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Making money from a plot of undeveloped land appeals to many investors, but it requires patience. You can potentially double or triple your money if you're prepared to hold on and wait for the price of the property to appreciate. To see that return on your investment, a land banking loan might be where you can start. Find out what's available.
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Land banking refers to the practice of purchasing land based on its potential for future sale or development. If you engage in land banking as an investor, you will typically purchase a property and hold onto it until the price of the property appreciates. Then you can sell it for a profit – this might involve waiting until market conditions are favourable.
Land banking typically involves:
It is worth noting that the above won't always happen – a decrease in real estate values means some investments will result in a loss.
Land banking promotes development and helps meet real estate demand. However, risk is involved, so it pays to compare your loan options before investing.
What are the merits of land banking as an investment strategy?
Investing in real estate has been a profitable activity for many people. You could potentially:
What are the essential features of a property that has good development potential?
If you're interest in land banking, knowing the key features of a good real estate opportunity is essential. A tract of land suitable for land banking will:
When should you consider taking out a land bank loan?
If you have a property, you might need a land bank loan:
Ready to get started in land banking? Jump back up and compare your options >>
DISCLAIMER: The comments in this article are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information applicability to their own particular circumstances.
Picture: Shutterstock
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