Bursting with excitement, she told me “I just bought 10 hectares of land for each of my five grandchildren!”
“How very thoughtful – what did that set you back?” I asked.
“Just $20 a hectare and each block has unbelievable views!”
“Wow! Where did you find such a fantastic investment?”
“On the moon,” she replied.
BY JOHN LINDEMAN
It was true. She showed me the title deeds she had received from the vendor, a company called Lunar Embassy detailing the exact location of each grandchild’s plot of lunar land.
“They’re certainly very innovative property marketers,” I said.
“What an ideal gift for my grandchildren, as one day, who knows how much moon land could be worth!”
The need to own land is rooted in our past – when we ceased being Stone Age hunters and settled into farming communities. The control of land enabled us to house, feed and raise families in peace. Land ownership is synonymous with security and this explains why property is fundamentally different to other forms of investment – you can buy shares, savings, bonds or commodities without any guarantee of a return, but as long as there are people, property will have value. The lunar land venture shows us that this concept is so deeply rooted in our psyche that people will even buy land on the moon – but buying land on the moon isn’t about the potential value of moon land, it’s about whether the Lunar Embassy has any right to sell it to her.
The value of land is dependent on two basics – who owns it and what can be done with it. Nevertheless, it would be suicidal for you to assess a property’s potential by looking at only the fundamentals. Along with opportunity comes risk, so always be sure to check any potential property purchase for the sorts of things that many investors miss:
• What’s the area’s fire and flood history?
• What’s the location of planned freeways, airports, flight corridors and railways?
• What’s the current local land use zoning and are there any proposed changes?
• Are there any easements, caveats and other encumbrances to the title?
• Have improvements made on the property complied with council regulations?
• Is the property serviced by town water, power, gas and sewerage?
• What developments are proposed for the area?
• What is the forecast rent demand?
• What’s the predicted buyer demand?
Of course, if you buy a block of land on the moon, none of these will matter!
John Lindeman is chief property consultant at innovative housing market analysts, Property Power Partners. For more information visit www.understandproperty.com.au