Land Banking Investment

Land banking is one of the best real estate investment strategies that hedges your finances against inflation and guarantees a good Return on Investment (ROI). By accumulating land in strategic locations, you can maximize profit. The profit from land banking often surpasses what you earn from traditional banking, with lower risks compared to Forex and Stock markets.

The bulk of real estate value appreciation comes from land. This makes land banking a lucrative investment opportunity, as it avoids inherent expenses like maintenance costs, utility bills, mortgages, and some sorts of taxation associated with houses.

What Is Land Banking?

Land banking involves buying and holding land for a significant period until its value appreciates. It entails purchasing land in bulk at current low prices and waiting for development and population growth to drive up prices.

What Is The Purpose Of Land Banking?

Land banking is a key strategy employed by wealthy individuals to grow their wealth. It is considered a long-term investment that yields substantial returns over time.

McDonalds once asked, “Which business do you think I do?” His audience felt embarrassed, “Who doesn’t know what McDonalds do for a living?” “You sell burgers”, they replied. But McDonalds refuted it, “No, I’m into real estate investing”. I want to assume his burger business is his side hustle. It isn’t what gives him the bulk of his money. Some investors tie the bulk of their profit to real estate for a long time, and the appreciated value explodes them into riches.

The secret behind this is simple, “land is limited in supply, and its value always appreciates”. All billionaires in the world bank land; Jeff Bezos, Bill Gates, the late Queen Elizabeth, etc. John Jacob Astor became the first multi-millionaire in the United States of America by banking land. He died being the fourth richest man in American history with a net worth of $110.1 billion. Land banking is often called a Get Rich Slow scheme. It’s not going to make you rich overnight, but it will certainly make you rich. Real estate investing, which includes land banking, is the safest and surest way to get rich. Obviously, the reason people bank land is to grow wealth.

Land Banking Strategies In Nigeria

Land banking is a popular investment strategy in Nigeria that involves buying and holding land for future appreciation in value. Two common strategies include:

  1. Buy to Flip: Purchase land now and resell it when its value rises in the future.
  2. Buy to Develop: Purchase land, sell it as its value appreciates, and reinvest the proceeds into development projects. While some investors might be interested in earning rental income, some others might want to sell the already-built house and continue with their land banking cycle.

Advantages of Land Banking As An Investment Vehicle

  • Suburban land is cheaper than urban land, offering higher profit margins.
  • High-profit potential with minimal ongoing expenses like maintenance costs, utility bills, etc.
  • Low competition compared to other real estate investment niches.

Disadvantages Of Land Banking As An Investment Vehicle

  • Those who don’t conduct land searches before banking land might accumulate government-acquired land. Or land with certain restrictions or purposes (hectares set aside strictly for agriculture).
  • Investors can also fall prey to land grabbers. That’s why it’s better to bank land with real estate firms or developers than omoniles.
  • Banking land in highly remote places makes it take much time before the value starts appreciating. Except you have first-hand information that some giant projects or infrastructure will be there soon, you should tread carefully. Ensure you follow the rules stated in this Free Real Estate Investing eBook.
  • The major disadvantage of land banking is the significant time it takes the land value to appreciate. Not everyone has the patience to wait for the land value to appreciate. For this reason, land banking as a real estate investing strategy might not be good enough for those with financial instability.

In conclusion, land banking is a promising investment strategy in Nigeria, offering substantial returns with the right approach. It requires patience, market understanding, and a good understanding of the market for success.

If you need advice or support with land banking in Nigeria, contact us for assistance tailored to your investment goals and risk tolerance. Call our line for a quick response: +2348037843617.