Risks of a land plot as investment capital: concept and classification

The article examines the concept and types of land risks determined by legal regulation, which affect the determination of the value component of land resources, the investor’s decision to acquire rights to a land plot in order to preserve and increase profits or achieve social and environmental effects. The author notes that the value component of a land resource is not always obvious and taken into account, since it is formed by other components than expert assessment. The investment value of a land plot is determined by the purpose of its acquisition on the title right, the purposes of use, capital investments and expected future income. Such a calculation is carried out on the basis of an analysis of all components that influence the determination of investment conditions. The assessment of a land plot as investment capital is carried out using various approaches and formulas, one of which is the assessment of land according to the criteria of “investment attractiveness”. A constant element of such an approach is “risk”. The risk components of a land plot are mostly based on its agro-economic, urban planning or natural resource characteristics, leaving out of consideration the risks of the land plot caused by legal regulation. Based on the analysis of the norms of legislation, the author concludes that the risks of a land plot can be defined as probable negative consequences that may occur when using a land plot as a result of its acquisition on the title right. The basic criterion for the formation of land plot risks is the cause of the risk, which can be understood as legal facts and factual circumstances that negatively affect the formation of the expected investment profit from the acquisition of rights to a land plot. Identification and study of the risks of a land plot, determined by legal regulation, allows you to make a decision regarding its acquisition on the title right, planning and implementation of economic activities using the land plot.