The Best Solid Investment in Sri Lanka - Land Sale |Battle month|02

Hello Steemians,
I am writing this to express my by heart feeling on the investment. As a young, we are seeking in various pathways to invest our money.

When we are selecting an investment, we have to do several economical and financial analysis such as NPV ( Net Present Value), IRR ( Internal Rate of Return), Payback Period, etc.

And other important thing is the risk. You may well identify the risk factors linked with the relevant investments and need to study them deeply to find the effect of the risk to the investor. Usually least risk gives less profit and high risk gives higher profit.

I am neither a good economists nor a good businessman. But I will share this with you in the common sense.

There are many way of investments.

• Bank fixed Deposits
• Stock Market Trading
• Forex Trading
• Land Buying & Selling
• Vehicle Buying & Selling

Nowadays fixed deposit rate lays at a low level around 5%. That means if you invest Rs 1,000,000 ( 1 million) in the bank for 5 years, you will end up with Rs 1,276,281(1.27 million) in hand. This is the least risk investment method that anybody can tolerate.

When it comes to buying a land, Usually value of a land will be double in every 4-5 years. But this doubling period may get extended up to 7-10 years upon the location and social revolution of that particular area. Anyway most of the time it reaches twice in 5 years. So let's buy a land of worth 1 million rupees. The resale value will be 2 million rupees after 5 years.

I am not gonna discuss about the Colombo stock exchange or about Forex market because I am not familiar with this. Anyway I would like to share with you some fact about block outs and land sales.

This is some risky investment but you may earn high profits. I will give rough figures about blocking out of lands.

• Let's say you buy a 10 acre land ( 1600 perch).

• You have to provide internal roads according to the government regulations. Usually that would take about 10-12 % of total land area. So you will loose around 1 acre (160 perch) for roads.

• Then you have to allocate 10% of remained area for Recreational activity. So you will loose another 0.9 acres (144 perches)

• Ultimately you will have 8.1 acres (1296 perches) to be blocked out.

• Let's say your buying value of land is 4 million per one acre. Then your total cost would be 40 millions.

• Now you are selling a perch for Rs 250,000. (Hereby I am taking real value from a case study)

• Finally you will end up with 324 millions.

Here you also have to consider about the development cost ( 5 millions per acre) and promotional cost ( Let's say 10 millions)

Therefore total cost = Buying value + Development cost + Promotional Cost
= 40,0000,000 + 50,000,000 + 10,000,000
= 100,000,000 Rs

Total Profit = 324 millions - 100 millions
= 224 millions.

If we interpolate the profit of fixed deposit and land investment for 100,000,000 input,

Method	Profit	Profit %	Payback Period
Fixed Deposit	27 millions	27%	5 years
Land Investment	100 millions	100%	5 years
Land Sale	224 millions	224%	5 years

Many people will go for fixed deposit as an investment. But try to understand this and choose your pathway by your own.