Richa07 wrote:
The average price of an acre of land in the United States is now 50 times what it was in 1970, and nearly 200 times what it was in 1920. The nation’s population is projected to keep increasing, even as the amount of land remains constant. Therefore, people who are approaching retirement should invest heavily in real estate in order to ensure their financial security
As per the author, “The average price of an acre of land in the United States is now 50 times what it was in 1970, and nearly 200 times what it was in 1920. The nation’s population is projected to keep increasing, even as the amount of land remains constant. Therefore, people who are approaching retirement should invest heavily in real estate in order to ensure their financial security".In the aforesaid statement author has assumed that there is limited constant supply of land and number of people are increasing (i.e. demand), therfore the prices of the land will increase as noticed in the past trend.
The author's assumption is far-fetched in many ways. Primarily,the amount of land remains constant, but the land that can be inhabitable keeps on increasing with time. For example, areas are developed for both residenial and commercial purposes that were previously uninhabitable. So, from economics point of view, land as a resource is constant. But, the amount of inhabitable land keeps changing. Although, the author has stated that the number of people are increasing,but to co-relate the same with the demand for land, we need to know persons/ Square feet presently. Maybe the growth in population is not such that there is a demand overrun. So, If we do not look at past trends, the author has not given enough facts or evidences for us to conclude whether the average price of an acre of land would continue to rise?
If Mr. X is approaching retirement say he is 58 years old, and as per author Mr. X should invest heavily in land for financial security because an acre of land in 1920 if was of $1, then the same in 1970 is $4 and today is $200.
Assuming, the average life expectancy of Mr. X to be 65, If he buys an acre of land for $ 200 today, by the time it gives any substantial return (if any) to Mr.x, Mr. X might demise. So, from return perspective for a person at ripe years investment in land is not a viable option.
There are so many instances of land mafiaso's illegally enroaching on land. For a person approaching retirement, it would be an unnecessary hassle to incur legal cost and attend courts. From security perspective an investment in land is a risky one.
So, Author has not been able to substantiate how price would definitely increase to make the land as a secure investment, author's claim of investing in land by people approaching retirement seems flawed, as the return on this investment takes at least a decade and as it is not a secure investment.
Richa07I have marked your mistakes in red. A good essay overall. Can score 5.
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