Land Buyers Guide

You may be asking yourself if the purchase of land is a safe and profitable investment of your financial resources. It is indeed. The real estate market has a track record that speaks for itself. For the last quarter of a century, land values have far outdistanced the inflationary spiral that effects real economic growth and avoided the pitfalls of saving depreciated dollars or investing in risky and speculative investment markets. Even through the recent housing market crash, real estate has remained robust. You may not be surprised to learn that the value for recreational land is far outpacing that of residential homes.

Timing can be just as important as the choice of property. A historical chart of real estate values would look like a set of stairs with values climbing for a couple of years, then leveling off for a while, then climbing again. It would be impossible to state with any real assurance how much real estate values will climb next year, which properties will increase in value the fastest, or in which geographic location will appreciate fastest.

Most people invest in property as their primary method of financial return. People who purchase real estate as an investment benefit from the returns in a short period while enjoying the benefit of their property until they sell. Growing equity is a feature of land investment even if the property left idle. A good return on real estate can be achieved only when the seller understands that a reasonable amount of time is needed to find the “right buyer” who offer the “right price” .

Questions You Should Ask Before Buying

Q. Is the property surveyed?
A. With a surveyed parcel of land you have a guarantee that the extent will be exactly as described. Boundary lines shown on a survey map should be marked on your property.

Q. Is financing available?
A. Financing on unimproved land is difficult to find and almost impossible to obtain on a property that is out of state. Banks who agree to finance land usually appraise the property before offering any finance. They will often prove more beneficial to you than your local lender.

Q. Is the title to the property clear?
A. A ‘clear title’ will ensure your peace of mind make your property far more saleable than others that are encumbered by title problems. The Minimum requirement should be the ability to obtain a bank loan if the title deed is clear.

Q. What services are available in the area?
A. The answer to this question will help to determine the feasibility of any property for you. Often, there’s always a tradeoff. When you’re buying rural property, it is important to know about availability of water, electricity and access. Acquiring these amenities yourself is a costly exercise when swapping the conveniences of the city for the peace, tranquility and charm of living near a small town.

Q. What are the current taxes on the property?
A. This might be the most important question you can ask! Currently stamp duty is available as government tax and this should be paid by the buyer
1st LKR 100,000 - 3%
Balance Amount - 4%
If the buyer is not a Sri Lankan citizen this duty will go up to 100% of the property.

Q. Are you aware about the seller?
A. It is important to know whether the seller owns the property or if the real estate company has a good reputation in the industry. There have been several instances in which people have been mislead by companies or individuals.

Consider Cost Factors

Land ownership is a goal that is within your reach. However, an accurate assessment of your financial capabilities, your lifestyle, and your goals for the property are essential to making the “right buy”. In most cases it is feasible to own a sizeable block of real estate away from population centers where land is not measured and sold by the number of perches.


Location always determines price and this will directly affect how much property you can afford to purchase. You might want to consider purchasing property 5 – 10 minutes away from obvious city limits to reduce your purchase price.

If you are in the market for a home site, consider both values as well as privacy needs. While 10 or 15 Perches will provide adequate privacy, more extent might be a better buy. Cost per perch on 1 to 2 acres will be much less than if you’re only buying a small extent.

Land with southern exposure can cost less in the long run. Home builders should keep the architecture of the landscape in mind when purchasing property.

Be an Educated Buyer

Consult professionals to immerse yourself in the details of your purchase. There are many experts available to guide you through the purchase process. Never leave yourself open to costly and unpleasant surprises. Home Lands Holdings Land Consultants are well versed in every aspect of land acquisition and will help you to secure an appropriate piece of land.

The Bottom Line

ALWAYS… Discuss the availability of owner financing. Many real estate companies will not be able to arrange proprietary financing or partner with a bank familiar with your property due to several reasons.

ALWAYS… Ask for a recent survey. The more recent the survey, the more accurate and reliable it will be. In addition, a property should always be marked for your inspection.

ALWAYS… Insist on reasonable access. Closer to town, a private road is desirable.