What is Land Banking

I always felt very secure and very safe with real estate. Real estate always appreciates.
~ Ivana Trump

Simply stated, Land Banking is the process of buying pre-developed parcels of land, holding the land and then selling the land in the future for a significant profit. Verified by historical facts and research, ideal Land Banking parcels should be identified and purchased in future major metropolitan growth corridors before the new development actually occurs.

Purchased land is banked until there is a substantial increase in value. Land value typically increases as the result of rezoning, population growth or municipal expansion. The Land Banking process does not include making improvements to the land. Most Land Bankers sell the land to commercial or residential developers who make improvements to the land

Why Use Land Banking

All a man has to do to get rich in America is find out where people are going, get there first and buy land.
– Gen. Douglas MacArthur

Land Banking is a historically proven long-term investment strategy used by government agencies, corporations, non-profit organizations and individuals. Governments purchase land for preservation or to prepare for future land needs; businesses leverage Land Banking to gain strategic or competitive advantage by retaining development control in critical areas; and individuals use Land Banking as a long-term wealth accumulating strategy including:


Historical Consistent High ROI

Increasing populations and sprawling cities make land a hot commodity around the world. Hungry corporations and developers identify and purchase open real estate for future commercial, retail and residential use in the paths of growth. Successful Land Bankers can project future growth based on historical information from similar areas over almost any 10 year time period. Therefore when holding land for typically 10 or more years a Land Banker can maximize his/her returns by capturing multiple value spikes on their parcels.

Protection of Principle

Individuals who have become disillusioned by the theoretical, high risk nature of stocks and bonds or those who question the quality of information received from commission based investment advisers, may find that Land Banking can be viable and secure alternative.

Land is real property, it is a tangible asset. Its value seldom decreases and never disappears. Many individuals are already involved in Land Banking on a passive level – the land upon which their houses sit is a part of its overall value. Ownership of hunting, recreational or lake property is also a form of Land Banking. These purchases of land feel far more “real” or “tangible” than a stock or bond. Land Banking is a near risk-free investment. Nobody can guarantee rates of return, but your initial investment is typically protected from dilution. For many individuals Land Banking is a good balance to other more speculative investments in their financial portfolios

Risk Mitigation

Any investment decision requires balancing risk. Different types of investments carry different risks in different types of markets. Over time, as market conditions and personal investment needs change, an individual investor will desire various levels and types of risk. Many consumers value land investments– with their historic performances as tangible assets-as an important part of an overall investment portfolio. Again seldom, if ever, is your principle at risk with Land Banking.

Education

A primary investment goal of many parents or even grandparents is to provide an education for their children. Eighteen years from now, a four year college education is estimated to cost over $600,000. Concerned parents must plan ahead to meet the rising costs. A Land Banking acquisition at today’s prices which is held while children and grandchildren grow is one of the most reliable ways to ensure secure assets to fund a quality college education.

Retirement

Land Banking is an ideal vehicle for retirement planning since typically most Land Banking parcels are held for ten or more years. As part of a long-term retirement strategy, individuals should balance investments in stocks and bonds through Land Banking. An experienced trained Land Banking Specialist can help you build the real estate portion of your portfolio so that you are properly prepared for future financial flexibility and liquidity.