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Land Investment Explained
Land investment is one of the investments in the property sector and this property investment continues to show good performance over the past few years due to the very high demand for housing in Indonesia. Land prices continue to increase every year and this is what makes it a profit opportunity for all of us who want to invest in property, especially land investment. The increasing demand is one of the factors that causes land prices to become higher and higher so that they rarely decrease. Plus, if the location of the land you own is in a crowded area and is easily accessible by various kinds of transportation, it is likely to continue to soar.How to Invest in Land
There are ways that you must pay attention to and do if you want to invest in land. You should not be careless in making land investments because there are several things you need to know to avoid losses. To maximize the profits obtained later, you can follow the land investment method below.
Strategic Location
The first step you have to take is to find a strategic location for the plot. In addition, the environment that is already alive will later have more value when compared to a land that is still empty. The crowded situation in an environment can be a promising thing for investment. The price owned by land with this location will also increase later. Try to buy land on the side of a major road such as a highway. The reason is, this area will be targeted by many people because access to all public places will be easier. In addition, land and land whose value continues to rise are near business and industrial centers. Land prices also continue to rise in locations that are in densely populated settlements or near residential areas that have already developed. For example, for example, the Lynn Park plot located in the heart of the city of Bandung. Not only is it strategically located in the city center, the Lynn Park plot has an affordable price compared to other land plots. The land plot area offered starts from 112 square meters to 282 square meters. With its strategic location plus complete facilities, of course, this choice of plot will have the potential to provide great returns for buyers.Find Land Price Comparison Information
After finding a location that interests you, you should not rush to buy immediately. You can find information in advance about the comparison of land prices in the place you want to choose with other places. This is necessary so that you can get an idea of the price of land in the area, so that you can buy it at the best price.Checking Existing Letters and Documents
The next way to make a land investment is to conduct an inspection of the land certificate. If it is still in the form of Building Rights (HGB), you can ask the developer about who must bear the cost of upgrading the right to a Certificate of Property Rights (SHM). This needs to be done so that you don't have to worry about unexpected expenses in the future anymore. You also have to make sure that the legality papers are complete before you decide to buy them. You can validate notaries and officials so that the land purchased will not cause problems in the future. This also aims to minimize losses due to the purchase of disputed land, waqf land, and land affected by eviction because it is located in a location that will be used for development by the government.Know the Condition of the Soil According to the Location
In addition to the above, the condition of the soil at the location also requires attention. This is quite affecting how much profit is obtained in the future. You can see how the condition of the soil is through the contours of the soil, including the shape of the soil, the flatness and density of the soil, the size of the soil, and the face of the soil. For the shape of the land, for example, buyers usually choose standard shapes such as square and also trapezoidal. As for land density, buyers prefer land and land that is flat and dense so that it is easier and more economical when construction is carried out on it. In addition, you have to consider things such as whether the location is safe from landslides or floods. In addition, you can also see the contour of the soil according to the needs that will be used.Must Be Skillful in Negotiation
This part is the most important thing in exploring the benefits of your land investment. In order for the land you buy to be in accordance with the money and prices on the market, you must be good at negotiating. If you play the role of a land seller, then you need to highlight the various advantages that the land you are selling has. These advantages can be in terms of location, environmental comfort, or other reasons for you to sell which of course can make your prospective buyers interested in buying the land. However, if you play the role of a buyer, then you can bargain the price of the land you are going to buy so that the price can be more skewed or cheaper than the original price that has been set by the seller. For example, by reviewing some of the weaknesses that arise such as location, soil type, or other shortcomings. Of course, you have actually accepted this shortcoming. However, for the sake of a cheaper price, you can do it this way.Advantages of Land Investment
There are several advantages that can be obtained by prospective investors who want to invest in land. One of them is that its price is relatively increasing every year. However, there are many factors that affect the rate of price increase whether it is high or low, one of which is location. Land in developing areas will certainly be easier to experience a significant increase in price, and vice versa. However, in addition to land prices that increase every year, there are still several other advantages. Among them are:Land Prices Tend to Increase
Land price increases tend to occur every year. Apart from the inflation factor, this is also influenced by the increasing scarcity of vacant land. However, with the population continuing to grow and development that continues to run, this makes the need for land or land continue to increase. The percentage increase in land prices depends on the location of the land. Generally, the increase reaches 20-25%. If the land is in a developing area that has good access and infrastructure, it could increase by 100% to 200% within a few years. However, if the land is in an area that is less accessible and difficult to reach, it is usually difficult to reach a figure that matches the other land markets. Before starting a land investment, you should first conduct a survey of the land. Look for a location with a strategic and prospective location in the future that is good to become an area that can develop. So that you can get enough profit in the next 5-10 years.Has Added Value
When you have a large amount of land, then you can take advantage of it by making a housing in the form of a cluster or plot. You can build everything such as shophouses, apartments, rented houses, or others. It can also be the land you own to sell later when the value has increased. Especially if the location of the land you own has a strategic place that is close to other public places.Cheap Maintenance Costs
Basically, bare land does not require any costs for its maintenance. In contrast to property investments such as houses and apartments that require a special budget for maintenance. Actually, the cost is still there but not as much as other properties. Maybe it only requires security costs to anticipate that the land you own will not be taken or recognized by others.Allocate to Other Businesses
If the land you own is close to the location of an office, school, or station, you can use the land as a parking lot. Not only that, you can also use the land to grow crops or also rent a place to sell while waiting for a five-year period when the price of the land is considered sufficient and suitable for sale.Small Risk of Loss
Property investments such as houses, shophouses, and apartments can face a large risk of damage and can result in a drastic decrease in investment value. In addition, gold investment is also prone to the loss of gold by being taken by others. However, land investment has quite a small chance of loss risk compared to other types of investments. As long as you have a complete letter and certificate stating proof of ownership, it can be supporting data if the land remains yours.Tips for Land Investment Transactions to Run Smoothly
When you want to buy land, you can consider carefully about the location, cost, and details of the land certificate. Don't rush when buying before doing an in-depth check so that later there will be no regrets in the future. Furthermore, in order for land buying and selling transactions to run well, you can pay attention to the following things:- You can ensure the authenticity of the proof of ownership. A practical way to check the authenticity of proof of ownership is to check it online through an application such as Touch My Land. As for the offline ones, you can check them through the applicable letters and documents regarding the land.
- Check the ownership status. The status of land ownership is regulated in Land Law No. 5 of 1960 concerning Agrarian Principles. There are several types of land rights regulated in the Law, including: Property Rights, Business Rights, Building Rights, and Use Rights. Knowing the status of land ownership will help you determine the value of the land or property itself.
- Check the details of the soil. According to the Decree of the State Minister of Public Housing Number 09/KPTS/M/1995 of 1995 concerning Guidelines for the Binding Sale and Purchase of Houses, it is regulated that the object of the binding sale and purchase must be clearly described in a binding agreement consisting of the area of the building, the area of the land, the location of the land, and the price of the house and land. So make sure all these components do not harm both parties. It is important that you check in detail about the size, boundaries, shape, and area of the land listed in the certificate according to the conditions in the field.
- Seriously Marked Finished. Stamp money is different from face money. The down payment is usually 10-30 percent of the selling price. The amount of the deposit is smaller, the value is below IDR 10 million and will usually deduct the amount of the down payment if the purchase and sale go smoothly. The purpose of the dowry is to show the seriousness of the buyer when buying and selling land. The amount should also not be too large because usually this sign money cannot be returned if the contract is canceled.
- Preparation of Sale and Purchase Deed. The sale and purchase deed (AJB) is proof of land purchase and sale transactions. This process must be carried out in the presence of a notary or an official who makes a land deed in order to have legal force. There are documents and obligations that must be prepared by the seller and buyer as a requirement. For sellers such as, original land certificates, Building Permits (IMB), ID cards and letters of approval of husband/wife if married, death certificates if any, proof of payment of PBB for the last 10 years, KK, land statement letter not in dispute, obligation to pay income tax of the Selling Value of Tax Objects / selling price x 5%. Meanwhile, for buyers, it is needed such as KTP, KK, the obligation to pay BPHTB in the amount of NJOP/ (purchase price - non-taxable value) x 5%.
- Payment method. Choose the payment method that best suits your financial condition. If possible, you can pay in cash at the notary's office immediately after the signing of the AJB. However, if carrying a large amount of cash is troublesome, you can pay by transferring it to the seller's account as per the mutual agreement. In addition, you can also choose to use the Land Ownership Credit (KPT) offered by the bank.
