Invest In Land
A real, tangible, limited commodity
Land Banking
As a core investment strategy, Land Banking has been used by some of the most successful and famous Real Estate professionals all around the world, including Donald Trump, Howard Hughes, Roy Sakioka, and others.
In the UK, Land Banking has traditionally been affordable only for the larger investors who had the money and the expertise to pursue it. As you will soon see, that has changed. Now is perhaps the best time ever for individual investors to make Land Banking a central part of their investment portfolio.
How the Property Professionals view land banking
Property Developers around the world know that Land Banking is the best, most reliable path to wealth and ongoing success. It is the underpinning of their success because they know that land values increase over time, so even a small investment can pay off big in the end. The best way to maximise profits, then, is to buy land and hold it until the value increases dramatically, usually because it becomes an attractive plot or area for development.
Land Banking is the hallmark of nearly every successful property development company. These companies have the expertise to research and find the parcels of land that are not yet developed but are in the path of likely development. They then purchase these parcels and hold on to them until such time as planning permission is granted and the value starts to skyrocket.
If it's so profitable and reliable, why don't more people do it?
The answer is quite simple. Prior to now, Land Banking was only accessible and affordable for those with the large sums of money needed to invest in large sites of land, and the expertise to determine which sites were suitable for investment. Now that's all changing.
In the UK, we now have entirely new economic and social conditions. The demand for affordable housing has increased dramatically, especially in the popular southeast region. Even worse, we continue to be mired in an extended period of poor performance by other more traditional asset classes such as stocks, bonds, ISAs etc.
Thanks to new laws and government commitments, opportunities are opening up rapidly for smaller investors to take advantage of the wealth-building strategy of Land Banking. You no longer need vast sums of money and extensive land development expertise to succeed at Land Banking.
Land Banking Explained
Before we go any further, let's look at the basics of Land Banking.
The most fundamental definition of Land Banking is:
Buying land and holding it for future use/development
Or, in a more sophisticated explanation, Land Banking is the strategic purchase of land that is likely to increase substantially in value. Typically, the types of land that fall into this category are farmland, green belt land, or brown field sites that are lying dormant and without planning consent.
Once planning consent is granted, such lands typically grow in value exponentially. Large developers have been doing this for decades, and there are countless examples (especially in America) of fortunes being made this way.
For instance, Donald Trump owns 100 acres of prime undeveloped land in Manhattan. It is just sitting there, undeveloped and unused. He is holding it for future use so that it will deliver substantial return on his investment when development eventually occurs. This is a classic Land Banking manoeuvre.
Successful Land Banking is not quite as simple as selecting a parcel of dormant land and buying it. Effective Land Banking requires research, expertise and due diligence to find those parcels that are most likely to deliver large gains. You must investigate and know where development (such as roads, businesses, schools, homes, etc.) is likely to happen and then buy land ahead of these developments. You then hold onto the land over time, and sell at the very last minute to maximize profit.
