Land banks are quasi-governmental entities created by counties or municipalities to effectively manage and repurpose an inventory of underused, abandoned, or foreclosed property. They are often chartered to have powers that enable them to accomplish these goals in ways that existing government agencies can not. While the land bank "model" has gained broad support and has been implemented in a number of cities, they are implemented differently so as to best address both municipal needs and the state and local legal context in which they were created.

History

Land banking originated in the 1920s and 1930s as means of making low-priced land available for housing and ensuring orderly development. The period of deindustrialization in the United States coupled with increased suburbanization in the middle of the 20th century left many American cities with large amounts of vacant and blighted industrial, residential, and commercial property. Beginning in the early 1970s municipalities began to seek solutions to manage decline or spur revitalization in once prosperous city neighborhoods. The first land bank was created in St. Louis in 1971. While additional municipalities continued to adopt them at a trickle it wasn't until the mid 2000s that land banks became viewed as a tested, reliable, and accepted model and experienced widespread implementation – particularly after the success of the Genesee County Land Bank. In 2009 the Department of Housing and Urban Development issued a report embracing land banks as a best practices model for municipalities dealing with the effects of the real estate market collapse of the 2007 financial crisis and the ensuing foreclosure crisis.

Investing is a financial practice that involves putting money in financial schemes, ventures, or assets with an expectation to make a profit on the invested capital. It is arguably impossible to achieve financial security and freedom without investing.

There are thousands of investment opportunities to choose from in today’s world, depending on your level of financial literacy, risk averseness, and budget. These investment vehicles range from low-risk to high-risk investment vehicles. Land banking is among the relatively low-risk investment opportunities with a potential for high returns.

Land banking is one of the oldest real estate investment practices where investors buy small or large quantities of undeveloped land, intending to profit from the resale of the land. Simply put, investors seek out land in underdeveloped neighborhoods and bank it until there’s substantial infrastructural development or population growth in the area before selling it for a higher price or developing it to meet the growing housing demand.

Land banking can be a good bet when running on a low budget. However, as profitable as land banking is, there are some significant challenges and risks that you need to look out for and avoid to ensure the security of your investment.

In most developing countries, a change in government policies can prohibit certain forms of development on the land, which could, in turn, affect the resale value of the land. Likewise, environmental issues like erosion and flooding can significantly depreciate the value of the land if they persist for an extended period. The land may become too damaged to build on, and the cost of repairing the land may be higher than the invested capital and potential profit combined. The land may become completely inhabitable in these cases unless the government intervenes.

In some countries, land banks are constantly threatened by land grabbers who impersonate the original landowners and resell the same land to different people. Such lands may be under litigation for many years, and the cost for hiring lawyers over time might exceed the value of the land itself.

In order to avoid unpleasant situations when investing in a land banking scheme, it is essential to do your due diligence. Consider hiring a lawyer to research and confirm the legality of the land under consideration and ensure that there are legal documents and contracts to back the transaction.

Drylands have a lower risk of flooding.  If you can, limit your investments to drylands unless you are sure that you can afford the cost of repairing and restoring swampy land.
Although land banking has its challenges, the potential value and benefit far outshines the risks and makes it a worthy investment vehicle to consider.
Investors can make huge returns on the value appreciation of the land. Some government projects or policies can lead to rezoning, municipal expansions, rapid infrastructural development, and industrialization, all catalysts for value appreciation and increased demand.

Contrary to popular opinion that real estate demands a high starting capital, land banking schemes generally require a relatively low starting capital. You can start on a low budget and still enjoy good profit on your invested capital.

One of the significant benefits of land banking is its contribution to a positive credit score and the leverage it offers an investor. You can gain access to loan schemes to invest in other investment vehicles or start a venture by using your land as collateral, and at the same time, you can lease out the land pending the time it will appreciate enough to sell off. This is one of the reasons why land banking is a recommendable starting point for young and new investors.

Culled from dradnock dot com

Call Stella Ayomide on 08139956915 for further offer and professional advice on Real Estate investing.

“Play by the rules, but be ferocious.” – Phil Knight

The brand that gave us “Just do it!” qualifies that tagline, which always felt a bit broad, to include boundaries. You can’t “just do it” without regard to the rules, as Knight clearly states. Those rules are what level the playing field and protect fair competition. But rules have nothing to do with the passion in which you play within them.

“Forget past mistakes. Forget failures. Forget everything except what you’re going to do now and do it.” – William Durant

There is only the present, so the enlightened ones tell us, and we cannot allow ourselves to become tied to the past or enchanted by the future. There is only the here and now. We must concentrate on that and act. This quote doesn’t reject the lessons of the past or the plans for the future, but we only have this moment, so do your best in it.

“Investment is an asset or item that is purchased with the hope that it will generate income or appreciate in the future.” Anonymous

“The price of a commodity will never go to zero. When you invest in commodities futures, you are not buying a piece of paper that says you own an intangible of a company that can go bankrupt.” Jim Rogers

“Do something today that your future self will thank you for.” Anonymous

There’s no shortage of remarkable ideas, what’s missing is the will to execute them.” – Seth Godin

Writer and former dotcom businessman, Godin is saying that talk is cheap, but in a nicer way. Yes, ideas are a dime a dozen, but the real meat on those bones comes from trying to realize them. It is only then that the problems show up and the real work of resolving them starts.

Landlords grow rich in their sleep without working,risking or economising".~John Stuart Mill..

“Earn as much as you can, save as much as you can, invest as much as you can, give as much as you can.” John Wesley

“If you don’t own a home, buy one. If you own a home, buy another one. If you own two homes, buy a third. And, lend your relatives the money to buy a home.”
John Paulson, investor and multi-billionaire

Land Banking is the most lucrative buisness, it has low risk and a very high gain.
Real estate practice is not about selling or buying a home. It’s about representing your client’s greatest asset to your clients greatest benefit. – Alex Delgado

Risk comes from not knowing what you’re doing. – Warren Buffett

“Success usually comes to those who are too busy to be looking for it.” – Henry David Thoreau

Philosopher, naturalist, essayist, etc.—Thoreau knew a thing or two about productivity. He wisely saw that those who are seeking success are more likely romanticizing the idea and not doing the hard, practical work necessary to achieve it.

“Imagination is everything. It is the preview of life’s coming attractions.” – Albert Einstein

You’ll have noticed that often one inspirational quote contradicts the next. That’s because it is in these paradoxes that real wisdom is born. There is never just one way to look at something and with perspective comes opportunity. Ideas might be nothing without execution, but without those ideas the execution is empty.

We don’t have to be smarter than the rest. We have to be more disciplined than the rest. – Warren Buffett

Invest in yourself. Your career is the engine of your wealth. – Paul Clitheroe

“Every person who invests in well-selected real estate in a growing section of a prosperous community adopts the surest and safest method of becoming independent, for real estate is the basis of wealth.”
-Theodore Roosevelt

Real estate investing, even on a very small scale, remains a tried and true means of building an individual’s cash flow and wealth. – Robert Kiyosaki

“If you don’t own a home, buy one. If you own a home, buy another one. If you own two homes, buy a third. And, lend your relatives the money to buy a home.”
John Paulson, investor and multi-billionaire

I have always liked real estate; farm land, pasture land, timber land and city property. I have had experience with all of them. I guess I just naturally like ‘the good Earth,’ the foundation of all our wealth. – Jesse H. Jones

Good morning Happy Independence day

Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world. – Franklin D. Roosevelt

Real estate investing, even on a very small scale, remains a tried and true means of building an individual’s cash flow and wealth. – Robert Kiyosaki

Investing in real estate requires lots of money.
- John