Question

Discuss the five characteristics of land and six of economic advantages of owing land.

Answer 1

In economics the word 'land' is also used in a broader context. It doesn't just mean the surface of the soil, it also includes all those natural resources that are nature's free gifts.

Characteristics of Land:

Man must make every effort to acquire other production factors. But no human efforts are needed to acquire land. Land isn't the result of human labour. Rather, it did exist long before man's evolution.

The total land quantity undergoes no change. It is limited, and human efforts can not be increased or diminished. There can be no alteration to the surface area of the land.

All items man-made are perishable, and they may also go out of existence. But territory is indestructible. Consequently, it can not go out of existence. It is not devastating.

We have to start with land in any sort of production process. For example , it helps to supply raw materials in industries, and crops are grown on land in agriculture.

This is because by itself it can not produce anything. For example, wheat can not automatically grow on a piece of land. Man has to cultivate land for wheat to grow. Labor is an active factor while land is a passive generating factor.

Can not be moved from one place to another. No portion of the surface of India , for example, can be transported to some other country.

Benefits of Owning Land

Land is more exciting to own than stocks. There is a reason it is called "real" property. You have the base when you own land to dream, design and create your new home, when the time is right. Purchasing acreage also gives you a lot more space than crowded lots of cities.

Buy land on the growth markets course. Owning land close to prime or up and coming growth areas means your property is more likely to increase its value at a faster rate. To ensure that the area will maintain its value for years to come, check the area for zoning, building codes and other regulations.

Land ownership gives peace of mind to the proprietor. Raw land does not wear out or depreciate as a long-term, tangible asset and there is nothing that can be stolen or broken on it.

It is a resource limited and relatively inexpensive to own and requires little maintenance. That is a fairly hands-off investment, in other words.

There is also little competition on the land market, as the majority of real estate investors focus on investments such as rental and commercial property.

Raw ownership of land may definitely be a major investment for those looking to diversify their portfolio.