Purchasing a bare land for investment and buying a property on a piece of land are two different things. Commercial land investment has its advantages and disadvantages which are different from leasing a floor on a building. Commercial land investment is said to be a secure investment and easy to maintain. However, it also has many challenges that could push you to the edge.
In Kenya, there are so many horror stories related to commercial land investment. This factor pushes away investors fearing to lose their money. They never look at the whole picture. Commercial land investment has so many advantages that outrun the possible risks. Successful land investment is one of the greatest returns on investment.
A successful land investment needs keen analysis, research and comparison of the viable options available. It also needs a market study of the returns of investment within the location you want to purchase the land. Your land investment choice should be done after depth study of these returns against your expectations or needs. If they don’t match, then that land doesn’t match your standards, look for another.
If you are interested in buying commercial land, you should always let your interests lead you. You should also have on your fingertips key factors to look for before investing in that commercial land. The following are some of these factors that you should look into:
Zoning is a way of the government to control the physical development of an area, by assigning different permitted usage of land within a certain zone. For example, you may want to start a manufacturing company in a certain place but the zoning permits only residential properties. You will be then forced to negotiate the sale agreement contingent on the rezoning of the property which will waste a lot of time and resources that could have been used to develop the land.
Note that zoning greatly affects your future business on the land. It controls the waste management, noise level, water supply, parking regulations and many more. This is why the location of your commercial land will always matter as far as zoning is concerned. Always make sure you know the zoning laws of the commercial land of your interested before investing.
Buying commercial land requires more digging than any other property sector. The land is not only about what you can see. Never ignore the possible utilities on the land, you might end up a list of hidden costs knowing at your door now and then. You should have a deep look at infrastructure development such as roads, water and electricity. Lack of some of these things is a turn off to investors or even withhold your business development.
You ought to look at:
- Land topography
Since land is raw, it is important to understand the topography of the land so that you can gauge if it matches your plan development on it. Even if the zoning may allow your interest, the topography may limit you.
As mentioned before, utilities are some of the key factors that determine the return of your investment. Check whether you have all the necessities to attract investors and if not, try to see if they are within reach
This involves checking what’s below the surface of the land. Make sure the soil is tested for poisonous waste or whether there is an underground pipe to avoid future inconvenience.
Use a professional
commercial land is so complex that an unskilled person may regret ever deciding to invest in it. This is where a professional broker comes in. A professional will have your back by handling all transactions, guide you through the whole process and even help you in closing a prospect. He will also advise you on the land’s value, future market and make you aware of better deals in the market. Using a professional broker maximizes on your current and future returns.
when looking for one, you should ask for recommendations from your friends or family so that you can avoid leading yourself into a conman’s trap. You can also do research on social media platforms and the online reputation of the person.
Buying commercial land is very interesting. You could be within the right zone, have all the necessities you need but still have limitations. Deed restrictions are one major factor that could limit you.
Deed restrictions are the power-based to the landowner throughout the title deed to use the land. Deed restrictions can allow or deny you from practising a certain activity on the land. For example, a deed restriction may limit you from having a commercial development even though the zoning allows it. Deed restrictions cover almost everything including building heights, type of buildings or even property maintenance. Deed restrictions mainly affect the future use of the land.
For those to use the land for retail purposes, an area with a fair population will be convenient for you. This is because you will be targeting the residents as the market. An area with a low population will have a low uptake of your produce and vice versa.
For example, buying a commercial land at Gigiri will have many prospects knocking at your door due to the high population and demand in the area. This would be a different case if you bought a commercial land in a remote area where the population is low.
As we always say at commercial property Kenya, never make a blind decision when investing in any property. Investments always give 2 results: profit or loss. It’s up to you to make a decision and follow the above major factors to look for when looking for commercial land to avoid simple mistakes many before making, especially the first-timers.