Why to invest on land in Nepal?
One of the main reasons people invest on land in Nepal is, ROI or to build a residential or commercial property. Land, like any other resource, is scarce- finite, hence this makes it rare and valuable. Investing in land is one of the most stable and no-fuss investments among all as land is a high- appreciation asset. Like well said by Mark Twain, “Buy land – they’re not making it anymore.” Its value increases over time. Especially in areas experiencing urban development or infrastructure growth. This appeals to many when you consider selling where you may even benefit through price escalation or outbidding.
Investing is not about financial returns alone but owning a tangible asset as well. Land investment provides security unlike other paper or digital investments due to its tangible presence. Once cannot erase, diminish, or lose. Its tangibility is a reassuring factor for many investors.
Initially, the creation of money represented the value of true resources. It reduced the burden of carrying physically unfeasible assets. Money features flexibility and portability in transactions. In today’s economy, as money supply grows continuously, owning tangible assets like land is increasingly seen as a logical and beneficial choice.
Land as an investment
Land being a low-risk investment makes the return likely too; low. Unlike any other high-risk investments where return expectations may be uncertain, land appreciation does take time. However, land investment aimed for long-sighted ROI provides a balance to your investment portfolio against the volatility of financial instruments. Land often acts as a hedge against inflation. As the cost of living rises, so does the value of land, protecting your investment’s purchasing power. Investment in land is a stable investment. It’s a tangible and an enduring asset making you peaceful and financially secure.
Land also has the merit of low maintenance. Unlike buildings, land doesn’t require regular upkeep. There are no repairs, renovations, or significant ongoing costs, making it a low-maintenance asset. Land does not depreciate like buildings or machinery, which require consistent maintenance. As compared to other investments, its upkeep and retention costs are negligible . Vacant land is highly flexible and can generate passive income through personal projects, commercial purposes, recreational purposes, or leasing or other uses, providing a steady revenue stream. Landowners can use their property as collateral for loans, allowing them to leverage their investment for further opportunities.
Specifically in Nepal
From a long-term investment perspective, to invest on land in Nepal can be highly beneficial due to favorable policies. To analyze such policies, one must seek the contributing factors. Such as, the seller pays a 7% capital gain tax if land is sold within five years of purchase. And, if sold after five years, the tax is 5%. (to note: 1.5% CGT is applicable regardless) source: The Lands Act, 2021(1964). Furthermore, foreign investment is increasing in Nepal, and this could be a great way to benefit as foreigners can only own buildings and structures, not Nepali freehold land. Opportunities are beyond limits for this risk averting investment. Numerous other acts can be considered to analyze and utilize them to our benefit; The Lands Act.
Overcoming the challenges
While land offers great potential, it’s worth noting that land owning can come with challenges. To invest on land in Nepal, policies such as zoning laws and infrastructure requirements should be carefully considered. The fulfillment of such factors can highly impact on the return of land; location, zoning, title deed, utilities, amenities and infrastructure development, environmental considerations, soil quality, and more.
The real estate market in Nepal lacks transparency, making market analysis difficult. Land being an illiquid asset, it’s difficult to sell quickly, real estate transactions are more complex than buying or selling publicly traded stocks. They involve finding buyers or sellers, negotiating deals, and completing legal formalities. It requires time and fulfillment of numerous factors to convert to cash quickly. Solely trusting your valuable money on friends, family, or third-party agents does not provide you with high confidence; consulting with a specialized real estate company can be the smartest choice. Have we not heard enough fraud stories already? For wiser decisions i.e., wiser investing, we should consult land developers that is reflected by a saying “An investment in knowledge pays the best interest.” – Benjamin Franklin
Consulting professional real estate experts provides valuable insights into the market trends, legal necessities, and potential pitfalls. This expertise can help the investors navigate better. Similarly, for residential purposes engaging with land developers can help you find a safe space with facilities and amenities designed for comfort like SK VENTURES P. Ltd Nepal. For those interested, learning How to Buy and Sell Land in Nepal can lead you towards making informed decisions and securing financial growth.
