As investor you tend to have many queries as to where to buy property. Some are considering buying the property in a business streets, other in non-busy street but dilapidated property. Other investors consider going upcountry and purchasing vacant land.
Each real estate investor has unique reasons that persuade them to consider such places. Some of the reasons that people consider include the following.
- To build residential homes where they can raise their families.
- To build residential property for renting out.
- For speculation purposes.
- For farming purposes.
In this article we are going to look into properties that are purchased for speculation purposes. So the question we will ask ourselves, is properties in urban centers or semi-urbans worth investing in?
Properties speculation purpose
These are properties that include plot or physical real estate properties that you buy and wait for its prices to appreciate for you to make a profit through capital gain.
Location of these properties determine the profit margin that you will make after the transactions is done.
- Properties in Urban centers
Buying plots in urban areas especially near central business district will attract little or no capital gain after considerate period of time. And the reason for that is because, the infrastructure and social amenities in the area are fully developed.
There is no compelling reason that will spark rapid demand of such properties. Thus if you are investor and interested in such property, then you should reconsider you plans for maximum gain. Perhaps you should consider developing commercial properties so as to earn income.
Often such properties are expensive and banks are reluctant to fund it because of high risk. Most of investors who purchase such properties often experience undercapitalize and risk being auctions by banks.
- Properties is Semi-Urban centers
Properties that are located in the outskirts of a city or a growing town with major infrastructural development in the area.
For instance, properties in Ngong town, one of the satellite town within Nairobi offers the most ideal opportunities to investors who want to speculate on land. For instance, some few years ago, the properties in the area was going for $3000 per 1/8th acre plot and now it is going for $9000 per plot. This is a significant growth in terms of capital gain.
Often these properties are very cheap and affordable and it is design to meet the needs of middle class populations who want to live at strategic locations to the city.
In conclusion properties strategically located in the outskirts of a city tend to offer the highest capital gain to real estate investor.