The following is a guest post from Dr. Slim Feriani, the Chief Financial Officer and Executive Vice President for Finance and Investments of U.S. listed ROI Land Investments Ltd (OTCQB ticker: ROII).
There are countless ways to invest and many investment products to consider before deciding where to put your money. Although investing in land has been profitable for many people and corporations around the world, it is a system that is often misunderstood and under-appreciated by the average investor. That lack of understanding creates a lot of opportunities for anyone looking to take advantage of an overlooked market. But first, a few myths about land investment need to be dispelled:
Myth: Wealth is a requirement.
Reality: Many people can afford to invest in land. When people imagine the average real estate investor, they think of billionaires and wealthy corporations purchasing thousands of acres of land or skyscrapers in the middle of Manhattan. This is actually only a very small part of the real estate market. Many smaller investments are made every day by firms that represent groups of individual investors. It is a versatile opportunity that makes it possible for people to spend what they are able, and often much less than many expect.
Myth: Cheap land is best.
Reality: Buying low and selling high is how people make a profit, but this does not always mean that the cheapest piece of land is the only one with the potential to earn a return. In many instances, inexpensive land lacks potential. There may be environmental concerns, zoning problems, or any number of other issues that prevent it from having value. Conversely, land that seems to be expensive can be deceptive. Even if it is at the top price for its current use, that does not mean it cannot later be used in a way that may make it even more valuable.
Myth: It is a long-term commitment.
Reality: When people decide to become involved in land investments, they are not required to remain involved until a project is completed and ready for its final sale. The most profitable investments are those that are made to sell to other developers. For example, a large area of land is purchased and parceled off. Some acreage is sold to developers who will profit by designing a housing community. The portion of the land that is the most fertile may be divided and sold to individual entrepreneurs who wish to farm the area. This allows each piece to be used to its full potential and sold at the highest price. By not developing it before the sale, it remains desirable to many different buyers. Even partially developing it by clearing the land and obtaining permits for its future use is a fast process that makes it available to the next buyer quickly.
Reality: Investors can profit without needing to know a lot about the area where the land is located. It is possible to invest with a firm that manages these details for their clients. Just as many people use a broker to invest in the stock market, there are firms that do the same with investments in land.
There is always risk with any investment, but there are ways to reduce the odds of losing money or even of not earning the desired profit. Companies that offer these options to their investors must be able to provide previous return on investment statistics. By working with companies that have a proven track record, investors will have a greater chance of growing their wealth.
Dr. Slim Feriani is the Chief Financial Officer and Executive Vice President for Finance and Investments of U.S. listed ROI Land Investments Ltd (OTCQB ticker: ROII). Dr. Feriani completed an MBA and Ph.D in Finance & Investments at the George Washington University, where he taught Finance and International Finance for 7 years and currently serves on the advisory board of the business school. He has 20 years’ experience in global markets across all asset classes. Dr. Feriani is a specialist in global investing and emerging markets.