Reviewed by Aug 27, 2020| Updated on
The land refers to a property or real estate, except buildings and facilities allocated by fixed spatial boundaries. Land ownership can provide a titleholder with the right to natural resources, which are present on the land. The conventional school of economics dictates that land, along with capital and labour, is a factor in growth. The selling of land results in a capital gain or loss; property is not a depreciable asset under Income tax rules and counts as a fixed asset rather than a current asset.
The word land can be interpreted in a number of ways, with its meaning being interpreted differently depending on the circumstances in which it is being investigated. The basic principle of land is that it is a piece of earth, that is, a piece of property which has an owner.
When Land is Used for Investing Purposes
The principal economic advantage of land is scarcity. Most investors who buy property do so in order to improve it, often for real estate, including industrial or residential projects that are subject to zoning orders. Investing in raw land can produce substantial future cash flows that can be easily expected once secured, but it can be very expensive and risky to grow land. Related risks can stem from taxes, restrictions on regulatory use, leasing and selling the related land, and even natural disasters.
What are the Traits of a Land?
In terms of being an asset, the land will include all that is on the earth, meaning that homes, trees, and water are an asset part of the property. The term land encompasses all physical characteristics bestowed on a specific area or piece of property by nature. It includes the landscape, fields, trees, minerals, atmosphere, animals and bodies, or water sources.
There is an abundance of natural resources that may be present on a property or piece of land to which the owner, or owner of the title, may have the right. It includes plants, organisms, soil, minerals, geographic location, electromagnetic properties, and geophysical occurrences.