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Additional Factors to Consider Before Investing in Land

In our previous blog post, we covered 8 critical factors to consider when investing in land. However, when it comes to real estate investing, there are several other important factors that often go unnoticed or are overlooked by many investors. In this post, we will discuss some of these additional factors that can help maximize your investment and mitigate potential risks. Let's explore them:

1. Wetlands: Wetlands, such as rivers, wells, lakes, canals, puddles, ponds, or aqueducts, are important ecosystems that provide wildlife habitats and water filtration. It is crucial to check if there are any wetlands nearby the land you are considering. If the land is too close to a wetland, ensure that it does not encroach upon it. Many places have legal protections for wetlands, and developing land within or too close to a wetland may not be permitted.
2. High-Tension Power Lines: High-tension power lines, even if only a portion crosses the property, are considered a major red flag for land investments. Development approval from authorities like the Directorate of Town and Country Planning (DTCP) may not be granted if there are power lines on the property.

• High-tension power lines can pose safety hazards due to electromagnetic radiation.
• They can cause interference with electronic devices and create noise nuisances.
• The presence of power lines can make it difficult to sell the property in the future.

3. Reserved Areas: Ensure that the land parcel does not include any areas reserved for parks, playgrounds, or other public amenities. Here are some reasons why verifying this is important:

• Development restrictions may limit the use of land within reserved areas.
• Reserved areas may be subject to public access.
• Additional fees to the government may be required for the use of reserved areas.
• The resale value of the land may be lower due to development restrictions.

4. Proximity to Sensitive Areas: Land parcels should be at least 300 feet away from sensitive areas like railway lines, crematoriums, or other designated zones. Consider the following points:

• Railway lines can have restrictions on land use imposed by railway authorities.
• Crematoriums can emit smoke and pollutants, posing health risks and unpleasant smells.
• Other sensitive areas, such as hospitals or military bases, may have development restrictions.

Additionally, ensure that the property does not encroach upon temple, mosque or church lands, as they are often protected by law, and encroachment may lead to legal action.

5. Forest or Mountainous Areas: If considering land in forest or mountainous areas, obtain approval from the forest authorities. Check for zoning regulations and environmental laws that may restrict development.

• Resale value may be lower due to development restrictions.
• Noise restrictions and other regulations may apply.

Ensure that there are no nuisance animals, such as elephants, that could damage the property or pose risks to safety.

6. Soil Type: Ascertain the type of soil before investing in land, as it impacts value and potential uses. Here's why it matters:

• Soil type affects development costs and suitability for construction.
• Soil type affects environmental considerations like erosion susceptibility.

7. Thorough Verification of Land Documentation: When verifying land registration documentation, go beyond encumbrance certificates, title/sale deeds, and original documents. Land scams exist, so exercise caution when buying or selling land.
8. Properly Handed Over Roads: Ensure that approach roads from the main road and internal roads within the land parcel have been handed over to relevant authorities. Consider these reasons:

• Proper road maintenance is ensured.
• Legal issues are avoided, preventing liability for accidents.
• Property value increases with well-maintained roads.

Whether you choose real estate syndications, real estate crowdfunding platforms, or other alternative investment platforms like REITs in India, conducting thorough research and due diligence is essential for successful real estate investments.

At Compass Investment, our team conducts comprehensive research and analysis to ensure that each investment meets our stringent criteria. We consider factors such as market trends, economic indicators, local regulations, and future development plans. By staying up-to-date with the latest information and leveraging our industry expertise, we aim to make informed decisions that align with our clients' investment goals.