Introduction to Land Banking.
‘What should I invest in?’ is a commonly asked question by people looking to create multiple income streams and by others, who wish to diversify their existing portfolios.
In recent years, a wealth of online investment forms have sprung up on the thrill of quick gains and high returns. Yet, real estate investments have maintained their invaluable position due to lower volatility rate compared to others.
Real estate investments are in various forms. One of which is land banking.
WHAT IS LAND BANKING?
In simple terms, it means to buy land to hold, and then sell for profit. Alternatively, the land banker (investor/developer) may opt for financing and continue with property development.
Land banking is the practice of acquiring land for cheap at today’s price for future real estate developments. Investors purchase large expanses of land in an area with high potential for growth and hold until there is an uplift in the market.
This practice enables developers to have a ready stock of land for any future property developments.
BENEFITS OF LAND BANKING
High Return on Investment
Increase in demand for land/property leads to an appreciation in value. When you acquire land before ‘anybody else’ perceives the value, you buy at a rate that will tend to grow as attention begins to spike.
The value of land acquired may rise to 500%, depending on the level of growth and years of banking.
Low barrier to entry
Land banking is a practice that can be done on a small or large scale. Compared to other real estate investments, there are only a few regulations around land banking.
Vacant land is also generally the cheapest type of real estate to be found. This makes it easy for both individuals and large companies alike, to invest in it.
Availability of Supply
Even as supply of land is fixed, untapped land is relatively still in abundance and thus cheap, especially in developing areas of the country. Seek potential, study trends and forecast probable economic growth in emerging states/locations fit for land banking.
Easy to manage
Vacant land only requires little effort in terms of maintenance. Unlike developed properties that require routine planned and unplanned maintenance. At most, you can decide to build up a fence to mark territory on your asset, as it sits silently increasing in value.
Opportunity to Buy-Earn-Sell
Land can generate income while waiting for future economic development. You can adopt property flipping methods to increase the value of the land. In the countryside, vacant land can be used as a commercial agricultural centre and the land owner can earn from this lease.
With the international airport coming to Epe, there’s no better time to bank land in this area than now. Ready to get started? Begin at Ashborne Gardens with N200,000 today.
To get expert help to start your profitable property investment journey, talk to Thinkmint Nigeria on 0809 784 5065 or visit our website here