Land as a resource is a paradox. As a natural resource, it is sufficient and in large supply yet as an asset, it is invaluably rare. This is because, as a fixed asset, it is tasked with operating against the ever-increasing population rate. With demand for land increasing at an exponential rate, it is no wonder real estate investment remains one of the most lucrative forms of wealth replication. But even the many reforms aimed at closing the needs gap in real estate cannot keep up with the fact that land isn’t just enough.
As a consumer, this is a problem but as a potential investor, this problem comes with many opportunities, one of which is LAND BANKING.
What is LAND BANKING?
Just as you must have thought, Land Banking is the practise of aggregating parcels of land for future sale or development. It’s a common practice especially in emerging markets in Africa although the appropriate term is yet to catch on. It is a simple yet effective way of converting money to asset while also ensuring that your savings yield satisfactory returns.
WHY LAND BANKING?
Of all the available investment suites, land banking is the only one most certain to yield enormous returns. This is because the increasing demand continues to give the value of land a boost and because land isn’t a legal tender, its value isn’t influenced by economic downturns. Placing these perks against stashing your money in a savings account where you only get 1% of your returns at the end of the year, you can see why you are better off investing your money in Land Banking.
The only con associated with Land Banking is the fact that you might not be able to liquidate your assets immediately
HOW TO GET STARTED
Land banking requires a certain level of discernment. Not every piece of land will be marketable in a few years so if you are going to delve into land banking, keep an eye out for developing environments. If a city is growing, there will be a development of residential neighbourhoods and commercial subdivisions. Watch out for that.
Buy and wait for the population to circle into the environment. By this time, the land would have increased in value and you’d be able to sell it for a huge profit. If you are looking to make some money in between, you can lease the land temporarily for commercial use.
The best time to buy land was many years ago but today isn’t too late for you to make a profit tomorrow.
Interested in building wealth with Land Banking? We have prepared some surveys to help us understand what products would be best suited for you.