The key to wealth is right under your feet, land

As towns grow, many people abandon land in villages for urban centres to do all sorts of things. They don’t know that ignoring land is a grave mistake. As Ugandans, we need to understand and appreciate the value of land: first as a part of life and an asset. And second, as a symbol of strength and prestige and most importantly as a key to our wealth.

One man once said that “land is meant not merely in the strict sense of the word, but whole of the materials and forces which nature gives freely for man’s aid in land, water, air, light and heat.”

An extremely important fact is that land earns income from rent. If you live in your own house (home), it means that you don’t have to pay rent to someone else. This income is implicit. If you are a landlord, you get payment every month from rentals thus you get a return to your housing. Over a long term, housing is a great investment since as a landlord you can use rental income to buy more property.

Furthermore, unlike other investments, land does not need much of one’s involvement. It is a passive long-term investment. Property taxes or maintenance costs are not even too high.

You can buy land now and build later to ensure that you won’t be priced out of the land market. Take the example of Namanve in Kiira town council in Wakiso that have been rezoned. Once rezoned, the land value there increased.

Namanve, which was once a sparsely populated swamp with very low value where people were massacred day and night, realized great development in the past years as a result of being rezoned into an industrial park.

Many landowners were bought off at extremely high prices by various companies such as Tororo Cement, Azam Company, Coca Cola and Roofings. This literally means that with land, if you do your homework well and ensure that a piece of land is in the path of growth, you could sell it for as much as ten times what you are buying it today.

There are very many landowners willing to sell. Often times, people bought property that they had plans for and never got around it. Some people have inherited land and have no interest in developing it, thus the choice to sell.

Others have experienced a trauma recently and are looking to simplify their lives. Or perhaps the owner lives far away and has no emotional connection to the parcel. Whatever the reason, combine that aspect with low competition and you will have yourself a well-kept investing secret.

Land is a physical asset that cannot be destroyed. Even in the unfortunate occurrence of fires or any such disasters, the land remains. Buildings can be replaced and demolished but land being a finite resource, it cannot be destroyed. Remember, no one is making any more land.

In the 21st century, boundaries for most countries, if not all, are well drawn and they all have a set and fixed amount of land. Like Mark Twain clearly put it, “Buy land, they are not making it anymore.”

When you own land, there are options for it to be banked (mortgaged), developed, leased, rented or even sold to get money for other investments. When banked, you will get money from a financial institution (bank) using the property as collateral while with leasing or renting, someone uses your property and pays you (the landowner) based on a contractual agreement between the two parties.

Lastly, land offers an open and expansive range of investment options i.e. industrial, agricultural and residential development. It is an income-producing asset. Of course the use of the land will depend largely on the type of land, its physical factors such as topography, soil, climate, minerals and availability of water as well as human factors such as population density, availability of capital and technology that are important determinants of use for the intended investment option.

Did you know that land is very easy to buy? And for the most part, that you can buy land when and where you want? Investing in land is not just for the rich and famous, it’s for all of us. It can be purchased without years of mortgage responsibilities. If you take the time to educate yourself, you will learn why land is such a fantastic investment. It is easy to purchase, requires no maintenance and is less expensive than other real estate facets.

Now you just need to determine whether you want to be wealthy or not (right under your feet). Land is only a bad investment if you buy a fake one.

The author is a registered surveyor in Buganda Land Board.

© 2016 Observer Media Ltd