Hi,
I have two pieces of land. The plan is to build 4 small apartments on Land One and rent them out for a passive income. The sale of Land Two can pay for the building of the apartments on land One. But, I will no longer have Land Two.The other option is, to put a shed/warehouse on Land Two and rent it at a higher monthly rate than residential apartments. I’d have both lands, but, Land One won’t be doing anything in terms of providing and income (I won’t have enough money to build apartments).
Which is the better option in the long run?
rent is better option in my opinion
Hi,
Owning land is a generic growth strategy. It usually delivers no income, other than agistment and storage, so because it is growth orientated, it tends to be speculative.
As investors, our job is to make the most money, in the quickest time, for the least risk and lowest aggravation. As such, what is right for one may not be right for all.
In your case, I would complete financial models on the returns of each, and of both, with the financial outcome strongly influencing which way I was to act.
Sadly, quite a large number of people don’t know how to crunch the numbers, and so make decisions based on ‘feel’ or ‘intuition’. The problem with that is that they are emotion based and so judgement can be easily clouded.
So, my answer to your question is to proceed with the option that gives you the best return, for your time, money, skill and risk tolerance thresholds.
Bye,
– Steve
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Thanks Steve!
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