Q&A: Is Land an Excellent Hedge Against Inflation?

“Save money and money will save you.” Without considering economic factors, this old adage may indeed be true. But if you factor inflation into the equation, prices surging every now and then, as in global crises, your saved money probably won’t give the security you expect. It’s not enough to save money. As many financial advisors say, it’s important to invest.

In the matter of profitable assets, real estate remains to be one of the best options. For the most part, property values increase over time, curbing the effects of inflation. In the recent Lamudi webinar titled Housing Trend Update: What Do Homebuyers Look for in the New NormalPaul Ramirez, Director & Head of Valuation of Colliers Philippines, particularly mentioned land as good protection against surging prices.

Using Land as Inflation Hedge

Aside from the capital appreciation, land assets provide financial security in that they’re not as volatile as other investments. Land value is relatively stable even with economic shake-ups. Some seasoned property investors would even take advantage of bear market conditions to earn substantial gains. 

Meanwhile, compared to other real estate assets, land is quite inexpensive to maintain. There’s no need to pay for repairs and maintenance. Costly renovations aren’t necessary either. Moreover, you won’t have to invest in high-powered security systems to protect it and keep it from being stolen or destroyed.

The versatility of land offers endless opportunities for more profit-generating opportunities. If your asset is in a residential area, you can build an apartment complex or multi-family real estate, rent it out, and enjoy a stable stream of passive income. On the other hand, if your asset is in a commercial zone, you can rent it out as is for companies looking to build their warehouse, retail store, or office building. 

A piece of land can likewise be for agricultural purposes. Similar to commercial, you can rent it out as is or build a farm yourself, selling the produce in local markets. The versatile nature of land helps you grow wealth, which is an effective protection against price surges in the future.

Getting Started on Land Investment

Although land is indeed investment-worthy, it’s not a secret that buying this type of asset comes with a huge cost. For most people, especially first-time investors, this is the huge drawback when investing. Before you’re able to make your money work, it sometimes takes years to build up the fund necessary for the purchase. All the same, it’s possible to make it more accessible to your budget.

Here are some ways you can get started:

Explore Different Locations

The long-term value of land largely depends on the location it’s in. At the same time, the property address influences its price. In general, land assets in Metro Manila are more expensive than those in the provinces. Consider these locations when buying land. 

The suburban communities near the capital, including Cavite, Laguna, Rizal, and Bulacan are poised to have promising capital appreciation in the near future as they benefit from the big-ticket government infrastructure projects, including expressways, bridges, and train systems. These provinces host excellent residential and commercial lots for sale, giving you plenty of choices accommodating your unique investment goals.

Buy Foreclosed Land

Most of the repossessed land assets come with prices lower than the market value. In some cases, there’s a huge discount as financial institutions are motivated in disposing of them. The benefit of buying foreclosed properties for sale is that the transaction is clean. Since they’re from the government or banks, you can have the peace of mind that everything’s legitimate. It wouldn’t have any pending court cases or financial liabilities you’re not aware of, such as real estate taxes.

Work with a Broker

A good real estate professional knows all about the available properties in different locations at different price points. Therefore, they’re a good reference for finding the right land to invest in. On the Lamudi platform, you can count on all the professionals with a Verified badge. They can give advice on financing concerns and investment strategies that maximize your money.

Remember, saving money isn’t enough. Make it work for you to weather the stresses and pressures of inflation. If you’re ready to invest in real estate, choose land. Browse through these lot for sale listings and start your investment journey.

Stay tuned for the latest real estate news and tips by following Lamudi on Facebook, Twitter, Instagram, Youtube, and LinkedIn.

Photo via DepositPhotos

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