Holding land for the purpose of receiving an income is one of the hallmarks of an investment. However, as we have seen, it is quite possible for land to constitute a trading asset in spite of the fact that the owner has let it profitably over a period of many years (see 3.9 for cases involving builders).

The converse to this principle is that the land cannot be an investment if it produces no income, or where the rental receipts are exceeded by outgoings. However, this result does not automatically follow – the reason for a poor income yield may simply be that the owner made a bad investment.

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