You may not surprise hearing that invest in land in Bangladesh is undoubtedly most profitable investment. But you need much money to invest in land. Hence, most of the people can’t invest in land due to shortage of money.
Why do you invest in land?
In Bangladesh, value of land property is increasing since after the war of independent. Each year, land value increases more than 22% in average (Information Source). Let’s draw an example: nearly 20 years ago, my father and uncle bought a land by spending approximately 3 lakh tk.
But at present, this land value is about 15 to 20 lakh tk. Average percentage has increased this land is 4333% to 5667%. Average annual increased percentage is 217% (4333/20) to 284% (5667/20). Without any risk, more than 200% return on investment (ROI) is possible in land investment.
How much money do you need to invest in land?
At the beginning, I said that you need large amount of lazy money to invest in land. From land investment, you will not get revenue in month or year basis. So, you have to invest lazy money in land.
Let’s say an example: in a core city, you may need to get a piece of land by 50 lakh to 1 crore tk. But in rural areas, you can get a piece of land by 10 lakh to 20 lakh. So, investment amount isn’t fixed in land investment.
How to select a land in Bangladesh?
You can select a land by observing some facilities. In city areas, you should consider road and transport, electricity and gas, educational institutions and safety facilities. If you want to make building in your land in future, you should consider above mentioned facilities.
But in rural areas, you should see the farming facilities of your land. Cultivable land has two opportunities- Crops value and appreciated value. Remember that you have to wait some years to get appreciated value from your land.
Procedures of buying land in Bangladesh
At the outset, you should tell your relatives or local people that you want to buy a land in specific area. Secondly, you should wait for their response. If you hear that someone wants to sell a piece of land, you should go to see that land. Thirdly, you have to find out actual ownership.
If the ownership of the land associates with any problem, you should avoid this land. Otherwise, you may become victim. Your money will go in vein. Finally, pay after negotiation. After that you will pay registration fee. Remember that you must not pay all money before land registration.
How to calculate return on land investment?
Land cost = buying amount+ registration fee+ development cost. Suppose, you have bought a piece of land today by 10 lakh tk. Wait for another 10 years. After 10 years, I imagine that this land value will have 30 lakh taka. Your ROI is 20 lakh tk. Annual return percentage is 20% (20/10)*100 divided by 10 years.
You may say that you can earn 20% return from some other investments, such as stock investment or any small business. But recall that every business has risk. Moreover, you will get extra value if you belong to a land specially in city. Moreover, you can build a house by taking loan as you can use land as guarantor. Moreover, you can get crops in case you buy a cultivable land.Thus, land will bring other types of benefit.
How to develop Land
You should develop your land in order to get more money. Some land- developers buy undeveloped land. Later, they develop land to sell at high price. You can buy a land which has no utilities, roads and transport facilities. Definitely, this land is cheap.
After that, you can talk with other landlords to make roads. By spending some money, you will get utility facilities. You can fill your land by sand or soil in case you have bought a low plain land. Your spending on land development will bring higher return.
How to get buyers for your land?
You can talk with local people about land sale or put a billboard by writing “this land is for sale”. You also can talk with local land developer companies to sell your land. But it is better to hold your land and wait years after years to get maximum return. In Bangladesh, land buyers are out-number than land sellers. So, you may not worry about land selling.
Investing in land is better than investing in house?
Yes. In Bangladesh, invest in land is more preferable to invest in house. A building may damage by earthquake. So, invest in house associates with risk. On the other hand, invest in land doesn’t belong to any risk. Moreover, building value will depreciate by nature. But land value will appreciate.
Why does land value appreciates in Bangladesh?
Bangladesh is a developing country with approximately 17 crores people. Her area is 147570 square meters. As population is continuously increasing, Bangladesh needs more land for accommodation. Moreover, Bangladesh is progressing towards heavy industrialization.
From accommodation to business, Bangladesh needs land. But, Bangladesh has limited land. As land supply in Bangladesh is limited, but land demand is unlimited, land value appreciates year after year. So, no risk to invest in land in Bangladesh.
How identify problematic land?
When you study the past history of the land’s ownership, you will learn about who are the actual owners of this land. Suppose, a father has two sons and one daughter. One brother wants to sell his portion. But they haven’t allocated their portion. You desire to buy land from this brother.
After analysis the past information, you have learnt that this brother has already sold his portion. Now he wants to sell his siblings’ portion secretly. If you buy this land, you will face problem. Other siblings must not give their portion to you. You should avoid such type of land to avoid problem.
Final Talk
You can invest any mentionable amount in land in Bangladesh. Land property is appreciated year after year in Bangladesh,. Investing in land has completely risk free. You have to wait years to get handsome return from land investment. You should choose land carefully. Before buying a land, you should know the past history of the ownership of the land. Never buy ownership problem land.
Founder of The Financial Ask
