Land Banking

Disclaimer: The utube videos and links I have put up on this hub are for general information only. I have no affiliation or indeed connection with anyone in the Land Banking industry other than through my friend about whom I am writing in this hub...Please, If you wish to invest in Land Banking be aware of the potential pitfalls; do your due diligence before embarking on this exercise and be aware of and indeed, follow any legal requirements as they relate to your country and your state. I have never invested in this type of business and nor do I plan to any time soon.

Land Banking. I have experienced both the joy and pain associated with Land Banking quite vicariously through the actions of a friend who on a small scale, has resurrected her fortunes by following a plan that she conceived and then actively put into action. My friend, the land banker, works in the medical profession and after she arrived back to NSW fresh from her experience of living in a quite beautiful place in Queensland, she decided to put into practice her plan regarding her own land banking ideas. Their first piece of land was gorgeous acreage located right on a river and situated quite near a thriving township. They bought this land quite cheaply then however if you wished to buy a piece of this same type of land now it would require a small fortune. So with this f irst purchase she had the initial bones of her plan happening - her plan was now actionable.

Her story goes that when she returned from Queensland to her original place of residence she borrowed on her acreage to buy a house in a country town some miles from she had started working. The beauty of her new home and chosen residential town is that it was/is located quite close to a larger town, which is in turn is about an hour’s drive from a major Australian city. So now she has two properties. Another perfect site and start for her land banking project.

When I asked her what she would look for when buying her properties; she said what she was after was a house in a smaller village that was within driving distance of a city, where people in the future could commute quite easily to work; while at the same time enjoy the more fruitful aspects of country life. About an hour to an hour and a half's drive from their place of work. Good idea so what would that involve I wondered – well it seems that you need to go out hunting for the right village within a given radius of a larger city. The right village should be showing early signs of becoming a future dormitory suburb of that city. And of course it goes without saying that you need to get there early before the big investors are aware of what is happening.

So my friend now has two properties. The next buy was a block of land in her same village again with borrowing against what she has formerly purchased and is paying off gradually. This land was bought for less than twenty thousand dollars but is now valued after about eight years of ownership, at approximately $100,000.00 thousand dollars.

The next purchase happened when they went out for a picnic to a small community where to be able to purchase any property at all, was like a gift from the Gods’. They were so excited, they now had entree into this small fishing village they had loved visiting for years. This land is also located right next to a river. And so they bought this little parcel of land for a minimal amount of money but it, like the other buys, will increase in value over time.

So after about ten years my friend now has four properties, and while nothing is in great repair and indeed 75% of the purchases have no housing on them the bottom line is that she has land, something solid, her investment in the turf. Not a fluctuating asset like stocks and shares where one wrong turn in Wall Street knocks hundreds of thousands off your Superannuation or Share Portfolio. So her bottom line is increasing slowly and carefully as per her own personally devised Land Banking Plan.

Time has passed and after returning home with little to no assets, she has, with her hard work and smart thinking turned the family fortunes around through her careful planning, juggling of finances and solid investments in Land Banking.

My friend did not employ anyone to advise her, nor she did not go through any investment companies, but she did find a great bank "The Bendigo Bank" which has stood by her and helped her to finance her ideas.

To her credit and with some financial hardship, in approximately ten years she has been able to put into practice her idea of what Land Banking for the individual is really all about.

Land banking is the practice of purchasing land with the intent to hold on to it until such a time as it is profitable to sell it on to others for more than was initially paid. Land is becoming increasingly popular as an investment due to the benefit of its being a tangible asset as opposed to Shares or Bonds. This type of investment has gained such popularity it is now possible to land bank worldwide and there are several firms set up to offer opportunities to do so.

Parcels of land desirable for “Land Banking” are those that lie directly in the growth path of rapidly developing cities. The initial goal is to buy undeveloped land that will increase in value because it lies in the path of urban growth. The key is to identify these parcels well in advance of the developers and wait for their values to mature. With diligent research, financing and managing of a land banked property, one may be able to realize a profit upon the final sale.

http://en.wikipedia.org/wiki/Land_Banking