Over the last few years, there has been an increased demand for rural land to develop in Ireland. It isn’t surprising when you consider the benefits of buying land over other investment strategies. Buying land in Ireland isn’t for everyone, but for any investor looking to diversify their portfolio, it’s an opportunity that shouldn’t be overlooked. If the prospect of buying land is new to you, this article will talk through some of the reasons why purchasing Irish land is a good investment and some of the benefits of investing in Irish land.
Is it a smart move to buy a piece of land in Ireland?
Vacant land in Ireland is one of the most lucrative, yet misunderstood, property investment opportunities out there. An element of security and stability comes with buying a piece of land. If you can find one in the right place for the right price, land can be far less problematic and competitive than other property investment types. The population of Ireland is growing all the time, and with that comes an increased demand for land to build commercial and residential properties. So, buying a piece now can be an excellent investment whether you intend to build on it, leave it vacant or rent it out.
However, buying land without considering your long-term strategy might not be a good use of your money. Before jumping into a land purchase, make sure you take the time to do your research and understand if there are any planning or development considerations as to what the local amenities offer a land owner in the area. If you need help finding land in your preferred area, you could utilise a land agent’s services to ensure you are buying the right plot. A land agent will also be able to help you find land which has the potential to build on.
Pros of buying land in Ireland
There are some real benefits to investing in Irish land, and as with any investment, some areas where you should exercise caution. Let’s take a look at some of the pros of buying land in Ireland.
It’s a finite resource
There is no way of making more land than is already available. In Ireland, there is a set amount of land available for resale. It is reported that the volume of available land amounts to 17,434 hectares which could, in theory, enable the construction of over 414,000 dwellings across the country. Although this is a considerable volume of land, once it’s sold, there will be no more available, and it will always be in demand should you wish to sell it later.
It’s a tangible investment
A plot of land is going nowhere. If you are an investor looking to diversify your portfolio, land is not a volatile investment like stocks and shares that could potentially vanish overnight. Land is a physical asset that will hold value despite any economic turmoil in the world. Over time, currency and monetary value will change, but you will always own your land regardless.
It’s not competitive
The housing market has become competitive, especially in recent years, which has at times led to artificial price inflations as people bid high to get the property of their dreams. Most investors are attracted to the more glamorous side of property ownership, including buy-to-let and house flipping, rather than buying vacant land. This means you are more likely to be able to purchase land for a competitive and fair price.
Land can be low maintenance
If you don’t have any immediate plans to build on or rent the land you purchase, it can be a relatively low-maintenance investment. There are no plumbing issues, potentially no tenants, leaking roofs or any of the other problems that come hand-in-hand with building ownership. As long as you know the purpose of the land and give it a function, your land will sit there quietly appreciating over time with very little input required.
There are no restrictions on non-residents buying Irish land
There are no restrictions or limits on foreigners buying Irish land. Regardless of whether you are looking for land to build on for residential or commercial purposes, you are free to do so. However, you should remember that you will not automatically be granted residency if you purchase land in Ireland. You should follow the appropriate rules regarding residency and limitations on the length of stay per visit.
Cons of buying land in Ireland
Now that we’ve looked at some of the benefits of land ownership, let’s next consider the disadvantages you should be equally aware of.
Profit is never guaranteed
Although land appreciation over time can be a big draw to investing in vacant land, a good return just like with any other property investment is never guaranteed. Land values are not entirely immune to price swings and crashes. In the current economic environment, it’s hard to imagine the price of land going down. However, nothing is impossible.
Vacant land can be tricky to finance
Obtaining a mortgage on a plot of land can be far tougher than securing one against the physical bricks and mortar that comes with property ownership. Lenders will need to consider the costs and risks of financing land, which is not always considered adequate collateral for a loan. If you find yourself struggling to finance a land purchase before full planning permission is granted, a bridging loan could provide a short-term solution whilst longer-term finance is arranged.
Raw land can be a speculative investment
Until planning permission is achieved and zoning restrictions have been addressed and confirmed, the land value is purely speculative. Land pays no cash dividends, has no utility until it is developed and costs money while you wait.
Providing you are looking for a long-term opportunity, buying land can be an excellent investment. If you are buying land for residential development, you’ll need to ensure the land has all the necessary permissions. Make sure you also take the time to understand the land’s potential for development and the availability of utilities such as mains water and electricity to the area. For more information on buying land in Ireland, be sure to check out our definitive guide.