lived asset possible.

Another advantage of buying land as an investment is the exponential increase in the price of land. Every year, real estate prices see a price correction that drastically changes prices per square foot. This amount is arguably more than any amount of interest a bank would provide, or the returns from any small-scale business you’ve invested in.

Buying real estate as an investment is also the safest, because this is a resource that will always be in demand and will never go out of style. In fact, some financial experts consider real estate to be a very valuable asset compared to gold, due to the ease of use that can be found for real estate. Whatever the financial condition of the country or the person, they will always need land to live and do business.

Similarly, owning real estate also has some downsides. The first disadvantage is that even though the price goes up quite nicely, you will always make a loss when you sell your real estate, because you could have earned a better amount next year, or even six months later.

Another downside is that the cost of real estate owned by a person can suddenly drop due to factors over which they have no control. For example, sometimes the cost may decrease because the land is landlocked and no one can access it by road, air, or sea. In other cases, land may become cheaper because the government has not provided the right kind of amenities and services, reducing the livability of the place.

Yet another disadvantage is the cost of real estate. The cost is so high that people have few assets left to experiment with, forcing them to put all their eggs in one basket.

Because of these disadvantages, it becomes necessary for a person to thoroughly research the area before finally signing up on the dotted line.