When investing in land, it’s essential to grasp the importance of land enhancement. This process can significantly increase the land’s value, making your investment more profitable in the long term.
The land market in Israel is one of the most sought-after and stable investment channels. Local lands have shown impressive value increases over the past 20 years. They are considered a limited resource that becomes rarer each year, yet demand continues to grow. That said, not every land parcel is a good choice for investment, so it’s important to understand the types of land in Israel and why they are considered low-risk investments. Additionally, it’s crucial to learn about land enhancement and how it can significantly increase the value of the land and your investment returns in the future. The great news? we are here to help you with all of this, so let’s get started.
Land Market in Israel
In Israel, 93% of the land is owned by the Israeli government, and only about 7% is privately owned. This is important because it shows that land is a rare and essential resource, especially considering Israel’s growing population and the need for more residential areas. In fact, it is prohibited by law in Israel to build on lands not designated for construction, such as agricultural lands. However, there is a bureaucratic procedure called land reclassification which aims to change the land designation (for example, from agricultural to construction land) in order to enhance and develop the land. One of the main reasons why lands in Israel are considered low-risk investments is because land prices are very stable, and there is potential for significant value increase, both organically and through development.
What is land enhancement?
Land enhancement is the process of improving land to increase its value through various actions and investments. This can include changing the land’s designation from agricultural to residential or commercial, planning and building infrastructure, adding public services and facilities, and more. Each of these actions requires careful planning, government approvals, and financial investment, but they also promise a significant increase in land value in the long term. Essentially, land enhancement represents a golden opportunity for long-term investments and is a key part of investment strategies due to its potential for high returns and long-term profitability.
To illustrate, if the average price of an apartment in Israel is currently around 2 million shekels, the land enhancement process can begin with purchasing land for compromise at a more flexible and accessible price. Then, by compromising the land and obtaining building approvals, there is an opportunity to sell the land or develop valuable assets that are hundreds of percent more valuable than the original investment.
Why is investing in agricultural land for enhancement a great and low-risk investment?
The lands in Israel have consistently increased in value every year, with high potential for further organic growth, significantly reducing the risk for investors. Unlike the housing market, where high prices can limit investment opportunities, the land market offers a wider range of prices, allowing investors to purchase land at lower prices. After completing necessary compromises and enhancements, the value of the land could increase substantially. This allows investors to sell the land at a profit, wait for planning approvals and compromises, or even wait for construction and own a new property in a sought-after residential area in the future.
Investing in land not only offers high profit potential but also helps preserve the value of the investment, protecting against inflation and the rising cost of living. However, to maximize the benefits of investing in land, it’s crucial to seek advice from land experts who are familiar with the market and relevant regulations. Proper preparation and a deep understanding of the required processes can ensure that the investment is not only safe but also particularly profitable.
Interested in hearing more about the process of land enhancement for investment? Meet Sadot Group
Sadot Group is known as one of the leading and professional real estate companies in Israel. With rich experience and expertise in profitable land investments, our experts are at your disposal to ensure you receive the optimal solutions according to your personal requirements. With full service providing professional accompaniment, advice, and assistance in all aspects of real estate, including compromise processes and building approvals on agricultural land, we guarantee that you can maximize the potential of your investments. As a company that has successfully accompanied hundreds of investors in various projects across the country, we place a huge emphasis on transparency and understanding the aspirations and special needs of each client.
By contacting Sadot Group, you can be assured of receiving top-quality service and a smooth, secure investment process. Our experts are dedicated to safeguarding all your interests at every stage of the investment. This is our commitment to every investor who selects Sadot Group as their partner.
Want to know more? Sadot Group invites you to a free initial consultation with no obligation.
