5 Benefits of Owning Residential Land

Today we’re gonna talk about the 5 Benefits of Owning Residential Land.

In this modern day and age where you see that a lot of condominiums are being built in the city, you might be wondering, what are the actual benefits of actually owning a residential land when you want to think about of going back to the basics. In the old days, almost all of us are used to growing up in a house and it’s very rare that I have heard that somebody grew up in a condominium all their life because relatively in the Philippines quite a relatively in the concept. And as far as we’re concerned there are actually benefits to live in the condo, and also there are benefits to live in the house. And today, we would like to talk you about the benefits of owning your own residential land here in the Philippines.

The first benefit of owning your own residential land is, flexibility.

When you own your own residential land you actually have the opportunity to make bigger rooms, design it, you can have your own office, you can have a nice double ceiling height living area which has a spillover area over to the garden, on the poolside. And you can even have a nice formal dining area which is enclosed for interior design the way you want it. Just simply because you can do it.

Generally, it’s a lot easier to customize these things because when you are customizing something inside the home it’s within the boundaries of your property, so you have more or less the freedom to design the way you want.

Unlike, say for example it is a condominium, you have to adhere to the rules and regulations or the deed of restrictions that are being implemented in the condo for the sake of all of you as the residents. Now, there are also some restrictions when it comes in building homes inside the gated subdivisions. But generally, they’re far less strict compare to condominiums.

The second advantage of owning your own residential lot is, more space.

The typical sizes that you usually find in the market are on the 3-digit number all the way to 4-digit size number so we’re talking about is generally more space when you actually own your own residential land. With this, you can also construct a bungalow, or a 2-storey home or even a 3-storey home if the deed of restrictions will allow it.

Generally, nowadays the condominiums are being sold on sizes of roughly around 55 square meters, 80 square meters, 90 square meters, 120 square meters and some are already considered big roughly at around 200, 250 square meters, even 300 square meters. And that’s about it, if you actually buy a condominium and you’re looking at the size if it’s 55 square meters or 80 square meters that’s about the space you get. Whereas if you have a house, you can do the second story on the top of the first floor.

So that you will almost always be able to double the floor area of your property and that’s one way to maximize the size of your property. You can get so much more space for your property, when you actually own a residential land.

The third advantage is curb appeal.

Generally when you’re buying a condominium or a townhouse you actually have no choice because you just have to like the way the building looks from the outside. And if you like it, sure go. And if you don’t, you have to live with. You just have to make the inside’s nice.

An example of this is when you’re buying town houses or row houses, since there has to be a uniform look for that particular development you just have no choice well, but you just have to love the way it looks. And if you’re buying a condominium, and even if the size is something you like, and the lobby is nice and the services are good, if you don’t much like the outside facade of the building, you don’t have a choice but to actually like it if you need a space or if you don’t like the space then simply don’t buy it, right?

But with the house when you build your home on a residential lot, you actually have the opportunity to build it the way you exactly like it provided that this are allowed within the deed of restrictions of your village.

The fourth advantage of owning your own residential land is, security of abode.

When you actually own a residential land versus renting a property you actually have the peace of mind and security abode that you will not be evicted, or you will not be subjected to any uncontrollable instances as far as your living space is concerned.

When you are renting you are or may or may not be subject to number one, Escalation rate. Escalation rate is the rental increase that a landlord can implement on ideally on a yearly renewal basis. So locally, he can give you probably as far as 5 to 7 percent increase in rent and if you are not amenable to it. You know, you can actually just cancel the contract and find another place but if you have your own residential land you are not subject to this and you have the security and peace of mind that you have a place to go home to without having to worry about any of these increase in rental rates.

Another hassle that you can encounter is when the owner needs to use his property for his own personal use or for the use of his relatives. So, if you come across that kind of situation and he needs to evict you, what are you gonna do? You’re gonna scramble to find another property to lease out. While there are many laws protecting you as a lessee, it’s also quite beneficial if you own your residential land, so that you don’t have to worry about these things.

The fifth advantage of owning your own residential land is, it’s an investment that appreciates in value through time.

Since land is a finite resource and the population also keeps on growing generally in essence what’s happening is you only have so much land that goes around. And since there are more people that actually getting born by the minute and eventually since it’s a finite resource the demand is usually consistent in some areas and it increases the value of the properties in that particular respect.

As the road networks become better, accessibility becomes easier, commercial areas become built in the vicinity so that it’s more convenient for people to live, schools are established in the area so it makes sense to live a life there and grow a family, and it’s also quite near relatively to the business districts and there are no other areas that offer this kind of order and peace and organization. It could actually very beneficial for you to own this kind of property.

Since, you will have an opportunity to see the land value generally increase through time as you own it. This will act like a type of forced savings for you which is actually quite good.

Nowadays, saving money alone or keeping it under your bed, or your pillow is not enough. Most especially with inflation rate, if you have a million pesos way back in the 90’s it should be, Wow! That amount could really purchase a lot of things. From the time when it was 1990’s all the way to today, this year, as you can see the amount of purchasing power of the money has changed and it might not be able to purchase the same things you were able to purchase back then.

So, you need to have a smarter investment and generally land is a long-term investment and it keeps on appreciating through time because of the developments go in the area.

Now, when it comes to investing on land, its size is your best friend because that is the multiplication factor by which you multiply the price. So, say for example, you bought a property at a 100 square meters for Php 5,000, your purchase price of the property is only Php 500,000, that’s your initial investment for the property.

So, you saved that away, you paid it off and it’s just there. And you build a house you’re using the property, after a few years you’ve seen the property increase in value, and it’s already around, just for example, for this discussion’s sake, it’s already around Php 50,000 per square meters.

So Php 50,000 times 100 square meters is already around 5 million. If we’re to increase in value, from Php 5,000 to Php 50,000 per square meters from a total price of Php 500,000 all the way to 5 million.

So, what I’m simply saying is you can let the same amount of time pass and if you invest heavier on the size because you do know that the value is about to increase in the area you can actually have bigger returns.

Of course, this goes with a lot of caveats and this is a friend or a foe depending on the area where you are at and the developments that are gonna happen in the area.

But as far as land is concerned, generally size is your leverage and it is your key to generating a lot of value and wealth for your real estate investments because it is simply your multiplicand.

At the end of the day, it actually really depends on how you use the property that will make you either win or lose, in real estate investing. And that’s one of the reasons why we were doing this channel so that you will be better in forms so that you can win most of the time or every time that you’re making a real estate investment. It can avoid all of those pitfalls that are actually, potentially out there.

So, when it comes to investing a residential land, size could be your friend or a foe but if it turns out for the better it could be very beneficial for you. And not just that, this will really work depends on how you use it.

So, that’s it for today, I hope today’s topic was able to give you a better idea of why owning a residential land is quite beneficial to your investment as you grow your investment portfolios cause it gives you more flexibility, it gives you more floor area for your space, it gives you a nice curb appeal, it’s a type of forced savings and at the end of the day it can be something that’s worth your time and money.

Thank you and I hope you enjoyed this article, and we look forward in seeing you again here.