₦airaland Forum

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,

Everyone wants a piece of land. It’s the only sure investment, it can never depreciate like a car or a washing machine.” Russel Sage

“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

“It’s tangible, it’s solid, it’s beautiful. It’s artistic, from my standpoint, and I just love real estate.” ~Donald Trump

“When you invest, you are buying a day that you don’t have to work.” Aya Laraya

“The wise young man or wage earner of today invests his money in real estate.” Andrew Carnegie

“Owning a home is a keystone of wealth… both financial affluence and emotional security”.
Suze Orman

“When you invest, you are buying a day that you don’t have to work.” Aya Laraya

“You will come to know that what appears today to be a sacrifice will prove to be the greatest investment that you will ever make.” Gordon B. Hinkley

“When you invest, you are buying a day that you don’t have to work.” Aya Laraya

“90% of all millionaires become so through owning real estate.” Andrew Carnegie

“You will come to know that what appears today to be a sacrifice will prove to be the greatest investment that you will ever make.” Gordon B. Hinkley

“Buy on the fringe and wait. Buy land near a growing city! Buy real estate when other people want to sell. Hold what you buy!” - John Jacob Astor, real estate and business mogul

Everyone wants a piece of land. It’s the only sure investment, it can never depreciate like a car or a washing machine.” Russel Sage

“When you invest, you are buying a day that you don’t have to work.” Aya Laraya

“You will come to know that what appears today to be a sacrifice will prove to be the greatest investment that you will ever make.” Gordon B. Hinkley

“You will come to know that what appears today to be a sacrifice will prove to be the greatest investment that you will ever make.” Gordon B. Hinkley

“The wise young man or wage earner of today invests his money in real estate.” Andrew Carnegie

The philosophy of the rich and the poor is this: the rich invest their money and spend what is left. The poor spend their money and invest what is left.” Robert Kiyosaki

“90% of all millionaires become so through owning real estate.” Andrew Carnegie

“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

“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

“You will come to know that what appears today to be a sacrifice will prove to be the greatest investment that you will ever make.” Gordon B. Hinkley

“The wise young man or wage earner of today invests his money in real estate.” Andrew Carnegie

“The wise young man or wage earner of today invests his money in real estate.” Andrew Carnegie

“The wise young man or wage earner of today invests his money in real estate.” Andrew Carnegie

For a long time, real estate investments has been seen as a thing for meant for individuals situated in the upper strata of society (the high class/the rich) and for individuals who are financially adequate and possess sound financial education, until the market was modified and more real estate investment opportunities opened up to anyone and everyone — from the high-class to those in the middle-class and even to the low-income earners, because the previously-held popular belief was that being a (profitable) property investor should be a thing for "the select few".

There are so many people out there who are constantly searching for for genuine investment opportunities to help grow their income and provide them with financial stability and one of the few investment opportunities in Nigeria with an astronomical rate of ROI is the vacant land which invariably falls within the Real estate sector because "well-selected landed property never depreciates."

This article will enlighten you on the many benefits you gain from investing in Land banking.

What is Land Banking?
If you are being exposed to the idea of land banking (by this article) for the first time, your first question probably is: What is it? And closely followed by, “should I invest in it?”

Ans-Land banking is a real estate investment scheme that involves buying undeveloped land at a reduced amount with the goal of holding unto it for a while and then selling it for profit at a future date when the price of that property has significantly appreciated.

Investors acquire land by tracking locations, which are best for investment, based on social infrastructure and demographic factors (Population).
Land investors buy lands, wait for the land’s value to appreciate and then, sell the same to other interested parties for a substantial profit.


How Does Land Banking Work?
There are many large real estate development companies in Nigeria that engage in land banking. These companies buy undeveloped lands, farms, and other greenfield sites after thorough research on locations prone to quick appreciation and development to add to their existing portfolios.

These portfolios can be considered as their “bank”. This practice enables developers to have a ready stock of land for any future property developments.

These land banking investment companies help investors to put their funds in purchasing undeveloped lands from their land banks; investors hold them for a while intending to resell at higher prices for maximum profit.

It is important to note that land banking is an investment strategy open to large property development companies and can also be done by smaller private investors. The only difference being, that smaller investors would be acquiring smaller parcels of land: due to obvious capital constraints.

How Much Money Can I Make By Investing in Land Banking?
While regular banking investments offer very low-interest rates, land banking investment has created an opportunity for you to earn as much as 35-100% returns on your investment within a year.

Engaging in land banking investment in well-selected real estate in a growing section of a prosperous community (such as Ibeju-Lekki) can create an avenue for your ROI to be between 45%-100%.

10 Reasons Why You Should Invest in Land Banking
#1: Appreciation of the land’s value
Land banking is a good investment strategy to the extent that the value keeps increasing: this is true globally. The cost of acquiring land, as observed, always goes up and hardly ever comes down.

Land is one of the assets that have the potential to appreciate over a more extended period, so investing in land that has high development potential at the current or lower market value ensures maximum returns to the investor.

#2: Value addition
You can decide to make improvements on the land which will make it more valuable. Value addition to the site is possible by obtaining property development approvals and then, over time, proceeding with property development.

Value addition makes the land more attractive for developers, who may be willing to pay a premium for it. Alternatively, the land banker may opt for financing and continue with property development.

#3: Minimal Start-Up capital
Untapped, vacant land is generally the cheapest type of real estate to be found. It’s not until expansion and development occur that property begins to increase in value.

Hence, if you know where to look for great deals on land(or better-still acquire the services of a Rea Estate Consultant) , it requires minimal start-up capital to get your business up and to run. It’s a type of investment that doesn’t necessarily need you to have millions of naira.

#4: Seller Financing Can Increase Your Income Potential
Seller financing is essentially the same thing as “lending money” to the person who is buying your property. But instead of advancing money to the borrower, you simply allow them to use your land permanently, and you accept payments for it in the form of cash over several months or years in the future.

When you, as an investor, combine the power of seller financing with your vacant land, it can open doors to many more buyers. Due to the scarcity of “easy money” financing for vacant land properties, land investors can use this to their advantage by charging a higher-than-market interest rate, and many people will gladly pay it.


When you sell your land this way, you will get 100% of your initial investment back almost immediately (first few months of loan closing), and the remaining payments you receive for the loan’s remaining term are pure profit.

#5: Land is cheaper to Own as a Long Term Investment
The land is relatively abundant and thus cheap in some developing parts of the country like Ibeju Lekki (Lagos State), Akute (Ogun State), Mpape (Abuja). As an intelligent investor buying this vacant land offers you a more accessible and more affordable way into the real estate market.

When you buy a piece of land for the right price, Land banking can be the type of investment you use to keep your money stored somewhere for a while.


Your asset sits quietly in the background, costing you almost nothing while silently increasing in value.

#6: Undeveloped Land is a Hands-Off Investment
The land is easier to manage than built-up properties that require being kept in reasonable condition: no utility fees, no tenant problems, etc. No dealing with problems like leaking roofs, burst pipes, and other myriad of issues that come with owning buildings.

Vacant land doesn’t involve any of those things. Once you buy it, it sits there, and appreciates in value while requiring next-to-no-effort to maintain. No stress!


#7: Generate Remarkable Income Before You Sell
Land can generate income while waiting for future economic development.

A great example is leasing it out.

Land in a rural farming area can give the land investor an exciting income stream when the investor charges land rent for the farmland, which will be used for agricultural purposes by the renter (If it’s fertile land).


You may also be able to harvest the trees through logging on your vacant land with woodlands.

You can also sell mineral rights to designate who can profit from the resources on the land. This can generate an income stream while you sit on the ground.

#8: Lower competition
In this real estate investment niche, there’s low competition. Most people (especially those with a lot of investment capital) are focused on the shiny and glamorous aspects of real estate investment – condo buildings, developments, house flipping, multi-units. It’s not their fault; almost everyone is focused there.


If looking to buy undeveloped land, then a significant advantage is the smaller competition you will face.

You can find the land that meets your criteria in no time, and you can still negotiate to get a better deal time.

#9: Subdivide For Land Sales
Another way investors can make money off their land banking investment is by subdividing their lands for sales. Investors can increase the total land value of their investment by separating it into smaller lots and selling them individually to buyers.


In many cases, the subdivided land can be more valuable than the whole. This is due to marketability and the fact it might be easier to find a buyer for a smaller, more affordable parcel of land, as opposed to one large lot.

The subdivision process of raw land consists of two parts: mapping and legal documentation. The mapping aspect refers to the proposed subdivision area and how it should be defined. At the same time, the legal documentation involves submitting the proposed subdivision, which generally includes an application and fee, to the local county. If they approve the application, the subdivision mapping is recorded in the county records.

#10: It is a finite asset
One of the biggest reasons you should invest in land is that it is a finite resource. New residential high-rises will continue to be built, but only a limited amount of land is available for ownership.


Because of this, owners can be sure that their investment will constantly be in demand as a result of which, its price will continue to appreciate.

Investing in a plot of land is undoubtedly one of the best options for individuals looking to gain high returns with minimal risk.

Why is Land Banking a Better Investment Opportunity than other Forms of Investment?
-Land is a safe investment that will always be in demand for one reason or another.
-Land is very inexpensive to own as a Long-Term Investment; the investment could be made according to your financial capacity.
-You can grow your returns quickly.
-This type of investment has a low tax rate; If your investment property is sold after a year, the gain is subject to capital gains tax rates. Depending upon your tax bracket is generally 15% or 20%, which is usually less than one’s tax bracket.
-Real estate coincides with retirement; when real estate is purchased, the cash flow is lower, but over time, it yields a higher income which is a perfect investment for retirement.
-There will always be value on your land. Other investments can leave you with little to no tangible asset value, such as a stock that can dip to zero or a new car that decreases in value over time.

Final thoughts
Research has shown that land banking investment is without question one of the best investment schemes to go into.

It comes with a guarantee of great profit returns in the scope of five years. This is assured because it has proven to be one of the most profitable short- or long-term businesses.

With regards to real estate investing, investors often utilize only one of two strategies:

1-Buying a property and flipping it quickly
2-Buying a property to bring in passive income: rental yield


Land banking is a great alternative investment strategy: specifically for investors that just want to invest, wait and watch their money grow.

After thorough research on locations prone to quick appreciation and development, these investors put their funds into real estate deals with the best projected ROI; it is necessary to be conversant with essential highlights like how to spot a good investment opportunity, when to buy land, when to sell, when to develop, etc.

For example, if you plan to make long-term investments, you should confine your investments to those investment opportunities that you will be happy to own for at least ten years – Real Estate Investment (vacant land precisely).



Suppose that you now decide to go into land banking investment. In that case, a buyer’s market can be a great time to start investing in real estate (land banking investment) because real estate values are often down. Sellers may have a strong desire or need to sell, meaning you as the buyer can ask for lower prices, concessions, or other creative terms when buying.

When you go into land banking, the best time to sell is when the land is situated at a developing stage.


Land almost always appreciates and is relatively cheap to acquire in Nigeria. Abuja Lagos are two of the best places to land-bank in the country. Simply buy some plots near a soon-to-be-developed district (such as Ibeju-Lekki), wait, and bank (profit).

Land monopoly is not only monopoly, but it is by far the greatest of monopolies; it is a perpetual monopoly, and it is the mother of all other forms of monopoly.”
-Winston Churchill

“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

“The wise young man or wage earner of today invests his money in real estate.” Andrew Carnegie

“Owning a home is a keystone of wealth… both financial affluence and emotional security”.
Suze Orman

“90% of all millionaires become so through owning real estate.” Andrew Carnegie

“When you invest, you are buying a day that you don’t have to work.” Aya Laraya