What is 'Land'
Land is real estate or property, minus buildings and equipment, that does not occur in a natural way. Land ownership may offer the title holder the right to natural resources on the land. The traditional school of economics dictates that land is a factor of production, along with capital and labor. The sale of land results in capital gain or loss; under IRS tax laws, land is not a depreciable asset.
BREAKING DOWN 'Land'
The term land can be looked at in a number of ways, and its definition viewed differently depending on the nature under which it is analyzed. The basic concept of land is it is a piece of earth, namely a piece of property that has an owner.
A more delineated concept of land, the legal concept of land, is it is a factor of some form of production, and though it is not consumed during this production, no production would be possible without it. Land is, therefore, a resource with no cost of production. Despite the fact usages of land can be altered from less to more profitable, supply cannot be increased.
Aspects or Elements of Land
The term land is inclusive of all physical elements, bestowed by nature, to a specific area or piece of property. This includes environment, fields, forests, minerals, climate, animals and bodies or sources of water. In terms of being an asset, land includes anything that is on the ground, which means buildings, trees and water are a part of land as an asset. Lenders are extremely attracted to land because it is one of the oldest form of collateral, and because it cannot be moved, stolen, wasted or destroyed. Air and space rights are also covered by the term, meaning all air and space above and below the property is part of the term.
There is a wealth of natural resources that may be present on a property or piece of land that the owner, or title holder, may be entitled to. This includes plants, human and animal life, soil, minerals, geographical location, electromagnetic features and geophysical occurrences. Depletion of various natural resources in the United States, specifically natural gas and oil, is of great value and drilling and oil companies, in many instances, pay landowners substantial sums of money for the privilege of using an owner's land to access such natural resources, as well as shell out small fortunes for large acreages of access, specifically if the land is rich in a specific resource.