If you are looking around at the price of homes and thinking that charge is way beyond what you can afford, maybe you should be looking at buying land instead.
Purchasing such properties is always a good investment. Buying land today with a plan to build on it tomorrow is a good strategy, but land is also valuable all by itself. Undeveloped land or land without a residence on it is much more affordable than properties on which homes are located.
Such properties appreciate in value with time, especially if they are located in an area which is being developed otherwise. In five or ten years after buying, the value might be such that you can sell it, or borrow against it for construction on the same location.
Buying land is a good strategy for portfolio diversification. Real estate is likely to always go up in value, by which time it can also be borrowed against, for business and other projects.
One place to start seeking land is in well-developed areas with empty lots. You can be almost certain that the land will rise in demand over time. You can also shop for land in scenic locations.
Finding land owners is not impossible. Start by checking the owner of the property next door and collecting the address. Then go to the titles office (land agency) or the National Housing Trust (NHT). When you have found the owner you can make an offer.
The further away land is from the city, the cheaper it becomes. There are, however, some communities which have the potential for future development which must not be ignored.
You can buy land in areas that you may consider a future home. Consider, for example, if you want your children to grow up in a community with large spaces to play in and clean air.
If you purchase land today in such a community, you can slowly save towards the construction project. Building is estimated to be cheaper than buying properties ready-made as well.
Land appreciates in value if it is in the right location, unlike stocks and shares which can go up and down with the market.
One other benefit of buying land is that, if it is done by a developer which has already put in infrastructure, this will be a good selling point if and when you plan to sell in the future. Always check for developer discounts if more than one is available. Some developers offer discounts if you buy more than one lot.
Buy land with a view or a good location. If the lot you have purchased is near to the beach, has a view of hills, or located near amenities which make life enjoyable or amenities accessible for future owners, that's something to consider.
Cost and time frame
You will need a tax registration number to buy land in Jamaica. After that, it often takes 90-120 days to close a real estate buy, especially when the purchaser is using a mortgage.
Cash sales can take 38 days to 60 days mainly because of the Stamp Office, as the contract for sale has to be stamped and stamp duty and transfer tax are required to be paid.
Transfer tax, in particular, is assessed based on the value of the property, so you will also need to have the property valued by a valuator and a surveyor to establish the property's boundaries. Often the valuator and surveyor services are offered as a package.
Be prepared to pay about 5.5 per cent of the purchase price of the property in government charges, plus the cost for valuation report and surveyor's report. If you have secured the services of a lawyer, that too, is an additional charge.
Land is much cheaper than a property on which a building has been constructed. The amount charged might be such that you do not need a mortgage to buy it. What all of this means is that you will have an asset which is improving in value and is not attracting any charges such as maintenance and utility bills, apart from property taxes.